Entrepreneurs are the most passionate and energetic people when they got to summon their ideas that they believe would lead them to riches. However, before you jump into renting an office space and hiring staffs, these 7 tips may be useful for you to consider before you start a business.
Many would-be entrepreneurs are held back by fears of failure due to the risks of starting a business, especially those involving lots of time commitments and start-up capital. But there are ways to lessen those risks — by taking a smart, calculated risk, step-by-step approach to getting ready to launch. Before you start hiring staffs and blowing your marketing campaigns, consider these 7 friendly tips to be factored into your business.
Here are seven fundamental steps for planning a low-risk launches and tips you can take as an early-stage entrepreneur:
1. Know how you’ll fund it. There are many costs to starting a business, even if it’s an online one. Do you have money saved up, or access to a credit line you could tap? Will you work a side job? Get relatives to help you? Have a strategy for how you will pay for business expenses or better, go for a grant or a funding option here.
2. Be realistic about business set up time. Even with a simple business idea, expect it will be at least six months to a year before the business starts throwing off enough cash to support you. Know how you will cover your living expenses until then. Many entrepreneurs become consultants, academics or freelance workers at the time being to fund their enterprises during the initial set up stages.
3. Keep overhead low. See how you could start getting sales before paying rent on a big retail store. Try a kiosk, direct sales, e-commerce or even renting space within an existing store. Remember, having more employees does not mean that you are running a multimillion dollar business – It just means, your business needs to deploy more resources, hence more expenses to get in, the income. But with the advent of the internet, think about limiting overheads when you are starting out and leveraging your work with out-sourcing and technology available.
4. Have a business model. Just because Silicon Valley’s celebrated children like Twitter, Facebook and Groupon’s founders started without having any idea of how their businesses would make money doesn’t mean you should do the same (Especially when you are not living in Silicon Valley and are based in Asia or Malaysia). The reality is the vast majority of businesses that begin this way will fail. Figure out a revenue model at the start and work on it.
5. Test your idea out on prospective customers. It’s better to find out if nobody would buy your product before you invest time and money in launching it. Get feedback about whether there is a real market for what you want to sell. Surveys online would work as well and be sure to test out on real potential customers and not just among your friends and families who would obviously love your products no matter how bad it is.
6. Be ready to evolve your idea. Venture funders like founders who know how to “fail fast.” Don’t cling to what’s not working. One key entrepreneurial skill is quickly recognizing problems and testing out new twists on an idea until you find the approach to which customers respond.
7. Build your network. You will not succeed at this alone. Find other entrepreneurs and mentors who will be a sounding board and share their experiences about business success with you. Networking platforms are available out there. University chapters or your Rotary Clubs are great platforms to start!
If you decide to go for it and start a business, be committed to it. If you’re not passionate about what you’re trying to do, you probably won’t stick out the inevitable bumps in the road.
Note: Original article was adopted from Entrepreneur.com, with credits to Carol Tice. Entrepreneurs.my article was modified to fit the reading preferences of Malaysian entrepreneurs and its wider audiences.
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