With so many successful multinationals out there, that seem to be closing deals for millions and billions all the time, one might think that being successful in business couldn’t be that difficult. Well, that’s until you are in the driver’s seat and you are the one faced with all the tough decisions.
Being successful is all about making the right decisions at the right time. Whether to invest in that company or the other, to hire a certain professional or not, to expand your business or not – these and many other smaller and larger scale decisions are what makes the difference between successful and unsuccessful businesses.
As with everything in life, the beginning is the hardest in business too. There are a lot of question marks, many challenges along the way and you need to be flexible and determined to survive.
In my experience, I have found that there are 10 prerequisites for a successful entrepreneur.
Passion
The single most important factor for success is that you are truly passionate about what you are doing. This is no surprise as with passion comes dedication that will not only help you through all the obstacles that every entrepreneur inevitably encounters, but also will inspire people around you.
How do you keep your entrepreneurial spirit in shape? True entrepreneurs are known for being workaholics who are constantly busy juggling with work, personal commitments, hobbies, etc.
Having physical and mental agility is an absolute must. Try to find time to keep both you mind and body in shape. Do exercise, whether it is jogging, swimming or anything else, but also find half an hour a day to read business publications and generally try to stay informed.
Being in good shape both mentally and physically has a proven positive knock on effect on general wellbeing, productivity and creativity.
Capital
Financial resources are of course crucial to every business and starting off, it is really important to have a clear strategy in place as to how you will access capital when you need it. Keep in mind that you will probably need more than you plan for at any given stage so you need to have some resources that you can tap into if need be.
Being able to plan on your potential financial needs can make the difference between failure and success. Having a vision in mind is an absolute must but cash is what can turn it into reality. Plan your financial needs and plan them well.
Think about what resources you have at disposal and who you could turn to if necessary. Also don’t spend every cent at the very beginning. There are expenses when your business takes off too.
Structure
The structure of a business is also essential. As seen during the recession, the majority of the companies out there are only a few decisions away from going under. You never know, nobody is insured against an economic downturn. Clearly, the last thing you want is to be personally liable in the case of a bad scenario.
With that in mind, you might want to consider the legal format of your company from the very beginning. The best structure for most businesses is a limited company, for liability reasons indeed.
Have the proper entity and compliance in place, and find out what licenses and forms you are required to file so that you avoid any future problems in this area.
Support Team
One of the hardest steps for an entrepreneur to do is hand over control. Yet, as the company grows it is harder and harder for a single person to plan, execute and control everything from vision to implementation to daily tasks and follow ups on the process.
Even if you are the most talented, smartest, most diligent person, managing a company is not a one – man show kind of job, it simply isn’t feasible.
You need to have a team of people you can trust, from colleagues (even if just a few) to mentors, suppliers and even friend entrepreneurs who can support you with advice and help along the way.
Marketing and Business Development
Marketing is essential for every company at every stage. It brings your products to your clients, it gets your message across. Having the best product out there, when not advertised or poorly advertised, is like having no product at all.
Marketing and business development are an area of the business that will require your constant attention. Trends change fast, competitors come up with new ideas and perceptions change. Be alert, think outside the box and look for new approaches to stay ahead.
Do invest money and time in business development and marketing efforts. Remember, this is what brings money back into your company.
Value
Value is what people pay for. Consequently, the most important element of every business is how it creates value for its customers. Being able to identify what it is that you are able to do for your clients is a stepping stone.
Once you’ve identified that, you can think about ways to create more of it which will in turn give you a competitive edge.
Keep in mind that the packaging, figuratively speaking, is just as important. You need to articulate the value you create for your clients in a clear and concise way
The Right Mind set
Ever heard the phrase: don’t work harder work smarter? I’m sure you have. But have you really, really thought about what it means?
When starting your own business you will need to manage your different resources: money, time, skills.
Don’t be afraid to delegate, it will save you a lot of time that you can invest in doing what others can’t do for you. Whether it is spending time with your family or working on a new vision for your company.
Don’t micro manage, create a culture of trial and error so people are not afraid to experiment. Sometimes mistakes lead to the greatest discoveries. Also, as people feel that they are given more responsibility, they will try to excel. Not to mention that people will more easily identify with the values of your company and will feel more a part of it if they see that their ideas and opinions matter.
Be alert, be open to ideas. Once you’ve found a winning strategy, it is very easy to fall into a routine and close your eyes to other opportunities. Don’t forget, however, that there are many roads to success. Read, listen, be awake.
Financial Reporting
Being a numbers wizard really isn’t for everyone, I think we can all agree on that. Some people get the chills even at the mention of the word financial. Including a lot of small business owners.
Yet, being able to understand and interpret your financial reports could be crucial to your success. At any given stage you need to know if you are profitable and how profitable you are so you can adjust and act accordingly.
Not being good at the financial side of the business is not a crime but if you do know that, you need to get some tools or external help. Consider investing in some of the latest financial software that can prove a vital tool in this regard.
IT Systems and Procedures
Creating and sharing that knowledge is one of the greatest challenges today, especially for larger corporations. This might not be that difficult when you start off and there’s only a few people in the company. At this stage everybody knows what the others are doing, how they are doing it and where it could be accessed.
As the business grows however, the communication gets harder and thus there need to be some rules in place. What are the procedures in a certain situation, how documents are written, how information is saved and accessed, etc.
Having rules in place will not only save everybody time but also mistakes and frustration will be avoided.
Business Plan and Exit
Of course nobody likes to think of an exit strategy when they are starting off a business and have all those great ideas that they want to bring to life. However, having a plan with specific goals, steps, timeframes and eventualities is essential.
First of all, it means that you know what you need to do in what sequence. Secondly, you can measure progress and success at each stage. And finally, this means that you are prepared for different scenarios as neither life nor business can ever be completely under our control.
In many cases, business owners neglect to write out their exit strategy for the business. But do those around you know what to do with the business if you’re not on this earth tomorrow?
Being an entrepreneur is not only about having freedom and managing your own time. It is a challenging job that requires a lot of determination, being resourceful and most importantly believing in what you have to offer people. Whatever obstacles you encounter along the way, try to always remember what made you start in the first place. With good planning, some resources and passion nothing is impossible.