How to Become a Successful Business Owner in 6 Steps
Becoming a business owner can be a liberating experience, in more ways than one. Succeed and secure a high degree of personal and financial freedom; fail and watch the banks liberate you of all your hard-earned assets.
Planning and preparation is the key to entrepreneurial success. Here are the six steps to starting a successful business:
1. Acquire Relevant Knowledge and Skills
Entrepreneurship is a high risk, high reward field but the risk can be significantly minimized through education and experience. An MBA degree helps tremendously in this endeavor but informal education through a veteran mentor is equally valuable.
While education equips you with the necessary information to build small and medium-sized enterprises (SME), some skills can only be acquired through experience. Entrepreneurial experience can be earned by climbing another company’s corporate ladder. After all, you can learn a lot about excellent leadership by being a good follower.
If your dislike for a nine-to-five job is what’s pushing you to become a business owner, then there is another way to gain experience, with the downside that it’s somewhat of an expensive option.
How do you gain experience as an entrepreneur without actually building a business from the ground up? You purchase a franchise, that’s how.
With the tried and tested systems of a franchise in place, all you need to focus on is finding an ideal location, and learning as much as possible from the experience.
2. Build Connections
Now that ‘what you know’ is out of the way, the next step is to build upon ‘who you know.’
Business connections are vital to startups due to the fact that they don’t have a steady foothold in the market yet. Connections with other entrepreneurs are stabilizing forces that can ensure the survival of a budding SME.
Bill Gates and Steve Jobs may have had a tumultuous relationship but their careers would have been vastly different if not for their connection. In fact, Gates and Jobs worked together on the first Macintosh, a working relationship that would eventually result into the development of the first version of Windows.
It’s not just business owners that you should form bonds with; building professional relationships with other employees can allow you to develop your management skills even before your company is founded.
3. Formulate Your Business Idea
Once you’re educated, experienced, and well-connected, it’s time to find your calling as a business owner. It’s easy to get blinded by lucrative opportunities and ground-breaking ideas, but it’s even more important to put your preparations into good use.
Make sure that your skillset and passion complements the idea that you come up with. If you’re having trouble finding a common ground between ‘what you’re good at’ and ‘what’s profitable,’ then you can always ask your business connections for advice.
Another factor to consider when creating your business plan, is the community that you plan to build it in. The needs of society is just as important as the inner workings of your company. After all, your company will never take off without sufficient public support.
4. Analyze Your Market
A business plan isn’t complete until your market’s value, volume, and saturation has been made clear.
Any business owner worth their salt will do their due diligence regardless of the circumstances. Market analysis may not be the most exciting aspect of entrepreneurship, but it is vital to the success of a business.
Intimate knowledge of a product/service’s value and the demand that drives it, is necessary for the sustainable development of a business. Such knowledge is also helpful for companies undergoing incorporation, as these are the things that most investors want to know.
Competition is another variable of market analysis that must be given high priority. While it is true that competition drives innovation, severe overcrowding can deprive budding SMEs of their opportunity to develop.
5. Raise Capital
After all preparations are done, all that’s left is to raise the seed capital needed to bring your business idea into fruition. Convincing other people into investing their hard-earned money into a startup is no easy feat, but luckily, there are several ways you can go about it.
By this point, you should have a growing network of business connections that you can tap into. In fact, it’s not strange to get a couple of angel investors if your network is large enough. This is no reason to slack off, however, and it is your responsibility as a business owner to perfect your business pitch.
The rapid advancement of technology has opened up an alternative to the conventional fundraising methods. Crowdfunding is now a reasonably solid option when it comes to raising funds. And since your target market is essentially funding your company, this method has the positive side-effect of substantiating your business’ market share.
If all else fails, bootstrapping is always an option. Providing the seed money yourself may not be the most appealing option, but it can allow your business to develop and open up funding opportunities in the future.
6. Increase Company Scalability
This final step is what separates the successful business owners from those who never realize the full potential of their company. Growing your business sounds like a simple concept on paper but it is an endeavor that has ended the careers of countless professionals.
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