Becoming an entrepreneur is one of the most challenging tasks to undertake. Many people have great ideas, yet very few have taken those ideas from conception to reality. Even among those lucky enough to start their own business, an infinitesimally smaller number of them have successfully reaped the fruits of their hard labor. The reason is that entrepreneurship requires a lot more than just a product to sell or services to offer. It requires commitment, determination, and perseverance. Very few entrepreneurs succeed in their first projects. For many, it’s a decade-old mission until they finally hit something that works.
While success in entrepreneurship is not guaranteed, the cost of failure can be minimized if one embarks on it with a clear mind. These are the five basic steps each entrepreneur must take to maximize their individual chances of success:
- Create a mission statement. While often overlooked, a clearly defined mission statement can play a pivotal role in propelling a company to success. The business states its core value in the mission statement, which can help it stand out among competitors.
- Conduct a SWOT analysis to determine the business’s strengths, weaknesses, opportunities, and threats. Nothing is new under the sun. No matter how original your idea is, you’re likely to encounter a plethora of competitors who have already occupied the market. A good SWOT analysis will help you to not just prepare for risks, but more importantly, to define your targeted niche.
- Develop a budget and determine ongoing cash flows. I once mentored a business who thought growing her company meant increasing her headcount. It’s important to have a clear budget and keep expenses to a minimum, especially during the venture’s early stage. Resist the strong temptation of spending on items that are not essential to the business’s success.
- Raise capital. Most entrepreneurs do not have personal assets to start or run their company. If you are in this category, it is likely you’re going to rely on an outside source to fund your business. If so, be prepared to make a pitch for why someone should invest in you.
- Build out the company’s senior leadership team. The most important assets of any business are its human capital. At the very early stage of the venture, the senior leadership team can play a double-role as employee/advisor. Therefore, it is important to select a team whose values are aligned to yours and with whom you can easily get along.
In conclusion, starting a business is like building a machine. It is important to align the pieces properly so they each can fulfill their assigned mission.