Editor’s note: This article was first published in June 2017; its references to Google AdWords and to checking for a free Twitter handle reflect that time, as AdWords is now Google Ads and Twitter is now X.
Most business ideas fail. That’s a fact you have to bear in mind. Once we know that, if our dream is to have our own business, we can’t let the fear of failure hold us back. Failure in business is one possible outcome, and success is another. Enjoying the process and the learning once we decide to start our own business, on the other hand, is a choice.
If you have a business idea or you’re keen to start your own business, here is a series of tips for before you start and during the entrepreneurial journey that will help you tip the statistics in your favour.
How to succeed in business: follow these tips
1. Research your business idea
What would your business idea look like in the real world? Which other entrepreneurs are already competing in that sector or market? What sets you apart from them? Why would people buy your product instead of someone else’s? What strategy are you going to use to make your product known and get sales?
Remember that a profitable business consists of having a product, a market, and the skill or strategy to get that product into the market. You should be able to answer all these questions before you even consider putting a single cent into your business.
It’s true that there’s nothing wrong with bringing an unfinished product or service to market, because we can always improve it. But it’s also true that if we can avoid having to make changes later on that render our initial investment useless, so much the better for us.
Many business ideas sound great in our heads, because of our eagerness to start a business and our runaway passion, but the truth is that many of these ideas are only viable in our heads.
See also: Validate your business idea in just 5 minutes
2. Is your idea going to meet a demand or create one?
If you create a highly innovative product that solves problems people don’t even know they have, congratulations on being a visionary entrepreneur, but the failure rate is very high for this kind of idea. In other words, creating an amazing product and then going out to look for potential customers to sell it to is a bad strategy to start with.
Tim Ferriss is clear on this point. It’s much more practical to look for a market with an existing need, where people are already buying a specific product, and to create a product or service that meets that demand. You can imitate, copy or improve the product they’re already buying. The aim is to create distinctive value for customers. That way you make sure there’s already an open market, and it’s a matter of knowing how to get your product into it. Your chances of success go up this way.
See also: 35 profitable business ideas you can start
3. Map out a route, not a business plan
A business plan is fine for getting financing, but it won’t be any use to you in the real world of business, because that plan is out of date by the second day your business is open.
You have to map out a route. That is: I want to get from point A to point B, and I’ll make as many plans as it takes, however many fail, to get to point B. You have to keep moving and keep changing. Remember that if your business turns out to be very profitable, it won’t be long before a new competitor appears who copies, adapts and even improves on what you have. So forget business plans.
4. The business plan you should use to get started
Before you throw yourself into the business heart and soul, and above all before you quit your job to start your business, put your idea to the test. Find one customer, then another, and then five more. If your product is sold online, create a test page and launch a small advertising campaign on Google AdWords or Facebook Ads. Let’s see how easily your product sells. If visits quickly convert into sales, that’s a sign the business could work.
You can even test-sell a product you don’t have, simply to see whether users would buy it. It’s a way of making sure we aren’t going in blind.
5. Choosing the business name
Your business’s name is going to be a customer’s first contact with your business, so something this simple has become a headache for some entrepreneurs. Do the relevant research to make sure there’s a URL available for the name you’re going to use and that there’s no Twitter account with that name, and start the necessary steps (buy the domain, reserve the Twitter account, and so on).
See also: Some simple tips for choosing a name for our business
6. Start with passion, and don’t let it go
The advice to follow your passion and start a business you’re passionate about often has its days numbered. That passion is going to disappear once you’re caught up in the daily grind of entrepreneurial tasks that have nothing to do with what you’re passionate about. When that moment comes, try to remember why you started that business. And when that moment comes, you’d better have started it for more than just making money, because as Richard Branson used to say, a business that only makes money is a bad business.
Always keep a clear mission in mind about the problems your product solves, the people you help and the work you do as a business owner. Always keep in mind the reason you contribute something to society.
See also: 5 tips for turning your passion into a business
7. Money rules
This may sound like it contradicts something we said in the previous point. If you have a business that helps people but doesn’t generate money, sooner or later you’ll be forced to stop helping people.
In business you can’t just be an idealist; you have to bear in mind that we’re here to make money. If we don’t make money with our company, we’re failing in our mission. That’s why you need a business model that generates profits for you. And this model has to be coherent and real. Which brings us to the next point.
8. The customer is everything. Don’t forget it
You’re not going to sell what you want to sell, but what the customer is going to want to buy. Your mission in the business should be to forget for a moment about “sell, sell, sell” and “make money, make money”…
See also: 4 stories of entrepreneurs who succeeded after failing
Forget about that for a moment and focus solely on satisfying your customer as fully as possible: a good product, good service, good after-sales service, good customer support, and so on.
