Working for somebody else, but wishing you could work for yourself? Have an MBA but not using your credentials and knowledge to be an entrepreneur? There’s a valid reason for this. Entrepreneurial tendencies are risky and scary. It’s much worse than jumping out of a functioning airplane with a parachute. Your chances of survival when skydiving are 99 point something percent. With business, having entrepreneurial tendencies, your odds are much much worse. Terrible, in fact. Most businesses fail.
Regardless…you have entrepreneurial tendencies, and it nags at you day in and day out.
Many TV shows will cater to your entrepreneurial tendencies, but they are just a drug that eventually wears off. Shark Tank y The Profit, just to name two, get you excited. They provide an escape while watching other entrepreneurs make it happen. There is much to learn from shows like these – they’re hosted by renowned, accomplished entrepreneurs. But, they’re just windows into other people’s entrepreneurial tendencies. Reality always sets in. You really have your own entrepreneurial tendencies.
First, please understand – there are many more facets to business than most people realize. Most everyone has novel ideas at some point in their life, yet they do nothing about it. And sometimes, when they see it appear in the market, they complain that THEY could have done that. Then, if they start a business, failure generally occurs due to lack of due-diligence – proper planning – and proper business plan execution.
Business planning, which includes sales and marketing strategies, customer service strategies, and a great deal of research and data analysis, must be done up-front – before you go into business – before you exercise your entrepreneurial tendencies.
Your entrepreneurial tendencies
The good news is, your entrepreneurial tendencies can be developed. And you don’t need an MBA to do it. That being said, you do need to have the right traits. Not everyone is cut out to exercise their entrepreneurial tendencies. The first thing you need to do is evaluate your entrepreneurial tendencies – honestly. I can help you with this!
First I’ll to put you to the test by revealing the pitfalls of business ownership. Then I’ll show you what you need to know to exercise your entrepreneurial tendencies. You may not need an MBA to be an entrepreneur, but you do need to understand some things first. After that, we’ll look at your ideas and test them out. How well will your products or services stand in today’s marketplace? Let’s get started!
Let’s look at the rigors of business. I’ll present a shortened version, of just the cons, as described in Business Ownership – Cons Before Pros. Time to test the strength of your entrepreneurial tendencies!
Do you have great patience and dedication?
Turning an idea into a business is a huge undertaking. It requires great patience, due-diligence and dedication. You must practice careful strategic planning and execution through each step of your venture over a great many months or even a few years to be successful. From performing proper marketing research to knowing all about your competitors, you must dive into the nitty-gritty each step of the way to protect your business from being blind-sided.
Can you handle being responsible for EVERYTHING?
Here’s a list of some major responsibilities you will face if you wish to exercise your entrepreneurial tendencies:
You must run your business properly, legally and by following all government regulations with open transparency to remain accountable. If you make your entrepreneurial tendencies real, you must stay legal.
Obey all obligations to your financiers, employees, and customers. They are the foundation that you stand on as a business owner so please pay them the respect they deserve!
Ensure your business has ample funds to operate at all times. Planning is key to keeping money in the bank, so you must always stay on top of that. Unforeseen expenses occur frequently.
As a business owner, you’re fully responsible for the upkeep, security, health and safety, insurance, and legal and government regulation compliance.
Maintaining insurance is a required fact of life for an entrepreneurial business owner, and there are many types.
Contracts and agreements
You may offer services with a contract, or with an SLA (Service Level Agreement). Also, you might have a lease contract for your business location. Certainly insurance and other services provided, like building security, entail contracts too.
Be sure to file quarterly. If you don’t, and you’re not making any money yet, you’ll go from owing very little, to owing very much because of the penalties for not filing.
Planning and strategy
As I mentioned in number 1: Patience and dedication are required, planning and strategy is YOUR responsibility. The business with the best plan will always lose when they suffer from plan-execution-spin-out.
This is how you’ll inform the public about your product or service – marketing. And it requires much research and calculated execution. You may have an amazing product or service. Or you may be a great sales person. In fact, you may have the best sales people ever. But none of that matters if nobody comes to take a look.
Customer service is arguably just as important as the product itself. In today’s marketplace, the public expects good customer service. It is your responsibility to deliver stellar customer service that goes above and beyond what is expected.
