Practical Lessons for Entrepreneurs

Anyone who dreams of doing something big, doing something worthwhile, or increasing their earning potential, has taken a serious look at starting their own business.

If you are an entrepreneur or have spent time around them, you will have come to realize there are some fundamental practices that entrepreneurs tend to hold in common. In the midst of being busy, we can forget some of the fundamentals that help make a business successful. Here's some practical advice garnered from a variety of sources.

For those wanting to start a new business, make sure that whatever product or service you are offering are something people need, will spend money on, and can afford. If the answer to any of these is "no" – look for another idea. You will wear yourself to the bone trying to convince people to buy from you if they don't really see the need for it in their life, or can't see themselves spending their hard earned cash on it.

Don't make things complicated. Use the KISS principle – Keep It Simple, Stupid! The most successful businesses are often those that provide a simple solution to an annoying problem.

Entrepreneurs benefit most by hanging out with other entrepreneurs. No one knows better what you are going through, and no one can advise you better than someone with experience, or with a different perspective than yours. Whether you join a group, or make a group, the synergy of several minds will always be greater than that of just one person. Besides, if you have to cry on someone's shoulder, there's no one that understands better, but who can also give you the nudge (or the kick in the pants) to get back in the game.

No one cares as much as you. Owning a business demands time and attention – yours! Don't depend on your employees to take the same care or make decisions that benefit your business the same way as you do. If you are delegating tasks, make sure the people you are delegating to have the skills to maintain the standards you have set, and not fall beneath them. Set up a system of evaluation so you can make sure the standards persist.

Work on the business, not IN it. Your job as a business owner is to manage, not necessarily do all the day to day tasks. Often entrepreneurs find themselves swept into the everyday operations of the business and don't take time to plan and oversee the business from the top. This is typical of most start-up businesses, but as you grow, if you don't transition into managing instead of tasking, this can result in feelings of being overwhelmed and frustrated, not to mention getting plain worn out. Learn the art of delegation. Find people to do the operational tasks and be the dog that wags the tail, not vice versa.

Find a mentor. Nothing serves you better than learning at the feet of someone who has "been there, done that." They can cut through the crap and tell you what you really need to know to be successful – or, if they weren't successful, they will at least be able to tell you what pitfalls to avoid.

Learn and keep learning, but don't depend on a school degree to turn you into an entrepreneur. Unless it is a legal requirement of the industry you have chosen to work in, like an accountant, therapist, etc. , chances are it will fall very short of giving you what you need to be successful as an entrepreneur. Many entrepreneurs will tell you that what they learned running their own business just isn't taught in a classroom. Look around for conferences and seminars that tackle the problems you are facing head-on with practical information and advice. There's some really interesting stuff on the Internet that you can access for free. Courses that can be helpful for any entrepreneur are Contract Law and Basic Accounting. Your accountant can clue you in pretty fast on the points that really matter to your particular business but it doesn't hurt to know how to read an income or balance statement properly. And knowing a bit about contracts can keep you out of some sticky situations.

Keep your overhead down. Can you work from a virtual office? Can your employees work from their homes? You can often buy or "rent" software that keeps track of your client lists, accounts, and invoicing. Having software that can process tasks you'd have to otherwise hire someone to do can cut down on your staffing costs. Salaries can really add up. Computer technology like Go To Meeting can eliminate the need for an office and cost you pennies compared to the cost of rent, utilities, phone systems, security systems, to name just a few of the expenses that get tied into a normal office. Can you barter services with other businesses ? Do they need something you have and vice versa?

Be realistic about time and expenses. Some entrepreneurs say that when they estimate a job, they figure out the time and expense. Then, they double the time, double the expense, and halve the results. That's probably closer to the truth for most entrepreneurs. Many underestimate the amount of time and money it will take to get their business off the ground and keep it afloat until it can start earning a profit. Entrepreneurial ventures can be tremendously rewarding, don't let this discourage you - just be realistic about the cost and count it into the equation. Be prepared to work harder and longer than you'd planned.

What does a profit look like? It's not a true profit until you are earning an adequate salary, have paid off your line of credit and have money left over. Some businesses operate from a revolving line of credit – that's how they do business – but unless they have the receivables to pay the loan off the day they close the business, or sell it, it's not really a profit. Some think that if they can earn a decent salary, they've made it as an entrepreneur. Nothing against this, but you've just bought yourself a job, not a business.

Leave worrying for another day. One of the biggest battles you will fight will take place in your own mind. It's called worry, and it manifests itself in stress, confusion and a depletion of energy. It's been said that of all the worries one has, only a small fraction of them ever come to fruition. Many of us think that worrying will achieve something. I figure I'm doing something if at least I'm worrying! But worrying will rob your positive energy, clarity and enjoyment of life. Figure out a way to deal with worry. Perhaps plan an hour of worry once a week – write all your worries down and plan to worry about them on Thursday between 2 – 3pm. That way you don't have to worry about them now or have them interfere with your work or sleep. By the time Thursday rolls around, there's probably very little left to worry about. Try it. You'll see.

Build your business around a vision, and a brand. What do you really want to achieve – put it in one clear sentence or two. Then, how will you explain it to others – that's where the branding comes in. A brand, whether conveyed by image or words, should be expressive, emotional and real. Make it something people will hear or see and instantly relate to on an emotional level. The green easy chair used by TD Canada Trust is one example of branding that says it all in one image... they make banking easy and comfortable. Lay's potato chips – "Bet you can't eat just one" tells us how irresistibly good they are. Ford trucks are "built Ford tough". Don't try to say too much. Grab one point and build upon it – that's branding. Volvo's branding imagery and copy has one message – safety.

Entrepreneurs take risks – calculated risks. As much as you hear about some people throwing caution to the wind and just going for it, that's not the modus operandi of most entrepreneurs. Successful entrepreneurs carefully evaluate the pros and cons, the amount of risk involved, their resources, their competition and their allies – and then they will take appropriate action.

Execute. Plan well, but always execute. Some people have Plan A, Plan B, and some other contingency plans, and spend so much time getting it right, they never get it done. Write down what you will do, who will do it, and when it will be done by, and then follow through.

Learn to talk about your business in sound bites. Have you heard about elevator pitches? If you were to step into an elevator with a potential buyer or investor and you have between Floor 1 and Floor 10 to pitch them in a way they won't forget, what would you say? You should be able to tell people what your business is about in 30 seconds or less. It should get the point across in an appealing way that has the executive handing you their card, saying "I'd like to hear more about that" or inviting you to step off the elevator into their office so they can ask a few more questions. Mission accomplished.

If you are an entrepreneur, you are a salesperson. Your business relies on you to sell it to customers, to suppliers, to the marketplace, even to employees. You can hire, at an expense, people to do this for you – sales people, managers, media companies, advertising agencies, etc. Often they can help you, but they can never replace you. If you don't know what you've got, can't articulate it, and don't put any thought or effort into marketing it, you'll find it hard to make a go of it.

Learn how to ask for what you want. If you need help, ask for it. If you need a sale, ask for it.

Learn how to negotiate. Whether you are working with a client or a supplier, learn the art of negotiation. You can often up-sell a client. You can often get a lower price on a service or product - just by asking.

Whether you are just starting or have been an entrepreneur for a long time, these are elements of the trade that can be applied to almost any business. Successful business owners aren't born with an entrepreneurial gene. They've watched, read, and evaluated and taken a calculated risk. They've used common sense, creativity, and tenacity. Their willingness to learn from not only their own experiences, but that of others, was what put them on the road they are on, and a willingness to keep learning will serve them well into the future.

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