Making the decision to branch out on your own is not one to be taken lightly. Entrepreneurship is truly a personal journey like nothing you’ve experienced before. My first venture into entrepreneurship began in 1993 when I made the decision to leave the corporate world and set up my own boutique apparel sourcing agency. Like so many other people, I was convinced that it would be an easy task as I was going into the same line of work that I had just left. I knew the business like the back of my hand….or so I thought.
It wasn’t until I actually got into the business that I realized just how much I didn’t know. It’s easy to believe that the business will run smoothly because we know our craft very well, but we didn’t take into account the various other roles that we would also be responsible for i.e. accounts, administration, operations, marketing, sales, etc. As a one person operation, we wear all of these hats.
If you are an individual who has given considerable thought, you’ve weighed the pros and cons and have decided to go for it, then here are a list of must-dos to start your journey on the right path.
1. Write a Business Plan.
Yes, I can hear you right now. “Why do I need a business plan when it’s just me? I know what I’m going to be doing.” You still should write a business plan. Writing a business plan creates clarity. It documents what it is about the business that makes you special (your USP), and gives you a clear picture of where you want to go and by when. Think of your business plan as a starting point, much like mapping out your destination before beginning a journey.
Keep in mind that your business plan is a living document. It’s not a one-time process. Continually update it as you gain new information and insights into your business. Having a written business plan from day one of operations gives you something to look back on to track your progress and your successes.
2. Establish a Sales & Marketing Strategy.
It is essential that you create a sales & marketing strategy that outlines how you will promote your business to bring in sales. Marketing a business today cost a lot less than it did fifteen years ago thanks to the internet. As a startup, you don’t have to implement expensive print campaigns, but you need to have some type of advertising and marketing campaign in place so that consumers know your business exists. I’ve witnessed many startups that are hurting for business and they wonder why they have no customers or clients when they’ve done no marketing what-so-ever. Hoping for business isn’t going to cut it. As the CNN journalist, Anderson Cooper once said, “Hope is not a plan of action.”
Start by determining your marketing objectives, set a monthly budget and then decide how you will allocate those funds to the various marketing activities. I’m aware that many startups don’t have a lot of money to pour into marketing, but that shouldn’t stop you. The internet makes it possible for you to get your product or service out in the market through free online business listings and classifieds, online article marketing (that only cost you the time to write the article and upload it) and free online press release submission.
3. Include financials as part of your business plan.
Including financials in your business plan is critical. You need to be able to map out by month where your projected income is coming from and what your expenditures are. At the onset, the initial figures will be estimates, but at least this will give you some idea of what you need to be earning each month to cover your expenses and make a profit.
In lecturing entrepreneurship students who write their own business plans, I am surprised at the numbers that include both projected income and expenses, yet only look at their sales and fail to see that their expenses far outweigh their sales and they are out of business before they even start.
Having a good idea of your potential expenditures in advance also gives you the chance to look at alternatives and downsize expenses before you actually spend the money. Startups need to conserve as much of their cash as possible while waiting for that first sale to take place. Remember the saying, Cash is King. You’ll be surprised how fast your hard earned savings get eaten up.
Preparation is one of the first steps in setting up a business, so prepare and write your business plan. There is a saying that goes, ‘if you fail to plan, then you plan to fail.’ Avoid that trap and set yourself up for success from the start.