As you grow your business, you will probably hire employees. In doing this, you take on the responsibilities of screening, interviewing and hiring them. Then, you will be responsible for training, managing and paying them. As the business owner, you need to pay half of their social security payments and you need to pay unemployment insurance. Tax withholding management will also be required. And don’t forget about insurance!
Can you work long hours…all of the time?
If you think you can work a 40 hour week when you start a business, you are clearly mistaken. If that is your desire, it would be best for you to get a regular full-time job, and then consider being entrepreneurial part-time…on the side.
How well do you deal with personal issues?
You will probably encounter most of these personal issues while running a business:
Any of these can hinder your ability to exercise your entrepreneurial tendencies successfully.
Can you deal with fierce competition?
If you find or create a new market, you may fall victim to a lion in search of prey. Whenever a smaller animal makes a kill, a lion soon finds it and takes it. Big companies are always in search of new avenues, and when they find a company that has started to exploit one, they come in and take over. Do you still have entrepreneurial tendencies?
It’s time to answer the question: Do you have what it takes to exercise your entrepreneurial tendencies? If you are unsure, please don’t proceed. That wouldn’t be good. You’ll only become another negative statistic. The odds of success are too poor to enter business ownership if you’re not 100% certain you have what it takes.
Those with doubt, thank you for reading up to this point. I wish you the best in your career, there are many good companies out there to work for.
You have what it takes to exercise your entrepreneurial tendencies, so let’s take those entrepreneurial tendencies and turn them into entrepreneurship!
Where to start
It all begins with planning. Not a formal business plan, like the type used to raise capital, but an action plan. A guide developed by you. This plan will answer key questions and guide your decisions.
What does plan really mean? It is defined as a scheme or method of acting, doing, proceeding, making, etc., developed in advance.
If you’re a military General, will you go to battle without a plan? Of course not! So why would you go into business without one? The marketplace is quite a battle-field with many foes who are ready to fight (compete) with you. Put in the effort and cover all of the angles. Consider this action-plan your battle-plan, since you will need it to compete.
Knowledge and experience are your weapons, and if they’re sharp, you’ll compete well. The problem is strategy. Knowing where to start and how to proceed. Eight-out-of-ten businesses fail after 18 months, statistically. The primary reason for failure by the intelligent entrepreneurs is lack of proper planning. You can overcome just about any obstacle in life if you fully understand it, and then devise an effective strategy to overcome it. Be a calculated decision-maker and your chances of success will be high.
Please take a moment and read The Quintessential Business Startup Strategy. It covers what will go into your plan and your strategy before starting a business:
Fully educate yourself regarding your industry, your target audience (demographics), your competition and the economic conditions. Anticipate how your customer base will react to your idea, and how your competition will make their moves when you enter the market.
Document the weaknesses of your competitors and then target them. The knowledge you gain from this research will be used to form an effective tactical plan. It will allow you to anticipate outcomes and prepare for pitfalls.
All of this preparation helps define your business model…the purpose and process of your new venture. Your business model will also include target audience definition and distribution-channel identification…how you’ll receive goods and how you’ll deliver products to your customers.
Who are the suppliers and vendors you’ll use and what kind of bargaining power can you bring to the table? You always need to keep costs down to improve profit margins. Arm yourself with an understanding of how to negotiate deals. If you understand the potential market-share, and you can back that up with tangible facts and figures, you’ll convince them to sweeten the deal in your favor.
How competitive is your industry? Analyze what makes the successful businesses tick. Understand exactly what the poor performers are doing wrong. Dive into expected profit margins in your market. Tough competition tends to drive those margins down. Learn how profitable your competition really is.
What is the market structure of your industry? Determine the number of firms that exist in your industry and how large they are. The market entry conditions must be fully understood. That is where and how companies typically do business (meet and connect) with their customers.
Determine the product or service differentiation in your field. Know how many types of products or services there are…what differences exist. Understanding and defining your market structure will prepare you to operate tactfully in your industry.
