There are no limits on who can become a great entrepreneur. You don’t necessarily need a college degree, a bunch of money in the bank or even business experience to start something that could become the next major success. However, you do need a strong plan and the drive to see it through.
If you’re on Entrepreneur, odds are you already have the drive, but you might not know how to start building your empire.
That’s why we are here.
Check out this step-by-step guide to help turn your big idea into a successful business.
1.) Find An Idea:
So what do you do if you don’t have an idea? Many people want to have an idea, to become an entrepreneur, with visions of being their own boss, and making lots of money (for them or others). But how do you find a good idea?
The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself. – Paul Graham, Y Combinator
The best way to find a good idea is to try and solve a specific problem or pain you have. Look at what is out there, see if there are others with the same problem, and see if you can actually develop and build a solution. If you have a problem, and that problem is shared by others, you may be on to something. If no one else shares your problem, or it is not a big enough problem, you may find that there will not be the market for your solution. You need to make sure to ask lots of different people, not just your friends and family (who invariable say, “That’s a good idea”, in order to not hurt your feelings). It is better to have a small group of users who really want your solution, than a large group of users who are only mildly interested.
Paul Graham, of Y Combinator, summarises this point beautifully:
When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they’ll use it even when it’s a crappy version one made by a two-person startup they’ve never heard of? If you can’t answer that, the idea is probably bad.
Other points to consider when finding startup ideas:
What do you need? Ideas come from where there is need, whether in a current job or in your daily life. Understand your peers and see if they have the same need.
Think Big. Is your idea scalable? Have a target, which may be quite narrow to start, but be able to broaden your scope as your idea develops.
Be the kind of person who has great ideas. Be good in your field, so you can find and exploit the gaps. Live and breathe in the field you want to create a startup, and you’ll begin to notice the opportunities. Live in the future, and then build what’s missing.
Be a techie. Now this doesn’t apply to everyone, but you’ll stand a much better chance of getting a tech startup off the ground if you know what you’re talking about. Also being about to create revisions on your own means you will get to a MVP (Minimum Viable Product) much quicker. Hack as often as you can.
Open your eyes. Notice what’s there, and find what’s missing. It may be obvious, or you may need to look hard, but it will be there. Be curious, ask questions, observe. If it bothers you, look into it. You might be on to something.
Give yourself time. Rome wasn’t built in a day, and good ideas need time to bake. Just be ready.
Learn by doing. If you want to be an entrepreneur, get out there and do something. Get involved in cool projects, programming, interdisciplinary events. Broaden your mind and meet people from all backgrounds. Go to work in a seemingly unrelated field.
Don’t be afraid of competition. It means you’re on to something. Unless your competition has the market cornered completely with a very satisfied customer base, there is always room for one more. Look at what they are doing, and make it better.
Follow these points, and you stand a good chance of noticing the obvious.
Too many people don’t bother to write a business plan because they think it’s too hard or unnecessary unless you’re looking for funding. That’s a shame. These myths keep a lot of people from the benefits of planning.
If you’re still skeptical, here are 10 benefits to business planning you shouldn’t be overlooking:
- You’ll stay on strategy. It’s hard to stick to strategy through the daily routine and interruptions. Use a business plan to summarize the main points of your strategy and as a reminder of what it both includes and rules out.
- Business objectives will be clear. Use your plan to define and manage specific measurable objectives like web visitors, sales, margins or new product launches. Define success in objective terms.
- Your educated guesses will be better. Use your plan to refine your educated guesses about things like potential market, sales, costs of sales, sales drivers, lead processing and business processes.
- Priorities will make more sense. Aside from the strategy, there are also priorities for other factors of your business like growth, management and financial health. Use your plan to set a foundation for these, then to revise as the business evolves.
- You’ll understand interdependencies. Use a plan to keep track of what needs to happen and in what order. For example, if you have to time a product release to match a testing schedule or marketing to match a release, your business plan can be invaluable in keeping you organized and on track.
- Milestones will keep you on track. Use a business plan to keep track of dates and deadlines in one place. This is valuable even for the one-person business and vital for teams.
- You’ll be better at delegating. The business plan is an ideal place to clarify who is responsible for what. Every important task should have one person in charge. Your plan keeps track.
