Create a Stable Foundation for Your Next Business Venture
While entrepreneurship seems exciting, it can be daunting to start a business, especially when uncertainty permeates our society.
Opinions expressed by Entrepreneur contributors are their own.
Many people experience a career shift at some point in their lifetime. It's not unusual for people to pivot in their 40s, 50s, or even 60s. With the "Great Reshuffle" causing people from all generations (but particularly millennials) to change jobs, or even leave work altogether for a sabbatical or broader life change, it's no surprise that this has become a topic of interest in recent months.
The pandemic, which caused many to work from home, gave people time to consider what they were passionate about and allowed them to redirect their career pursuits. It was the perfect time for a shift, as entire industries were already changing and adapting. Many did not want to leave their jobs altogether but found that they had extra time while working from home to reflect on their goals and pursue those passions. This gave both time and space for many to jump headfirst into entrepreneurship.
While entrepreneurship seems exciting, it can be daunting to start a business, especially when uncertainty permeates our society. There is much to consider — budget forecasting, developing and executing marketing strategies, and preparing for tax season, to name a few.
There are several tactical steps entrepreneurs must take to see long-term success. Here are two entrepreneurial strategies that you need to prioritize: understanding cash flow and building a great team.
Related: Funding: What Is Entrepreneur Capital vs. Venture Capital?
Understanding cash flow
Many entrepreneurs and business owners have amazing ideas that need effective cash flow strategies to survive. Whether signing freelance contracts or selling products, it is important to quickly understand your company's cash flow to ride the waves that often come with a new business.
When preparing to start a business, it is important to have enough savings set aside specifically to help you through the challenges of starting a business — or to be willing to take a financial risk.
For some, this means saving a certain amount to offset any issues with cash flow or working to get out (and stay out) of personal debt. For others, this means investing all profits back into the business during the first year. Whatever your cash flow strategy looks like, make sure you're keeping accurate records and paying attention to the paperwork, not just following the next big idea.
Related: How We Can Beat Venture Capital's Diversity Problem
Know how to build your team
Building a great team is paramount to building a successful business. If you're diving into a new industry, make sure you consult industry experts on the type of people you should hire. Sometimes, hiring the best resume with the most experienced people is not a linear pathway to success.
A person's character and commitment are often just as important as their qualifications. Someone who is dedicated to seeing your company grow through all of the ups and downs of a new business is just as valuable as hiring someone with an MBA — sometimes even more. Your team is your first line of defense. Make sure you consider the quality of their character and their dedication to your long-term mission because your starting line often defines the direction of your company.
Passion, good work ethic and culture fit are three key factors I always consider when evaluating candidates. When someone exhibits these qualities alongside a commitment to your company, you can often teach them the more specific skill sets needed to succeed.
Employees don't want to just sit at a desk for 40 hours a week. They want to feel like they are a part of something meaningful. Purpose-driven companies create a sense of pride and dedication in their workers. Creating processes for your business to financially thrive, alongside finding and inspiring employees who care about your business, will help your company sustain long-term growth.
Related: Why Raising Corporate Venture Capital Benefits Startups