Being your own boss can be one of the most exhilarating experiences imaginable. Whether it’s opening a new restaurant, building a dedicated fanbase of readers, or trying to invent an app that will change the world, starting your own business is hard work that can be immensely rewarding in so many ways.
However, great ideas are a dime a dozen and most people who launch their own company or brand will probably not succeed in realizing their dreams. In fact, according to Forbes, about 90 percent of startups fail. That’s not an excuse for not trying. But it is a reason for taking steps that will help you avoid many common pitfalls that entrepreneurs face.
By the way, I’ve seen first-hand what it takes to build a business from scrap. Indeed, virtually everyone in my immediate family works for themselves. For example, my younger sister started an interior design business and my younger brother launched a music camp for kids. As you can see from this bucket beats drumming lesson, you don’t necessarily need to invest a fortune to start your own business. You just need talent, passion and a good game plan.
Thankfully, my family members have done reasonably well as entrepreneurs. Alas, there are no Elon Musks or Jeff Bezos in our clan, but at least everyone is doing all right. However, I have also seen entrepreneurs with great ideas and real talent both flop and barely scrape by. With that in mind, here are what lessons I suggest you heed if you are thinking about starting your own business. These are five of the most important things I believe you need to think about.
Make sure your product has a market
Do you want to start an upscale organic health food store? Then make sure your locality has the demographic makeup to afford your premium priced products. Sure, it would be great if less affluent customers in poor neighborhoods ditched cheap processed foods in favor of healthy choices, but chances are that established habits are hard to break.
Therefore, you have to identify your likely customer base and learn everything you can about them.
- What are their budgets?
- What products or services will make their lives easier?
- What price points will make your products and services irresistible?
Nearly half of all startups fail because the founders fail to identify a clear and distinct market. To beat the odds, make it your number-one job to understand who your customers are and how your products or services will solve their problems.
You have to stay on top of everything
Is the economy hitting a soft spot? Did a competitor just open shop nearby? Is a new technology or app changing your industry? It can be daunting, but entrepreneurs need to work on the big picture and pay attention to small details too. Being constantly in touch and responsive to your customers is one of the best ways to ensure you stay up-to-date and can adapt quickly. This wisdom can be summed up in a single phrase, “Markets are conversations.”
Versatility and resilience are key
Today, the e-commerce landscape is shifting faster than ever. That makes it easier to start a company than ever before, but it also means that trends can shift on a dime.
One of my favorite examples of entrepreneurial endurance is the guitar maker Martin and Co. They’ve been around for more than 180 years. So, they’ve survived numerous recessions, multiple wars, technological upheavals and changing musical fashions. Here are some reasons they managed to adapt so well.
- During the Great Depression, they introduced low-cost “student” models (which are still popular today).
- They adopted high-tech production techniques, but in a way that stayed true to their traditional standards regarding quality.
- They maintained a flexible mindset, which allowed them to respond adroitly to the ups and downs that are inevitable in any business.
My father started his own consulting firm in 1982. So, I’ve seen up-close what it takes to survive tough times. Many startups do fine while the economy is healthy and consumers are flush with cash.
The real test, however, comes when things get tough. That’s when you have to make sure your team works together harmoniously so that you can adjust compensation plans, product lines and marketing strategies in a flash as needed.
Work hard, stay positive and make sacrifices for a greater good
Being your own boss has its perks, but it usually entails irregular hours. Do you have the self-discipline and can-do attitude to handle long hours and frequent setbacks?
Starting your own business requires risk-tolerance and total commitment. In addition, business experts have identified a positive attitude as critical to success. Irrational optimism may seem like a dubious quality to recommend. However, there’s little doubt that it’s important to recruit people who believe in your mission and goals. Furthermore, people who “live and breathe negativity and pessimism” rarely make good entrepreneurs or team members in a startup.
Do it because you love it and harness your passion
The motivational expert Simon Sinek says, “Working hard for something we don’t care about is called stress; working hard for something we love is called passion.” That quote captures the best reason of all to start your own business — it’s the opportunity to do something you really love, believe in and want to share with the world.
Perhaps you want to start a yoga studio, create an app that helps rescue animals find good homes or build a business around getting kids to eat healthy snacks. In today’s world, it’s never been easier or more rewarding to start your own business.
Doing it because you love it is arguably the most important reason to start your own business. When you discover your deepest passion, it can be a tremendous source of energy, which allows you to overcome obstacles and achieve ambitious goals.
Don’t rely entirely on passion, however. Make sure you pay attention to the other lessons in this article. I wish you luck with your entrepreneurial ventures and would love to hear about them in the comments section.
— Scott O’Reilly