Tips and strategies for first-time entrepreneurs
So, you want to start a business. But you’re not sure where to start, because you’re new to entrepreneurship. To put your mind at rest, you’re joining a big club. Almost 16% of America’s adult population class themselves as an entrepreneur. That’s 31 million people.
All these entrepreneurs have been where you are now. Feeling excited, nervous, hopeful, and hesitant. There are many challenges that entrepreneurs must overcome (link to article ‘7 Challenges entrepreneurs face when starting a business in the new normal’).
Here are six of the most critical considerations to mull over before you take the big step into entrepreneurship.
1. Your income will be inconsistent
Life in business is not like life in a job. You can never be certain about your paycheck. What you earn – especially if you are building a lifestyle business – will depend upon not only your own efforts but those of others in your fledgling team. They’ll also depend upon factors outside of your control (as we’ve witnessed through the COVID-19 pandemic).
On the flipside, with a good business plan and an effective business strategy, your income potential could be enhanced. And once that income starts coming in, you can develop as the lifestyle entrepreneur you aspire to be.
2. You must be prepared to do everything
You’ll be wearing a lot of hats, especially in the early days. You’ll have responsibility for marketing, sales, production, and customer service. The admin will fall on your shoulders, too. Even as you grow and employ people to fill these roles, you will still be responsible for them.
To be successful, you’ll need to work out what your strengths are and either improve your weaknesses or delegate such tasks to others – either by employing or outsourcing. When you’re starting out, this could put a strain on your funds. (Read my article ‘SBA finance and more – how can you fund your startup?’ (link to article) for some tips on financing your startup.)
3. You will need support
Life as an entrepreneur is very satisfying. Building a business that you love and that allows you to lead the life you desire is a huge reward. But it can also be lonely. You’ll spend more hours in your business than you’ll admit – it’s kind of addictive.
Of course, the actual hours you spend in your business will depend on how much income you wish to create. Some entrepreneurs create the success they desire by working 30 hours or fewer. Some successful entrepreneurs, like Gary Vaynerchuk, spend as many as 95 hours each week for the first year of starting a new business.
Your support network will help to encourage you through the roller coaster journey of starting a business. This includes friends, family, and your business mentor.
4. You’ll need to understand your niche
There are three things you really must answer:
- What’s your area of expertise?
- How can you monetize this (what will you sell – your time, your skills, your products)?
- Who are your customers?
Ask around to see what you are good at. Speak to family, friends, and colleagues. Think about what advice people ask you for, or what people ask your help with.
You’ll need to do some serious market research to discover what opportunities are in your field of expertise, what customers want, and what competition you will have. All these things feed into your business plan.
5. You’ll need to figure out how much to charge
This is harder than it sounds. You’ve got to pitch your pricing at the right level. As a startup, you may be tempted to undercut your competition. But once set, prices could be hard to increase. Then there’s the issues of being seen to be ‘cheap’ – and a cheap service or product is usually viewed as cheap for a reason (because it’s substandard).
Whatever you charge, it needs to be enough to run your business and pay you a salary. Oh, and don’t forget taxes, investment into the business, and payment of business financing.
6. You could be the worst boss you’ve ever had!
While working for yourself sounds great, it also means you’ve got to be your own boss. You might just turn out to be poor at managing yourself. You’ll have to be disciplined, motivated, good at time management, and keep on top of your own productivity. If you give in to disruptions and distractions, you’ll spend more time in your business making up for your poor discipline.
Here’s what I know
You must be prepared for pain before the gain.
If you are considering life as a lifestyle entrepreneur, be prepared for some pain before the gain. Getting a business off the ground is hard work. You’ll need to be prepared for fluctuating income, potentially long hours, and undertaking tasks that you need to learn quickly.
Until you develop some business momentum, you’re unlikely to have more time or the freedom you crave. You’ll need to be good with customers, and develop a selling mentality.
But here’s the thing. If you’re passionate about doing this, believe in yourself, and are committed to success, then you are more likely to succeed. And when you do, every ounce of effort you have put in will be worth it.
What do you think will be your biggest challenge as a first-time entrepreneur? Are you ready to accept the pain before the gain? How much thought have you given to your business niche?
Let me know your entrepreneurial dreams and dreads, and I’ll address them with more entrepreneur tips and strategies in future articles.