In recent years there has been a dramatic increase in entrepreneurship in the United States as a shortage of jobs has forced more people into working for themselves, and barriers to entry for new businesses have decreased.
If you’re keen to follow this trend and launch your first start-up in 2017, you need to be aware that it’s not as simple as coming up with a fun idea, getting a small loan, and enjoying overnight success. While there are plenty of young entrepreneurs who have managed to make millions, or even billions of dollars from their first start-ups over the years, this is certainly the exception not the rule.
To help you really make a go of your venture, it is vital that you learn everything you can about your industry and about business basics before you get started. Read on for some of the key areas of business you should study before you launch a business.
When you look at the reasons why so many new businesses fail in their first five years, a main cause is often a lack of cashflow and/or other financial issues. As a result, if you really want to make your first venture a success, it’s vital for you to really get your head wrapped around the fundamentals of finance.
While you don’t have to know as much as an accountant, it will help a lot if you at least learn the basics so that you can:
- Read balance sheets, profit and loss statements, and the like
- Be able to put together sales and profit projections
- Understand funding options and tax implications
Keep in mind that if you become comfortable with all the numbers involved in running your business, you will find it a whole lot easier to make decisions (both small and large ones) about the future of your organization.
You can use the knowledge you develop about finances to find new ways to:
- Increase efficiencies
- Cut costs
- Raise revenues
- Afford new products, premises, staff, or marketing campaigns
- And more
Understanding cashflow will also help you to attract investors and to make sure that you are never short on money when you need to pay staff members or creditors.
In addition, if you hire an accountant to help you with your business accounts, your knowledge of finance will help you to properly interpret the data they provide you with, and ensure that they don’t end up “cooking the books” or otherwise doing the wrong thing.
If you don’t know the first thing about reading or understanding financial information, sign up for a course or apply for a business scholarship today. There are also plenty of helpful books and online training modules you can enrol in, or you’ll find that many accountancy programs (such as Xero and QuickBooks) have help available too. An accountant can also go over the basics with you.
Another vital component of start-up success is having the right branding, not just for your venture, but also for yourself. Branding is important because it not only helps to attract customers to your business so that you can make those all-important sales, but it also helps to woo top job candidates when you’re hiring your team, and helps you to impress investors and garner interest from the media.
In addition, effective branding will assist you and your business to come across as helpful, credible, reliable and trustworthy — something that many new ventures and first-time, untested entrepreneurs struggle with.
To ensure your business has good branding and that it is visible, there are numerous steps to follow. For starters, you need to be clear about what it is that you and your venture will really offer to your clients, and how this differs from other organizations in your industry.
Your brand must convey this unique selling proposition (USP), and be instantly recognizable, if you want it to be effective. It pays to hire a designer who specializes in the creation of logos and other collateral to help you ensure you get the right look and feel.
Lastly, the sales process is, of course, another key part of building a thriving new business. While you might decide to outsource the task of interacting with current and potential customers to your team or a contractor, it is still important for you to have skills in this area too.
On a daily basis you will need to promote yourself and your business. For example, this occurs when you pitch to top job candidates to join your team, lure investors, generate media interest, or negotiate with suppliers. No matter the industry your venture is in, you will need to be able to foster relationships with people, understand their needs, and persuade and motivate them in at least some regards.
One of the best ways to start improving your sales technique is to look for ways to help people find solutions to their problems. If you spend the time and energy to listen to people and learn what motivates them or what pain points they have, you will be more likely to come up with options that make them say yes to your proposals straight away.