- Managing team members and tracking results will be easy. So many people acknowledge the need for regular team member reviews and just as many admit they hate the reviews. The plan is a great format for getting things in writing and following up on the difference between expectations and results with course corrections.
- You can better plan and manage cash flow. No business can afford to mismanage cash. And simple profits are rarely the same as cash. A cash flow plan is a great way to tie together educated guesses on sales, costs, expenses, assets you need to buy and debts you have to pay.
- Course corrections will keep your business from flopping. Having a business plan gives you a way to be proactive — not reactive — about business. Don’t wait for things to happen. Plan them. Follow up by tracking the results and making course corrections. It’s a myth that a business plan is supposed to predict the future. Instead, it sets expectations and establishes assumptions so you can manage the future with course corrections.
You don’t need a big formal business plan to reap these benefits. Instead, think of your business plan as a collection of lists, bullet points and tables. Think of it as something that lives on the computer, not on paper. It’s just big enough to do its job.
Do you want to start your own business? Are you planning to venture alone or with co-founder/s? When alone, you might be able to proceed faster. However, your mission in business should be not only to stride faster but to reach farther. To reach farther in business and to fulfill the mission, one needs continuous support—technical, financial, physical and emotional. All of this is possible with a co-founder.
Having the right co-founders in business is fundamental to the success of entrepreneurs, as the sustainability and growth of any venture is largely dependent on the collective skills, knowledge, capital, networks and value the founding team brings on board.
Multiple brains, more ideas
A co-founder will have a different way of viewing a situation other than your own, helping bring to light things that you might sometimes overlook. With diverse areas of expertise, you and your co-founder together are better equipped to come up with effective solutions for varied problems. Their knowledge, skill sets, experience and willpower can also result in more effective problem-solving and decision-making, which can prove to be a big asset for your venture.
A co-founder will have a different way of viewing a situation other than your own, helping bring to light things that you might sometimes overlook.
More hands at work, forever
A co-founder means you have more human resources in the company, which can lead to synergistic effects in the overall performance of your company. The majority of planning and operational work gets done more efficiently and effectively when you have a co-founder pursuing the same venture. And co-founders are usually there with your venture forever, making them a valuable resource to your business.
When you launch a new product for your small business, you open up new possibilities that can help your company not only to survive, but grow. While you may worry about the funds you have to commit to a product launch, you can measure the risk of your capital against the potential rewards. A level-headed evaluation of the advantages of a new product will help you justify your commitment of time and money to the project.
Your new product offers you an opportunity to build trust with your customers. According to the website Online Business Success, your efforts to convince customers through articles, press releases and white papers can overcome skepticism and win product acceptance. You not only gain acceptance of the product, you gain trust and confidence from your customers.
New Revenue Streams
Your new product can provide revenue streams you haven’t explored before. A revenue stream is a route for money into your company. For example, if you currently make your money from over-the-counter sales, a new revenue stream could be Internet orders. When you launch a new product, try new marketing outlets such as advertising on websites, distributing mobile phone ads and notices on social networking sites. Your new product may attract customers through new avenues, thus broadening your sources of income.
Capturing Market Share
A new product can help you compete better in the marketplace. Even if a similar product already exists in the market, you can take advantage of the excitement and newness of your product to get people’s attention. This can win you first-time buyers who become loyal customers, thus increasing your share of the market.
Employee Motivation and Retention
Newness makes the job interesting. A new product launch encompasses new goals, new ways of doing things and new lines of cooperation and communication among employees. When you convey to employees that yours is a growing, dynamic company that launches new products, you are more likely to retain employees who want to grow with you.
Every business costs money to start. If you have adequate cash or assets that can be pledged against a loan, you may, with care, manage to bootstrap your business. You should nevertheless consider taking on an investor to help fund your business startup. Investors can provide valuable contacts, useful advice and motivation for you to work harder at growing your business, in addition to providing the funding.
You will need an investor if you don’t have enough money to start your business or you want to retain your assets to use to live on or for emergency funding in your business. Although venture capital firms are the most visible sources of capital investment, angel groups (small private investors), local business owners, and your friends and family are also excellent sources of investment and usually are more willing to assist you with contacts and advice.
