5 Necessities for Starting Your Own Business
Starting a business is not like climbing Everest -- in fact, 530,000 Americans do it every month. But knowing the common, unforeseen roadblocks new businesses run into will give you a competitive edge and set you up for success.
There are all sorts of factors involved with starting a business, some of which aren’t immediately obvious. Some people don’t realize the hidden costs of starting your own business. Others don’t have clear distinctions between red and blue oceans Still others are unprepared for the little failures that pop up, and crumble because of a lack of patience.
Being prepared for what’s going to come your way will be a game-changer when it comes to starting your business. You’re probably pretty well prepared, but here are a few things you may not have thought of:
It might sound obvious, but you really need to want to start your own business. And for the right reasons.
Knowing the real reason why you’re creating an enterprise is important, because not all motivations are created equal. Ask yourself: do I really want to start my own business, or am I just sick of working for my current boss? Do I want to be an entrepreneur, or am I just caught up in a hobby?
The answers to these questions matter because, psychologically, if you don’t have the persistence to carry this thing out to completion, it’s going to be a unpleasant process. You need real determination to start your own business for the sake of the business. If you’re just doing it to stick it to your ex-wife who said you’d never make it, it’s not going to be enough to take you through to fruition.
Starting a business requires self-determination and autonomy. You need to take control and run the show because you really want to.
2. Enough money.
Everyone knows the old idiom “you have to spend money to make money.” However, few people know how much money they have to spend.
The short answer is that it differs for everyone. SCORE can help, which sets you up with retired business professionals who have danced this dance before and can serve as your advisors. But even then, prepare yourself for an onslaught of costs.
What kind of expenses should you watch out for? Costs arise from location, advertising, training, wages, and any fees paid to professionals or consultants such as a lawyer or accountant. The good news is that, for the first year, they’re tax deductible up to $5,000.
The bad news is that taxes always seem the new business owner hardest. Why is this? For starters, they’re not automatically being deducted from your salary, like they would be at a typical job.
But it’s the everyday costs we forget about. Lunch in a rush, drinks with a client, normal life events and the unexpected ones that matter more when you don’t have a consistent income. Make sure you have enough put away that you won’t have to sleep on the street just to run your business.
3. A known market.
The idea of the Blue Ocean, pioneered by W. Chan Kim, states that it’s best to enter into markets that have no competition. The opposite of a Blue Ocean is a Red Ocean, where bloody competition makes it harder to profit.
In short, you’ll get less competition selling printable organs than you would selling jeans.
However, sometimes there doesn’t need to be a Blue Ocean waiting for you. You can do what Apple did and create a Blue Ocean. Steve Jobs pioneered the idea of “creating a need,” which then created an ocean. He did this with the iPod, saying: “A lot of times, people don’t know what they want until you show it to them.”
In fact, many business theorists say the customer often doesn’t know what’s best. This is called a Red Ocean Trap. Businesses are far more in control of “need” than people might think.
4 .The required (but less obvious) personality traits.
What traits come to mind when you think “business owner?”
Leadership? Tenacity? Innovation? Of course, but there are also some less obvious personality traits that make for strong business owners.
Studies have found that individuals who are comfortable with ambiguity tend to make better business owners. This isn’t all that surprising. As a business owner, the correct path is sometimes muddled and fuzzy. Being able to grapple with ambiguity gives you more flexibility and allows you to adapt accordingly.
Curiosity is also high on the list. Curious people are more apt to try new things and discover new methodologies for success, both which are integral skills for entrepreneurs.
Unless you’re super lucky, patience also helps, especially during those long, slow periods when it feels like business is never going to grow.
Lastly, you must be able to deal with failure and success. Regardless of how your business does long term, you will have plenty of both along the way.
5. A contagious belief in your business.
Lastly, you need to have faith in your business that inspire others, as well.
In his sales memoir, How I Raised Myself From Failure to Success in Selling, Frank Bettger claims enthusiasm is the single most important part of selling.
He’s not alone. Steve Jobs believed in inspiring enthusiasm within his employees as a method for a better business. He found that by being human and honest, while creating actionable steps for success, he was able to connect with his employees and create a positive work environment.
Time and time again, research has shown that positive employees make a better sales team.However, the ultimate goal is to make your customers believe. That’s why customer relationships are essential for your brand. You must build relationships with your customers, either directly or through brand loyalty, in order to make them believe in your business.