You have a brilliant idea for a product or service. People are going to LOVE IT! And then you’re going to get rich. This dream is real and you’re ready to take the risk. But then fear sets in. “Do I have what it takes?” “What if people don’t buy?” “Where do I start?”. The ugly documented truth is that 4 out of 5 new businesses fail. So what do you NEED to know in order to be the 1 that succeeds?
1. Prioritize Profit – First
The widely recognized and accepted accounting formula of Sales – Expenses = Profit is a formula that prioritizes profit last. Presenting a business model to investors that prioritizes profit first will be a business model that will get attention. The psychology behind a new formula of Sales – Profits = Expenses prioritizes profits first. It puts you as the business owner into the driver’s seat in controlling and curtailing your expenses.
If you have a business model in which you reinvest all profits back into the business, it’s very likely that you’ll never get funded. It is also unlikely you will pay yourself! This is the very reason you started your business! You need to show that you have a good business model that can sustain itself and produce a product or service that people will actually buy and one that will generate a profit for yourself and your investors.
2. Start with the vision & purpose of your business
Understanding the “WHY” of your business by creating vision and purpose statements will enable you to not get lost with generating revenue as your sole focus.. Having a successful business must begin with your “WHY”. What is your passion for starting this business? How is it going to benefit your clients and customers? Why is the world better because of the product or service you are offering?
Once you have your vision and purpose nailed down, then you can craft a mission statement. A mission statement should not be a one-and-done thing. It should be a living statement that everything in your business is focused on. It should be the driving force in your business.
Money is necessary in order to keep your business afloat and to allow that business to grow. However, the interactions you have with your customers will provide you with valuable insight as to how they, as consumers, feel about your product, and what problems your product or service solves for them. As you purposefully stick with your “WHY”, you will be able to build a business that has great employee retention, repeat customers, and products or services that make you proud to stand behind..
3. You don’t have to be an expert in everything.
You started your business because you know your business. But being a business owner also includes knowledge in accounting, marketing, human resources, payroll, website development, employee management, and the list goes on! While it’s helpful to have some knowledge and expertise in certain fields, it’s never necessary to be an expert in every single one.
The worst thing that entrepreneurs can do is to try to be experts in every single thing. It will just end up causing you headaches and frustration. Instead, stick with what you know how to do and then find “experts” in other areas of your business that you can hire to do those jobs for you.
You may think you don’t have the money to pay outside parties to do these jobs, but your time is valuable. Working in aspects of your business that are unfamiliar to you not only takes away your time but also may end in a sub-par result and inevitably, less profit for your business. What you should concentrate on is being an expert in running your business and providing value to customers through your product or service.
4. You don’t have to sell exclusively to earn your profits.
Realizing there are many ways to make money as an entrepreneur that doesn’t require you to sell a certain product or service exclusively opens up other possible revenue streams.
For example, you can charge for consulting services to help companies figure out how to solve their problems. You can also earn royalties from other people’s work that uses your idea. You can also launch an affiliate marketing campaign that allows you to earn money by selling someone else’s products.
Realizing these other possibilities creates new business model ideas where you are not limited to just the product or service sales model.
5. Turn your vision into achievable goals
As an entrepreneur, your job is to figure out what your company wants to accomplish in the future. How are you going to reach your goals? Is it to double your revenue this year? To reach one million subscribers? To create a new product that will change the way people do business?
Identifying the gaps between where you are today and where you want to be in 5 years are your goals. Write down specifically what has to be done to bridge those gaps. Also, write down what you are doing that is not in line with achieving your goals. What are you doing that may be taking you in the wrong direction, and away from your goals?
You will be amazed at the momentum you will create as you set achievable goals and track your progress towards them.
6. Know what your customers truly want
Want to have products or services that your customers truly want? While there are many things you can do to get a better grasp of what your customers truly want, it’s important that you do it right from the beginning. Get to know your customers and what their problems are. Once you have an idea about what those problems are, you can start to figure out how to solve them by creating products or services that they will want to buy.
Your customers are the people who buy your products or services. You can figure out what they want simply by asking. Your customers are also a very important part of your marketing strategy. You’ll need to identify the people who are most likely to buy your products or services and try to get in touch with them.
7. Know your business
Knowing the strengths and weaknesses/ opportunities and threats of your business model will help you be successful as an entrepreneur. Understanding that you have strengths that set you apart from other businesses in your industry will help you find your niche and maximize your revenue. Searching for opportunities that are congruent with your strengths is a perfect combination for continual growth!
Being aware of your weaknesses is key to finding other resources to shore these areas up. It is wise to either hire in-house employees with expertise in these areas or hire out the services from third parties. Knowing the threats to your business will help you to mitigate these and not let them derail your revenue or profits. Being aware and strategizing ahead of time, will help you to navigate the entrepreneurial business world.
Being a business owner is hard! It feels very lonely at times and there are key steps to ensure your success as an entrepreneur. Sum of All Numbers knows the business and we can help you with yours! If you would like a partner in your business journey with us, please start by booking an appointment with us today. This needs to say – Book an appointment with us today or Schedule a Consultation with us today -Take out booking.