Open your eyes to customers and close your ears to doubters.
Every year, a crowd of ambitious, bright-eyed graduates walk out of the hallowed halls of their universities into the larger world outside. Among them, will be the next generation of founders, innovators, entrepreneurs and small business owners.
While some of them will be armed with detailed business plans, others might only have a head full of dreams. But before you pack away the interview suit or turn down a decent job, you should know whether you genuinely have what it takes to become an entrepreneur.
Here are some of the key lessons I’d want to share with recent grads hoping to start a business:
1. Let your WHY show the way
Before deciding what should be the nature of your business, understand why you want to start a business in the first place. It comes down to knowing yourself; understanding what brings you happiness and fulfillment.
As an entrepreneur, the significance of following your passion cannot be overplayed. In fact, as a founder, your passion will eventually be the key to ensuring that your company thrives and leaves an indelible mark on the business landscape.
Doing work that holds meaning for you will provide the motivation needed to get through the tumultuous times and rough patches that inevitably come with starting a new business.
The bottom line: You have to do what you love to build yourself a fulfilling career. Only then will you be able to dig in faster, and add value – both to the business and yourself.
2. Nothing beats due diligence
The only way to know for sure whether your idea that sounded great inside the dorm room could transform into a viable business is to do your research. Bide your time in understanding every element that goes into starting (and securing) your own business.
Debuting entrepreneurs often overlook basic due diligence (market research); and that’s precisely the reason why countless people have failed, considering there wasn’t a market at all for their idea to scale upwards. As an entrepreneur, you will have to rely on your instinct and take the occasional shots in the dark. But you will also have to ensure that your shots are, at least, directionally right.
It is good to start thinking like a millionaire from the onset. But before that, try to sell your idea – product or service -- to at least 10 genuine customers, and get real feedback from real people. This is a critical step that many aspiring entrepreneurs miss out on, only to regret later.
The bottom line: Immerse yourself in the minutiae of the industry that you have chosen. The two pillars of any business are finance and operations. Understand that first, as that will pay off multiple times over.
3. Build a solid business plan (focus on cash first, not profits)
It is difficult to not dive headfirst into building your business after you have already had the first spark of a brilliant idea. But remember that long-term success needs research and long-term planning; unless you want to end up like 96% of the businesses that fail to gather momentum and fall face first within the first ten years.
The tried-and-tested method to transform your idea to an actionable arrangement is by drawing up a watertight (yet flexible) business plan. Simply put, a business plan is a written document that seeks to describe in detail how a business – generally a new one – can achieve its goals (by analyzing your plan for sales, marketing, etc.). It can help your operate your business with a cohesive vision and a more streamlined approach.
Remember that creating a business plan is no mean feat; you will have to think every single piece of the jigsaw puzzle through.
The bottom line: As an aspiring founder, you will have to know your competition from close quarters. The best business plan should project your strengths, acknowledge various pain points and comprehend the competitive landscape.
4. Find a mentor
Finding trusted and experienced professionals, who have been there and done that, will help debuting entrepreneurs steer clear of the various pitfalls associated with business building. That’s because an honest mentor will be resourceful on many levels – provide you unbiased advice, connect you to a probable client, and help you out during challenging times.
You can open yourself up with your mentor – talk about topics that have always been daunting, ask questions you wouldn’t ask anyone else, discuss finances candidly, and share your wildest business dreams.
Not every mentor has to be a CEO worth in billions. He can be the founder of a successful company, a respected expert in his trade or a trusted consultant.
The bottom line: Few things can accelerate your learning curve more than a mentor with proven mettle. As a graduate aspiring to find the next big company, the synergy between you and your mentor can produce more significant value than the sum of the individual effects.
5. Understand your target audience – Client Hero
Your product (or service) might never see the light of the day if it does not speak to your customers, never mind how good it is. More importantly, even if your product speaks to you, you should be sure that it is precisely what your customers need as well.
Remember, your client is on a journey (of good health, more money, better relationship, or more success) but he has some challenges on the way. You have to understand what those challenges are and help your client overcome those challenges by offering a product or service at the point of challenge. Your client wants to feel like a hero of a movie by overcoming the challenges (say slay the villain and win the princess or pot of gold). You have to help your client achieve that.
Once you launch a beta version, you can rely on your customers for the necessary revisions and changes, ask them questions and know their pain points. You can also fall back on community wisdom and absorb information from your entrepreneur peers who had hit the road before you.
The bottom line: If you don't know your client well, you’ll succumb to competition because you’ll not have clarity on what differentiates you from the competition, and you’ll not be able to communicate your value proposition in a clear, concise and compelling fashion.
6. Secure your finances
According to a report, 82% of businesses shut down because of adverse cash flow issues. Depending on the kind of business, it might be crucial to commit your entire capital corpus and then raise some more capital for your company to come to fruition. While some entrepreneurs might choose to trust their funds, some will reach out to investors to accelerate the process.
Keep in mind that angel investors and venture capitalists use an intense vetting process to assess whether your business idea would hold water in the real world. So make sure your company is ready before reaching out.
The more comfortable you are with numbers, the better. That’s because it will take some time to secure a stable financial footing before you hire a full-time professional.
The bottom line: To become a successful entrepreneur, you will have to understand and manage your company’s financial aspects -- from financial analyses to budgeting and taxes.
7. Build a team
Hiring the right people can make or break your company, particularly when you are only starting. As per this report, 23% of businesses fail because they don’t have a good team in place.
However, before you hire, make sure that you can financially support another employee. Bear in mind the actual costs associated with it. While salary is likely to occupy a significant share, you will need to factor in aspects such as recruitment, payroll taxes, and training. You will also have to take a call on whether you want to offer any benefits package.
The bottom line: You must have a sound judgement of people and their capabilities before jumping on the hiring process. Only that way, you will be able to map a job role with the appropriate remuneration.
And finally, don’t get caught up comparing yourself to others. Starting a business straight out of college can mean little to no income, and immense dedication of your energy and time. You will see your friends landing routine jobs, developing new social circles and moving out in select groups. And let me tell you, it will not be easy to resist jealousy or even doubting the path that you have chosen.
But remember, life isn’t about getting caught up in the ‘Who went one step high?’ game, neither it is thinking about what you may be missing out on. Instead, survival and leaving a mark is about holding your ground, not giving up, and honing the long-term vision that you had set out with.
It is this mindset that will save you from throwing in the towel when the temptation of turning to a more conventional career path is at its highest.
Hitesh Porwal is a Certified Executive Coach and founder at WealthPal (www.wealthpal.in). Hitesh runs a 6-week online live coaching program for aspiring businessmen and entrepreneurs which helps them discover answer to the question: "What Business Can I Start, Given Who I Am?" You can find more about the program at https://www.wealthpal.in/entrepreneurship.aspx