If you make sure you’re helping your customers and providing a valid, real service as well as excellent added value, the money will come by itself. In fact, the money you make with your business idea is simply an indicator of how well you’re doing as a business owner.
Money shouldn’t be a goal or an objective of your business, but the result of a job well done.
See also: If you have no money, these entrepreneurs explain how they made their businesses work
9. Hire smart and fire fast
In the early days of the business, we can probably do without hiring some of the people we’d planned to hire. When we talk about hiring smart, we mean hiring, as far as possible, the best in their field, even if we sometimes have to pay a little more. Buying cheap ends up costing more with products, so imagine what it’s like in a company.
And fire fast. Have no mercy when it comes to firing someone incompetent, because they can do a lot of damage to our company in a short space of time. Never hesitate to let someone go if they’ve already shown they’re not up to what’s asked of them.
10. Always keep expectations high, but plan for the worst-case scenario
It’s very common to think of all the reasons why we’ll keep most of our costs under control and sell a lot, but reality shows that costs end up being higher than expected and profits end up lower than we’d hoped at the start.
As an entrepreneur you should have the mindset of someone out to conquer the world, but you should imagine the worst foreseeable scenario and prepare for it, because quite simply, it could happen. Try to minimise the impact in case your business fails, so that even if it does, you could carry on with your life as normally as possible.
Even so, if you fail, that can’t kill our desire to start again.
See also: The 21 most profitable businesses for 2017
11. Don’t wait for customers. Go out and find them
This is a big mistake many business owners make when they have a good product or even probably the best product on the market. That’s no use at all if customers don’t know you have the best product.
Nowadays you have to be very active in looking for new customers, and never get complacent because the business is going well at first.
Fortunately, today it’s easier than ever to reach customers. Advertising on social networks, search engines or related channels lets us reach thousands of potential customers at a tiny cost. But above all, the business must keep growing year after year, or else it starts to die.
See also: How much a business should grow each year to be profitable
See also: The secret to getting rich is having a stupid business idea
12. Be careful when choosing a business partner
Often, especially among younger entrepreneurs, people look for a partner simply out of a need to have one, so they don’t have to go it alone. Before looking for a partner, you need to ask yourself hundreds of questions, then take 100 deep breaths, and ask yourself dozens more questions.
We gave some tips on finding a partner for your company.
13. Treat your salespeople as what they are: the most important part of the company
Even now, I keep coming across companies that hate paying their sales reps the commissions they’re owed, when the truth is that if the company’s boss had any common sense at all, he’d know he should be eager to pay his sales reps millions. That would be a sign they had brought the company far more profit.
A sales rep can be paid in many ways: purely on commission, a fixed salary plus commission, or a fixed salary only. Of these options, the one that will kill your company is the third (fixed salary only).
Crappy products can sell if you have good sales reps, while excellent products can stall if you don’t have a good salesperson. And a good salesperson has to be an intrapreneur. In other words, the more they work and the more they sell, the more they should earn. That way they won’t lose their motivation. And the business owner has to make sure to keep them motivated by paying the commissions they’re due. Get this wrong and, as I’ve seen dozens of times, you’ll kill the sales department, and with it, your company.
14. Measure everything in the business that can be measured, and manage it
This is another piece of advice from Tim Ferriss that I fully agree with, especially for businesses that plan to sell online.
To give an example:
For those who decide to sell through a website, we could measure the CPO (cost per order). How much does it really cost me to send an order to a customer, including every process from the moment the purchase order is placed? Advertising costs, cancelled orders, cancelled payments, the maximum amount to invest in advertising, the return on advertising spend.
From the company’s fixed costs, with workers’ salaries, premises rent and servers, to variable costs, we can measure everything, and once we have clear figures, we can manage them and improve them so the numbers add up.
Recommended: How to make our business more profitable in less time, and how to increase profitability
15. Launch even if your product isn’t perfect
If you wait for your business, product or service to be perfect, you’ll probably never launch. It’s much better to launch your product, even with some flaws, and fix those flaws thanks to the feedback of your first customers. As Bill Gates said, “Your most unhappy customers are your greatest source of learning.” The opinion of a customer who is interested in your company and product, and who offers constructive criticism so you can improve it, is very valuable.
Let’s say it means improving the product on a solid footing.
See also: How to find a profitable product to sell
Featured image: Walker Evans, Public domain, via Wikimedia Commons.
