Are you thinking of starting a business? How do you know when you are ready to start a business?
I do not believe everyone should start a business. Now we have this culture of people wanting to be entrepreneurs without knowing what it takes.
Entrepreneurs are now the new rockstars. The kids now, before they wanted to be a rockstar now they want to be an entrepreneur because of Instagram, because of social media.
They think that it’s easy for anyone could get started. It is simply not the case. I believe these are the top seven things not to do when starting a business.
Top 7 Don’t of Starting a New Business: New Entrepreneurs Beware
#1 Don’t Start A Business When You Are Desperate
You see it’s very easy to deceive ourselves and say, “We’re going to start this business and we’re going to make a profit in three months in six months, in a year. That’s simply not the case.
Most businesses don’t make money that quickly. Yes, in some cases you do have sort of online businesses where it’s easy to turn a profit, but I’m talking about most businesses that don’t make money in the first year.
They don’t make any money in the first few years. And it requires a substantial amount of investment in terms of time, in terms of money, to just get it going.
It is not easy to get a business going. So don’t start a business when you’ve got no money and don’t start a business when you’re living paycheck to paycheck.
- How are you going to meet payroll?
- How are you going to do marketing?
- How are you going to get the business going?
You have to cover your living expenses at the same time, cover all the overhead in the business.
How are going to come up with that money? Answer the question. So don’t start a business when you’re desperate.
#2 Don’t Start A Business If You Don’t Know How To Close
I’m talking about how to sell, how to influence, how to make that sale. In business, nothing happens until a sale is made.
A lot of people say, “Oh, I’ve got an idea.” So What?
An idea doesn’t mean business. Unless you know how to turn that idea into a product or service that people want to buy.
And you know how to get your product or service into people’s hands. And you know how to communicate how to close in exchange for money, it doesn’t mean anything.
An idea is a dime a dozen, but the ability to close the ability to sit down with someone face to face on the phone, on camera, in video, on social media, how do you convince and persuade someone to give you money in exchange for your product or service? That’s the key.
If you know nothing about selling, you’re not qualified at the moment to start a business.
#3 Don’t Start A Business If You Don’t Understand The Industry
I am shocked by how many entrepreneurs when they have an idea and I ask them just a few questions.
- What do you know about the industry?
- Who are your ideal customers?
- How are you going to reach them?
- What are their frustrations?
- What are their goals?
- What qualifies you to be in this space?
- Do you have any credibility?
- Do you understand their emotional needs?
They know nothing about the industry. So why are you thinking of getting into this industry?
This is not how it works. You have to have something truly unique that you bring to the marketplace that is different from everybody else.
You could add more value, you can solve a problem that’s not being solved at the moment.
And that’s what gives you the right to start a business in that particular industry. Your success in business is largely determined by how well you understand your industry.
#4 Don’t Stort A Business Because You Are Sick Of Your Job Or Hote Your Boss
If you are sick and tired of your job, get a different job. It doesn’t mean you should start a business just because you don’t like your supervisor.
You don’t like your manager. You don’t like your boss. It doesn’t mean you should become your own boss.
It doesn’t make you ready. It doesn’t mean you are equipped to be your own boss to be in business for yourself.
It is a different game. Now, I’m not saying don’t do it.
I’m saying, do you know what it takes? Don’t start a business out of ego, just, “Oh, you know what? I don’t feel that I’m appreciated, I don’t like what I do. So I’m going to go start a business.”
- Do you have the business acumen?
- Do you have the right knowledge?
- Do you have the right skills to make a business work?
No one talks about that. Let me quit my job and let me figure this out.
- How are you going to pay your bills?
- How are you going to support your family?
- How are you even going to support yourself?
- How are you going to support your business?
All the expenses, all the capital investment. Where does that come from?
You may think that I will get money from other people and raise capital.
- Sure, do you know how to raise capital?
- Do you know how to do a pitch deck?
- Do you know how to talk to investors?
- Why would an intelligent investor even invest in you?
These are tough questions. You better have good answers for that. Because out there in the business world, it is cruel.
And every single day, someone is trying to put you out of business every single day someone’s trying to kick your ass.
Someone’s trying to take customers away from you. Are you ready for that?
#5 Don’t Start A Business Simply Because Your Family And Friends Tell You It is A Good Idea
Remember your family and friends they’re not your customers. They’re your family and friends.
What you need is you need to get direct feedback from the marketplace, from strangers, from people who don’t know you, people who don’t even want to support you.
Are they willing to vote with their wallet and say, “Hey, I want to buy your product, I want to buy your service?”
Not because your family and friends, your mom, your wife, your husband, your cousin, your sister say, “It’s a good idea.”
#6 Don’t Start A Business Thinking How Much Money You Can Make
A wise entrepreneur, an experienced entrepreneur doesn’t think about how much money I could make. No.
They think about the burn rate. They think about how much money they could lose before they go out of business, and how much time they have.
They have to make that work. How much time do they have before they close the door for good?
Now you don’t think about that, do you? You think about, “I’m going to make all this money.”
Have you ever thought about how much money you will lose?
- What if it doesn’t work?
- What if it takes you way longer than you think?
- What if it costs you twice as much as you think?
- How are you going to handle that?
These are very, very good questions you need to have answers for.
“Oh yeah, it’s going to work in one month.” No, It’s not going to work in one month.
It’s not going to work in two months, it takes time. To be a good entrepreneur you have to be a realist.
You have to look at the facts. You have to look at the data. You have to look at the numbers.
By the way, do you know how to read financial statements?
- Do you know how to negotiate?
- Do you know how to build a team?
- Do you know how to raise capital?
- Do you know how to market?
- Do you know how to sell?
- Do you know how to handle conflicts?
- Do you understand the strategy?
- Do you understand the business model?
#7 Don’t start a business unless you are willing to commit 10 to 20 years to the business
What, what are you talking about? I thought I was going to start a business and I’m going to exit in three to five years.
Now that does happen to some people, not most people.
But going into the business, you have to think about long-term.
Think about 5,10,15,20 years. If you exit in five years and you walk away with a lot of money, good for you.
But what if you don’t? That 10-year period of time, that 15-year period of time knowing the first few years, probably a good chunk of that first 10 years, you’re not going to make much.
It’s going to be tough. You’re going to face a lot of obstacles. It’s going to be very, very stressful. It comes with a game and that’s part of being an entrepreneur.
Are you ready for that?
I have come across many such problems in the business. I have no one to talk to.
- How am I going to pay the bills?
- How I’m going to solve this problem?
- How am I going to meet payroll?
- How am I going to pay rent?
No one could help me. No one’s coming to rescue me in any way, shape or form.
I had to figure it out. And I stuck through that period. And I kept on going and I didn’t give up.
So those are the seven things of what not to do when starting a business.
If you like this please share it with your friends and other people who are planning to start their business. To know more and get help on growing your business get in touch with me at sk@moneyexcel.com.
