Businesses fail all the time. SBA likes to throw statistics at you such as a 95% failure rate within a year of operation and so on. (But see the definitive small business failure rates.)
The reasons as to why businesses fail can be many. Here’s what I think. The reason most businesses fail is because entrepreneurship is a lifestyle shift, which most entrepreneurs do succeed in. It is, however, the mind shift that’s an integral part of entrepreneurship that remains incomplete. Most entrepreneurs do make mistakes during the startup phase.
Below are 9 entrepreneurship principles you shouldn’t forget, to help you be more successful.
9 Entrepreneurship Principles
It’s Never About the Economy; it’s Always About You
It’s easy to blame everything on the economy. The reality is that entrepreneurship has nothing to do with your idea, previous experience, education and training. Although all of these do help you later on.
Entrepreneurship is always about you. It’s about how you organize resources and manage them. It’s about how you market your business and it’s all about your commitment to see it through to the end.
You Aren’t Playing if You Aren’t Playing by the Numbers
If you are in business, you have to make those sales happen. The first hat you wear as an entrepreneur, apart from conceptualizing and designing your products and services, is that of a sales person. A sale manifests itself in various forms and doesn’t always lead to a financial transaction. Wooing investors, convincing customers to buy from you and roping in beta testers for your new startup are all successful sales closures.
As long as it’s about sales, there’s a cardinal rule that applies to it: It’s always a game of numbers while you focus on doing it right. The more customers you talk to, the more you’ll sell. Apply that rule to first hires, venture capitalists and everyone else involved in the startup phase.
Needless to say, rejections will come with 9 out of 10 interactions. It won’t matter since the 10th person is likely to buy. Rejection is the fuel that should keep entrepreneurship alive. Are you letting it fan that flame in your belly?
The new economy demands new approaches to business. The Internet has already turned the tables around. So when you are starting up, is your approach going to be contemporary or traditional? The contemporary route is going to pull you towards the rewards of using technology. You’d typically start a website; create a blog, set up social media accounts and one of the many tools available to run your business.
The traditional way still holds (depending on your business), but it still plugs itself into the contemporary way of doing business. That is, even brick-and-mortar business models will end up using technology.
Customers Are Humans; Not CRM Entries
Customers are not serial numbers. They aren’t entries in your CRM solution or on your accounting ledger. When entrepreneurs come up with ideas, they could fall in love with their own ideas, concepts and product prototypes that they forget that they are selling it to humans with the aim to solve a pressing problem with an effective solution. That process ought to reverse. Find the problem, come up with solutions for it, launch your product or service and then look to serve customers for life.
The story isn’t over after the sale. Serving customers to the best of your ability kicks in and stays over.
In a Sales Process, You Aren’t Important
Entrepreneurs are people too. They have needs as everyone does. That’s where the fault line is. Nowhere is it more visible than in the sales or deal making process itself.
If small business owners need a better conversion ratio in their sales process, they’d have to do the gargantuan task of “removing themselves” from the equation. Your idea might be unique, you’d have invested millions in product development and you’d have hired the best people your money could buy. Still, you aren’t important in the process; the customer is.
Just Shut Up
Entrepreneurship doesn’t earn you bragging rights. Nothing ever does. The more you tend to give away in a sales process or while making deals, the more you stand to lose.
How familiar are you with these elevator pitches?
“We are a edu-tech company with 8 different portals to facilitate online education in the emerging economies. We show up when learners demand better access to education. $8.5 billion in funding, and having bagged 3 prestigious Startup of the Year awards. ”
That pitch does sound nice but it’s got “you” written all over it. It’s not personable, it’s not customer-centric and it doesn’t even say how it benefits your client or customer. All it does is brag about how quickly you grew.
Entrepreneurship Without Vision is Abortive
Entrepreneurship itself is a visionary endeavor. While your broad vision for the company can change as you grow and explore opportunity, it should have one to begin with.