Contacts And Advice
An active group of advisers can mean the difference between success and failure. Any investor has the incentive to help you grow your business because that is how he will make back his investment plus profit. Often small private investors will actually provide professional services at no cost to you, particularly if they are accountants or attorneys. Others can arrange introductions to strategic partners and customers that may bring in important early revenues.
Investors will provide strong motivation and moral support as you struggle to launch and build your business. Again, it is to their advantage to help you build a successful business, and they will be proactive in monitoring your progress and applying pressure to watch your spending and optimize revenue opportunities.
Any company that can attract investors achieves the image of success. Your customers and other potential investors always feel more secure doing business with a company that has already been vetted by an investor.
Team building has a bad rap. In most companies when a supervisor says, “We’re going to do some team building!” employees start re-running old episodes of The Office. It’s one thing to see it on TV, but getting a real-life taste of your manager mimicking Steve Carell’s insanely-awkward-try-hard leadership style just isn’t as funny.
Despite its reputation for being, well, lame, team building is the most important investment you can make for your people. It builds trust, mitigates conflict, encourages communication, and increases collaboration. Effective team building means more engaged employees, which is good for company culture and boosting the bottom line. It can also be adventurous and enjoyable if you do it with a little pizzazz.
At O2E Brands, we’ve earned a spot as one of the country’s best places to work and team building is a big part of that. Here are the ground rules that apply when it comes to planning activities for your people.
Don’t force the corporate stuff
The most successful, memorable team-building events are ones that don’t feel like a day at the office. Activities that overtly aim to draw in leadership lessons or practical takeaways are less powerful. Spending time together, sharing an experience or working towards a common goal allows bonding to happen more organically and far more effectively.
One example that comes to mind: the night we took the team to an Eric Church country music concert because our own COO (also named Erik Church – no relation) had always wanted to go. There was no explicit lesson about leadership or communication as we spent the night drinking beer and practicing our two-step. But the experience brought everyone closer together and in the end we learned that there’s no better way to understand someone than to walk a mile in his cowboy boots.
Startup companies and small businesses that want to issue shares of stock have to incorporate as a C corporation, or C corp. Selling stocks lets companies quickly raise a potentially unlimited amount of funds to invest in new projects or company operations. The ability to issue a variety of stock is one of the main features of the C corp, which can offer many different ways to draw in new investors. Small businesses or startups that become C corps will encounter some drawbacks, though, including potential double taxation and loss of independence
Advantages of Stocks
By issuing stock, business owners can raise large sums of capital without being responsible for a monthly repayment, as they would be with a loan. Shareholders expect they will be paid back when the profits from the company result in dividend payments. Also, if the share price of the stock rises, shareholders can profit by selling the shares to another investor at a price that is higher than what they paid. Growing companies that issue stock can later use that stock for mergers or to acquire other companies.
Selling stock can attract more investors because it offers oversight and part ownership of the company’s operation, giving investors more security that they can recoup their investment. A limited liability company can’t issue stock, and an S corp can offer only one class of stock, which means that the rights and responsibilities of each share is the same. However, a C corp can issue different classes of stock, offering many options for raising revenue and attracting investors.
Classes of Stock
A C corp is the only kind of private corporation that can issue different shares of stock that give holders different rights and responsibility. The two main classes of stock are common stock, which gives shareholders a stake in the ownership of the company, and preferred stock, which gives shareholders a stake in the assets and potentially a dividend payment. Venture capitalists usually restrict investments to C corps that can issue preferred stock, because these shares give investors preference over common shareholders if the company is liquidated.
Articles of Incorporation
C corps control the shares they issue through the articles of incorporation filed with the state. Startup companies often issue 20 million shares of common stock and 5 million shares of preferred stock, according to the QuickMBA website, but often the corporation will hold these shares until it needs to raise revenue. Some closely held companies that don’t need outside investors can issue a small amount of common stock to consolidate control and avoid some state taxes. A C corp can amend its articles of incorporation to issue additional shares.
Drawbacks of Stocks
Shareholders can have decision-making authority through the board of directors, which can cost a business owner a level of control over her company. Also, small C corps can have more difficulty securing a loan from a bank than can an LLC, sole proprietorship or partnership, because the owners of these last entities can put up personal collateral like a house or similar asset.
“Chase the vision, not the money; the money will end up following you.” –Tony Hsieh, Zappos CEO
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