Challenging the status quo
Challenge the status quo…the existing state of affairs. Maybe you can come up with a new way to do business in your industry. Be a game-changer! To really understand how to challenge the status quo, please read the following article: Game Changer – Challenging the Status Quo
The object here is to compete with the status quo instead of your competition. When you compete with them, you must convince your customers to pick you over your competitors. Unfortunately, many customers choose to not make the purchase at all. They may decide to just keep things how they are. It’s an expense, an inconvenience, and they have other priorities.
Present a new and exciting way to do business in your industry. Provide convenience or value in the market structure rather than with a special product. Your competitors can imitate hot products easily but, they’ll be blind-sided by changes in the status quo. Their infrastructure is based on current market structure. Make them trip!
Define your target audience
Who are your demographics…what makes them tick? To start, the SBA (Small Business Administration) provides many such market research tools. Local economic indicators are available for your geographic area of interest which includes income and employment statistics along with others. Visit the Bureau of Economic Analysis to find a barrage of economic indicators that will provide key data about the region you wish to do business in. Or you can use this to find a good target region. There is a wealth of other tools and resources for those with entrepreneurial tendencies. They including business training, financial support, and a broad network of affiliates ready to help.
You will need to know how your target audience reacts to your idea. Perform Qualitative research using focus groups and Quantitative research using surveys and questionnaires to perform effective market studies.
Now that you understand what the public thinks about you, make any necessary adjustments for marketability. Then your advertising may be very effective.
For an in-depth explanation showing how to perform all of this market research, please read: Effective Marketing Strategies
There is much more to marketing than you may realize…and it is essential for success. Marketing brings the customers…your target audience, to your door.
Investigate them. Discover who and how loyal their customers are. Determine the yearly sales volumes of your competitors. Detail their strategies. Read customer feedback and gain insight from resources like Better Business Bureau about your competition.
Study indicators like longevity so you can determine how long each competitor has been in business. Review their history to understand what changes they have undergone over the years and why.
Knowing who your competitors are and what makes them tick will allow you to survive as you compete with them. I’ll compare your competitors to sharks. If you dive with sharks, you need to have a properly designed cage to ensure they can’t bite through it. Also, you need to understand sharks and fear them without being afraid, if you wish to swim with them not using a cage. It’s the same with business. You can swim with your competition if you understand them. And you must have a healthy fear of what they’re capable of. A nice thought may be…you are much smarter than sharks!
How are your products or services different from the competition? What makes them better? If you plan to enter the market with another version of an existing product, there needs to be an advantage to yours. Quality, functionality, price, or appearance, just to name a few factors that can vary. First must identify existing differentiation among in the market. Then perform a comparative analysis to provide confidence about ample differences or advantages.
How important is customer retention to your business? One of the biggest strengths your company can posses is the ability to retain loyal customers. When your clientele is out there promoting your company with word-of-mouth marketing, and they feel disgust whenever viewing an ad from your competitor, you’ve successfully driven the value of your brand deep into their hearts.
For those just starting to exercise their entrepreneurial tendencies, when they don’t have brand recognition, they’re easily forgotten. You must deliver stellar customer service that goes above and beyond what is expected, and with a carefully calculated, strategic approach.
In the following article, I reveal the bad elements first, and then the good elements of customer service. I show how to bring the best customer experience to your clients to gain strong customer loyalty: How to Gain Customer Loyalty
Effective customer service
The longer a customer stays with you, the greater the profits become from that customer since the initial cost of customer acquisition gets averaged out over the entire customer retention period. Understanding the deeper, more hidden mathematical principles like this makes quite a difference in the long run.
Effective customer service that exceeds customer expectations will really cultivate customers that stick with you. Since these customers are people, building good relationships with them will develop their loyalty to you and your company. Continue building their trust as well. Customer confidence is a pre-requisite to customer loyalty.
The majority of customers who stop using specific companies do so because of poor customer service. Product problems and competitor offerings come in at a distant second and third place. Make customer service a top priority at your company and you’ll retain more customers longer. You’ll also feel good about yourself!
Put the strategies into your plan
Now you’re ready to take your entrepreneurial tendencies and start creating a winning plan. Having performed all of the due-diligence, you’ll now be an expert in your industry. An effective tactical strategy to start a business will be vital to the success of your start-up. Do this part correctly, and you’ll ensure success!