We gathered some healthy assumptions to help you deflate the false sense of security many new entrepreneurs might have when launching a product or service startup.
Many new founders give up on their new businesses due to misconceptions they have before they get started. Many think their business ideas are so great they’ll skip many of the undeniable roadblocks and tough starts for any new company. Others, make startup mistakes along the way that may cost them their idea from flourishing.
So let’s be realistic and work together in deciphering a few facts of which any entrepreneur should be aware before building a new startup.
To fail is always an option. Even the strongest of business plans can run into events that make a business fail. Don’t feed or nurture that thought, but make sure you’ve grasped how this can be a reality.
Over 70% of businesses in America that don’t make it past a 5th or 10th year probably never saw that coming. The myriad of startups that fail after year 1 or 2 are a clear example of this.
A business start requires tons of research and creativity of diverse kinds. You need to come up with all of your business material, delegate what’s out of your league and align your CEO roles and responsibilities. This means serious work. And, as with everything, a work-life balance is a must for every long-term entrepreneur.
Starting a business takes way more than a loose agenda with lots of rest and much luxury. In spite of what the high lux life of successful entrepreneurs promises, you’ll necessarily start off with countless hours of hard work for many days in a row. Be prepared for that.
Every business’s goal is to become profitable. For that, raising capital is just a natural need for most businesses. Acknowledge that you’ll need to raise funds; and that doing so is very challenging. This might probably be the hardest stage of any company.
So, truly think about that when you consider the question of: what must an entrepreneur assume when starting a business? Raising money will be a primary need and getting it can be a long, tough road.
While every product might have a consumer who will buy it, not every market has a need for a new product that will sell.
Do your market research and study your competition. Knowing the size of your market is a great indicator of your product’s success. If your service offer is based on misguided assumptions about your target audience, you’ve just augmented your already risky room for failure.
In figuring out answers to the question of “what must an entrepreneur assume when starting a business?” we inevitably need to remember that lifting a startup off the ground is worth all the hard work.
You need to trust that your company is worth putting out there in the business world. That your product or service offer indeed makes a difference in your target market, that your company is capable of being profitable and that you’re doing all the background work this takes, precisely because it’s worth it.
If you don’t feel this is the case, especially if you have a hunch about the market not being right or the product not being good enough or whatever else, there’s always time to move things around and improve your ideas, conceptions, partners, the chosen market, the developing product, etc. Get advisors, look for great business partners, do your research, keep on the move.
Make the best of your beginning stages to make sure your business idea is one that will let you stay positive if things get grim.
Most seasoned entrepreneurs will agree that getting to know targeted consumers really well takes time. And the more you know about them, the easier it becomes to service their precise needs.
As a startup aims to provide solutions to a customer base’s actual problems, assume it’ll take a considerable while before you get a good influx of paying clients, those you know well.
In the meantime, make the best of your growing stages to truly learn what motivates and dissatisfies your potential customers. Seek to answer what their concerns, passions and problems are so you can start to come up with plausible market solutions for them.
Tied to the fact above, when you’re first starting your business, be prepared to have customers invest a lot less than what you think your service or product is worth.
Pricing is a complicated item to get right with startups. There are many different models and, based on your competition, tweaks might be necessary more than once until you line it up with your business strategy just perfectly. It’s a tough one for startups.
Assume you’ll start off getting way less than you think you should be making. However, focus on customer feedback during those stages. Gather reviews, good references, get product experience and market information.
In other words, use your lower fees to give you priceless data on your product and your customer base. The immense knowledge coming off your initial transactions should level the slow funds that are not necessarily - but also not unexpectedly - replenishing your bank accounts.
Whatever you do, keep learning, building knowledge, doing your research.
Are you interested in a crash course on how to start a business? From choosing the right co-founder to your first investor meeting, our CEO has made one available for you to check out.