You can be on Entrepreneur’s cover!

When Launching a Company, Consider These 5 Things From being passionate to choosing the right partners, entrepreneurs need to focus on a few key components to help build a sustainable business.

By Josh Reeves

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock

While entrepreneurship is in vogue (2012 was a 14-year high), the success rate for new businesses is disheartening. Indeed, according to the Small Business Administration, only about half of all establishments survive five years or more. There are numerous reasons for failure, but "lack of experience" tops the list. Fortunately, the entrepreneurial ecosystem is not a zero-sum game, and you can learn from other entrepreneurs around you.

As the co-founder of payroll service ZenPayroll, here are five lessons I've learned through my own startup experience.

1. Be passionate about what you do. Make sure the problem you decide to tackle connects to personal motivations. Getting a company off the ground is hard work and you'll want what you're doing to inspire you every day.

Related: 4 Lessons in Success From Millionaire Entrepreneurs

I'm passionate about empowering small business owners and making unnecessarily complex systems easy and intuitive. One of our goals at ZenPayroll is to abstract the government so business owners don't have to deal with the 15,000 plus tax codes in the US. It's not sexy -- but it doesn't have to be.

2. Think big. If your initial concept doesn't generate a lot of product possibilities, potential partner opportunities and customer profiles, consider going back to the drawing board.

The best business ideas solve problems and make people feel something -- whether that's relief, joy or curiosity. Find a group of people who find your solution valuable. Pursue that audience and keep iterating until you have a million things to do. Then prioritize relentlessly and execute.

3. Listen, but don't obey. A lot of businesses misunderstand the goal of customer feedback: It isn't to have your customers tell you what they want, it's to discover what their pain points are and determine the underlying opportunity. Customer input should inform your decisions, not drive them.

To build something that has never been built before, address these hidden cause-and-effect relationships and take risks. People may not even be happy with your offering at first because it is so new, but over time, your solution will prove to be better if it addresses the root of their problems.

4. Done is better than perfect. Entrepreneurs have to make so many choices that it's easy to stagnate by doing a lot of little things without proving or learning anything -- what is known as decision paralysis. "More options, even good ones, make us freeze," Chip Heath and Dan Heath wrote in "Switch."

Related: 5 Lessons Entrepreneurs Can Learn From German Philosopher Friedrich Nietzsche

Setting goals is critical to maintaining focus. At ZenPayroll, we regularly establish key questions (things we want to prove to ourselves), and then revisit them to see if our assumptions were correct. Learning by doing is much better than over analyzing. There will always be more things to do and questions to answer. Starting a business is a progression, and you have to prioritize where to start.

5. Choose the right partners and mentors. Your startup team -- including partners, investors and mentors -- should be built around common values that permeate your decisions and shape your company culture. That said, it can sometimes be tricky, especially when you need funding. Resist the urge to follow the money. You should be as choosy about investors as you are about the rest of your team:

  • Identify what specific help you need, whether it's for personal development or tactical advice.
  • Learn about their goals, motivations and ambitions and choose folks who align best with your needs.
  • Have a goal for each relationship, and remember, it's up to you to make use of their wisdom and experience.
  • Seek guidance, but don't blindly follow.

Launching a startup can be a daunting adventure because it challenges you to define what you stand for and want to accomplish in life. Start a business that's authentic to who you are, stay focused and always be open to suggestions. If you're a mission-driven entrepreneur, remember that building a truly great company is a marathon, not a sprint.

Josh Reeves

CEO of Gusto

Josh Reeves is the CEO and co-founder of Gusto, a startup on a mission to create a world where work empowers a better life. By making the most complicated business tasks simple and personal, Gusto is reimagining payroll, benefits and HR for modern companies. Gusto has offices in San Francisco and Denver, and its investors include Google Capital, General Catalyst, Kleiner Perkins Caufield & Byers and the founders of Instagram, Stripe, Nest, PayPal, Yelp, Box and Eventbrite, among others.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

James Clear Explains Why the 'Two Minute Rule' Is the Key to Long-Term Habit Building

The hardest step is usually the first one, he says. So make it short.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Living

Get Your Business a One-Year Sam's Club Membership for Just $14

Shop for office essentials, lunch for the team, appliances, electronics, and more.

Business News

Microsoft's New AI Can Make Photographs Sing and Talk — and It Already Has the Mona Lisa Lip-Syncing

The VASA-1 AI model was not trained on the Mona Lisa but could animate it anyway.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.