What do you aspire to be? How do you purport to serve customers as you grow? What, exactly, do you want to achieve?
What’s Your Plan?
No, you don’t need a business plan. At least, you don’t need to create a 67-page business plan with financials forecast for the next decade. Your business plan puts your ideas onto paper. It gives you a document to go back and refer to when you need to refocus your entrepreneurial efforts. It’s not etched in stone. It’s printed on paper or it might even sit as a document on your computer hard drive.
Change plans if you must. Dump the original plan and go for a completely new one. Whatever you do, print it on paper and keep it with you because it guides you along your way.
Not Knowing Is No Excuse
Most successful entrepreneurs are well-read, knowledge-hungry, information addicts. Reports, magazines, books and countless hours on the Internet are all in a day’s work for the typical new age entrepreneur.
It’s actually a pretty simple trait that’s still so powerful. Entrepreneurs cannot rest on their laurels. Changes are the only constant that everyone has to deal with. The only way small business owners can keep track of changing trends is by keeping on top of what’s happening in the world, in their industry and elsewhere.
Entrepreneurship keeps the world’s economy spinning. It’s the reason why jobs are created and new products and services are launched. Entrepreneurship is the sum of all the work that goes behind the scenes to bring us everything we enjoy, use and experience. None of that would have been possible if any of those entrepreneurs behind everything we have today had not acceded to even one of these fundamental entrepreneurship tenets.
So what’s the plan, entrepreneur?
Principles Photo via Shutterstock
Mark @ ThinkTraffic
Great post Pratik. This is a good reality check for anyone who is just starting out in business. The hardest challenges of being in business aren’t necessarily anything to do with the business iteself.
Being in business has taught me that the working day doesn’t matter, all that matters is getting job done – even if it is 1am on a sunday!
Of course it helps if you totally love what you do!
Mark, so true. Just don’t let the business overtake your life! 🙂
Good article. I especially like the “just shut up” principle.
Thanks Kip, glad you liked this piece.
Awesome piece, Pratik. It’s important to follow specific principals to ensure that your business has the best chance for success. You laid out some great points here for us to follow; thanks.
You’re welcome Ti, I’m glad to hear you got some good points to follow.
Very good insights Pratik. I have been in business for over 20 years and I can say that this is spot on. I really liked where you said “It’s always a game of numbers while you focus on doing it right. The more customers you talk to, the more you’ll sell.”. The fact is, you need to get out there and talk to customers or nothing will happen period.
So true – “it’s not about YOU!” Sales is all about service. Great post.
Very nice Pratik, Maybe you can define the difference between a plan and a business module. Anyway the way I see it
The Secret to a Successful Business
I use the word secret in the title simply because most businesses today do not understand
Or do not realise or do not utilise the main ingredient that drives any business to become successful. This is backed by the alarming rate of insolvency by professional tradespeople, professionals and small to medium businesses alike. Business success is a fine mix several important factors and this should be as follows
Expertise and proficiency to apply your skills to the highest quality
Satisfied Clients, for without clients you do not have a business.
Time management the ability to manage business life and family
Diversify be willing to make changes to have an edge
And the secret that really makes all this work is an understanding of your financial operations
Simply put Bookkeeping means the recording of all financial transactions.
The information you shared through your post is functional Pratik. And I would say that customers are the foundation in every company so it’s important to take extra care for them. These principles you have are of great guidelines for many entrepreneurs. Thanks!
Thank you for the post Pratik!
These points are truly effective and if I may add there is also the mindset aspect. Throughout my thirty something years of experience I have seen time after time that people would take themselves out of the game at the weirdest (to me) points along their path by inexplicably stopping! Whenever I asked them about it there was always a perfectly reasonable (to them) explanation. I ended up teaching this one little thing: whatever happens, STAY IN MOTION. Even when you are “stuck”; correct if you have to, but stay in motion!
Good points Pratik, especially the point about the economy. I started my business about four years ago and have found that the best opportunities come at times when the business environment is not that conducive.