When someone starts a business, they seldom consider the fundamental rules of entrepreneurial success. We experience information excess and distractions pointing us to a better way to do everything. All of these distractions keep our eyes off the fundamentals of business success. I call this “chasing shiny objects” and have fallen victim to this phenomena as well.
Let’s explore a few of the fundamental rules of building a successful business.
- Know WHY you are in this business and WHERE you want to go with it:
There are plenty of reasons why businesses are started. Many businesses are started for emotional reasons. Examples include escaping having a boss or thinking more money can be made being an entrepreneur. Be assured it is not going to happen overnight.
A fascinating assumption is that you can work fewer hours as a business owner. The reasons sound great, but reality provides a much different conclusion.
As Baby Boomers approach retirement age, they become concerned about having enough money to live as they dreamed. This is a powerful and compelling “why”. Starting a “side hustle” or new business has become very popular among this growing population. Statistics show us the over half of small business are owned by those between 55 and 80. I will soon release my course, “The 90 Day Boomer Business Startup Course” that helps this group explore and create a business or additional income sources.
Why would you want to start a business? When you have an impelling why you are starting a business, you will be significantly more inclined to overcome the inevitable “bumps in the road” and stay focused.
As you clearly define your why and where you want to go with your business, it is critical that you create a business plan. In your plan state specifically who your target market is, your business structure, the financial projections along with the dates and milestones you expect to meet.
Review your progress often against your plans. Knowing that you are on track with your why is assurance that you will stay the course and be able to adjust your activities as needed for success.
- Learn to sell – you need revenue to succeed:
You can create a great website, the perfect logo, have a social media presence and the best location. When you don’t have paying customers, it may mean you are not selling the right way.
Be aware of your skills and grow them. Take a sales course like Dale Carnegie. Selling is an art and not a science. Learn the relationship aspects of selling by knowing your customers well and what they want. Customer’s needs must be put before your desire to close the deal.
Learning to be a good salesperson means knowing how to network. Hang out where your customers might be. Hanging out can mean online as well. Join Facebook groups, Linkedin groups, and other online forums and communities.
- Sell what your customers need and want:
Make sure your target customers accept your product as a solution to their problem. Be certain the value is equivalent to the price you are charging. You might be able to sell your product for more if you do your job right!
Picking the right target market is important. Often referred to as “niche”, it is much easier if you pick the target customer who has specific problems you understand and can solve. Be careful not to target too broad or narrow of an audience. Start with a broad group of potential customers and drill down so that there is a balance of the number of customers and a need for your solution.
The optimum scenario is where you create a solution that is dominantly accepted in a niche so that customers come to you. This eliminates the need to chase them with hard sell tactics.
- Cash flow is the absolute measure of success:
Creating big profits come only after you experience consistent cash flow. Cash flow is the change in cash balance over a period: positive if the cash balance increases, negative if the cash balance decreases.
In a recent online poll, I took of small business owners, cash flow was overwhelmingly the biggest concern. My response provided some simple perspectives to the need for better cash flow.
Over time as cash flow increases, you will start to experience momentum that fuels business growth. Growth will sustain a healthy business in all aspects. With strong cash flow and profits, you can add products and services, hire people, create new markets and attract more customers. This is the ultimate compound effect of money and capital.
The fundamentals discussed here are not the only rules that we must follow. Entrepreneurship can be complex and a daunting task that the meek should not consume. Having said that, you should not ignore the “tug” that comes when you want to pursue a dream of being your own boss.
Being an entrepreneur can be the most inspirational and rewarding career path you ever choose. Make your choices wisely and make sure you know the fundamentals before you take that journey to keep your business on track.
For a limited time, I am offering my Entrepreneur Fundamentals Course and am including a special bonus coaching session and assessment. This is an $800 value! Learn more by selecting the course information link above.