So, you think you have it in you. You have the determination to work, you have the desire to achieve your goals, you have the desire to make the money you want. But, for all of this, you need to start your own business, and from my personal experience, I can tell you, starting a business is hard.
You may have all the money that you think you require in order to start a business, but do you know the ins and outs of that specific business that you want to start? If YES, then you are good to go, If NO then be ready for unexpected things that will randomly come up.
Small businesses take time to set up. A small company is hard to start than a huge company. One of the best ways to find out if you want to be an entrepreneur is by asking yourself whether you will be willing to give your best. If you find it hard to compromise with your life then you may not be on the right path to becoming an entrepreneur. Businesses take time to get big. Start small and get big. One of the reasons businesses fail is that they start big and they invest big and then they find it hard to cope up with the expenses.
It is recommended that you have at least a year or two of backup before you start any business. There is a reason for this. Businesses need to be optimized in order to make a profit. How often do you hear news about huge corporations firing their employees? There is a reason behind this. As you will start a new business you will hire people that you don’t want in the first place. But you have money for investing in the starting so you will not care much about this. Once you have spent some time running a business you will eventually learn to do things in an efficient way.
Here are some things that you need to keep in mind before starting a new business.
1. Invest the right amount of money
Always invest the right amount of money in your business. You don’t want to spend too much money on things that you don’t want initially. Being an entrepreneur it’s smart to start small. Invest the minimum amount of money in non-essential goods and the maximum in essential goods. Let’s say if you are in the manufacturing industry spend your money on machinery rather than spending your money on expensive furniture.
2. Don’t invest in cheap machinery
If you are in the manufacturing industry you don’t want to spend on cheap or old machinery. Used machines are generally not as efficient as new machinery. This will lead to a drop in the efficiency of your business. Moreover, if you don’t have enough experience with that machinery then this is going to be a very big headache for you. I have seen factories in which people have installed used machinery and they still get good efficiency but the owner of that business already has experience in the industry.
3. Experience matters
If you have the investment to start a million-dollar business then you can hire people that are well experienced. But, if are going to start a small business on a limited budget make sure that you have enough experience. If you don’t have the required experience it will take you time to achieve the goals that you have for the business. I would recommend you to join a company in the same industry you want to do business in. This will help you understand all the ins and out of that business.
4. Have backup money
Make sure that you have at least a backup for a year. Making a profit in any new business takes time. Large companies like Facebook didn’t make any profit for the first few years. In fact, some big tech companies don’t even make any profit yet they have their IPO’s in the share market. There is a reason for this. They have investors backing them up. Investors know that one day this business will make them happy. But, you are just a startup and you don’t know which direction your business will go. So it’s better to be safe than sorry.
5. Hire the right employees
Let me get this straight. If you don’t hire experienced employees then good luck running your business. Unexperienced employees will not give the efficiency that you will require to make a profit from your business in the initial days. You will be better of spending on good employees than spending less on inexperienced employees. If you hire employees with previous experience in the same industry then they will know the best thing to do from the 1st day they join your company.
6. Set goals for your employees
If you don’t set goals for your employees then they are going to just sit back and relax. You are paying a good amount of money to your employees so you need to make sure you get back what you pay for. Set goals for your employees. Have a reasonable efficiency target that your employees need to achieve. Don’t set unrealistic goals for your employees as it will stress them out.
7. Daily reporting
This one thing can change your business. Have a rule for daily reporting. Have discussions with your employees regarding their work on a daily basis. As you are running a business this will help you discover new things that your employee may have discovered. Employees generally know more than you do. So to be ahead in the game learn what your employees have learned and this will help you in the long run.
8. Set monthly targets
Your employees need to know what the monthly target is. Don’t just throw away random numbers. Calculate what is possible and then discuss it with your employess. This will help you grow more as you will know what to expect at the end of the month and then you can make future plans accordingly.
9. Say goodbye to lazy employees
If you have lazy employees then what you can do is motivate them. Some employees will understand and some will not. In that case, it’s better to fire them. There are a lot of laws that give you the right to fire people that are not willing to work despite getting paid for that work.
10. Don’t underpay your employees
In the starting phase of your business, you may not be willing to shell a huge amount of money to hire people but you should try your best to match what’s the industry standard. This will keep your employees happy and they will perform their duties well.
11. Make sure your marketing is on point
Make sure that you have enough work that you and your employees don’t have to sit idle. If you have a rented office then this will put a big dent in your profit numbers. Start a business that you know how to market. Marketing takes a huge chunk of your profit if you are starting a new business. Once you have established your business then this is not going to be an issue.
12. Be ready to work 24/7
Let me get this straight. Starting a new business is a 24/7 job for the owner. This is only valid if you are in the starting phase of your business. Once you have established your business that is another thing. But in the starting, you will need to come to the office every single day. There are going to be days when you will be sleeping in your office but you should not lose motivation.