Surviving Your First Year As An Entrepreneur
I was wondering what I would write that would help to create an impact for the rest of the year. Wouldn’t it be a great idea for a seasoned entrepreneur to give a few tips and tricks on surviving your first year as an entrepreneur?
After all, I failed to survive the first year, three to four times over and the lessons learned after the fourth time, is invaluable to my fifth venture. So, here I am, an incubator entrepreneur, offering some handy tips and tricks that hopefully you will refer and use throughout 2012.
Thanks God, you have me to tell you what to do in your first-year of being an entrepreneur. Do everything I say below or you’ll probably fail. I am dead serious!
Find a team. It will be difficult to work alone. Find a team to help you in areas of technology, business, sales, marketing and finance. All in all, a team of 5 with different competency is ideal. Usually, in a typical start-up, it will be two or three partners, multi-tasking.
Do not hire anyone. Start with the founding members. Ensure they have the competencies. The founding members should be working to move the venture forward in an organic way. Only hire people when you are absolutely desperate for more hands. That’s when you know your business is growing.
If you need extra hands in the beginning, you may want to consider internships. Interns are cost effective. Apart from interns, you could hire freelancers on project basis. Focus on growing sales. If you have sales, you’ll have the cashflow to hire more people. Hire based on needs and quality people who can fit in your organization and be easily trained; not quantity.
Finance your business. Finance your business by acquiring customers first, borrow against your receivables (factoring), self financing, borrowing by mortgage, borrow from friends and families. There are many entrepreneurs that started their businesses by acquiring the customer first. MAD Incubator, for instance, acquired 5 customers before it began operations. By the time, MAD Incubator opened its incubation doors to entrepreneurs, it is already sustainable.
Manage your cashflow. Spend wisely as and when needed. Stretch your money to last as long as possible until a VC invest in you. When stretching your money, prioritise your spending. Increasing sales should be your No. 1 priority. Monies need to be spent to increase sales. Do not indulge in luxury, thinking your big sales will come in a month’s time. All these are make beliefs. Do not do what your ego tells you. Be prudent. Spend where necessary, so long as it is to increase sales, improve productivity, marketing and product development.
Get a customer. Do whatever it takes to get ten paying customers. If you are a content site: get a sponsor or advertiser. If you are a product or a service, get a customer. Say “yes” to everything they want. Do whatever it takes to get them. If you can’t get a customer then that means you have a lousy product that does not meet any market expectations or you’re not passionate enough about it. Go back to the drawing board.
Stay healthy. Many entrepreneurs, as I have observed, tend to ignore their health. If you don’t stay healthy: physically, emotionally, mentally, spiritually, in your first year, its a guaranteed failure. Your business depends on you to being healthy and if you are not mentally strong in your first year, you’ll make mistakes…big mistakes along the way. I think I have failed enough to tell you what ought not to do.
Sales calls. Make sure you fix the number of sales calls your team will have to make in a day…a week…a month. I’m horrible at sales calls and if you are like me, make sure someone in your team is able to complement you.
Follow up. Someone in your team will have to follow-up. If you have a potential client, move it from the phone to the meeting, to dinner as quickly as possible. Pick up the bill. Build relationship with them. Close the deal.
Network. As a first-time entrepreneur, creating a strong business network is important. Network, network, network. A lot of entrepreneurs undermine the importance of networking. Networking opens up opportunities. Therefore, go to as many networking events as possible.
Form strategic partnerships. Strategic partnerships are important as they will help you to create business opportunities. Make sure partners work for you and to do that, you’ll have to offer a deal that motivates them to work for you, ensure good business support to help them sell your products and incentives to keep them constantly motivated.
Exceed expectations. My strategy, under promise and over deliver. ‘Wow’ the customers and make them feel important. Do favors for your clients. They will appreciate it. After ‘Wow’ing them, they will refer their friends to you.
Solicit references. Solicit customer references once a product is sold. Customer references can work wonders and act as a testimony of good performance about your company.
Make sure your employees understand your corporate mission and vision. You must ensure that your employees and your founding members are focused on the business and corporate mission and vision. It goes a long way if your employees believe in what they are doing for the company.
So, if you follow the above, you’ll have customers, cash flows, a network of contacts, good partners, great employees who will work hard for you, great team and most importantly, staying healthy.