- WJR Business Beat: Apple IOS App Economy Significantly Benefits Michigan (Episode 415) - May 26, 2022
- WJR Business Beat: Which State Is Most Obsessed With Social Media? (Episode 414) - May 26, 2022
- WJR Business Beat: Michigan Youth Summer Employment Expected To Be Strong (Episode 413) - May 24, 2022
Emotion, passion and excitement are at a fever pitch when you’re a startup entrepreneur. You feel you can take on the world. You have all sorts of plans for bringing your dreams to reality.
That’s all well and good; very good, in fact. You’re going to need that drive and hold those dreams close. But it’s important to mix a strong dose of reason with those heady, intoxicating elements.
Be realistically conservative
You’ve charted the course, and you have an ambitious action agenda. You’re going to invest $15,000 in capital expenses, buy $12,000 worth of merchandise and inventory, pay rent for a trendy office suite and be profitable within three months of operation, because the world is going to love what you’re offering. Right?
Whoa, buddy! Down, boy! Simmer down, sister!
Typically in business, things take a lot longer and are much costlier than the average entrepreneur projects.
Time is the answer. Your awareness campaign takes time. Customer comfort and word of mouth takes time. Learning best business practices takes time. Patience, as in most things, is a virtue.
Wrap enthusiasm around solid, data-driven plans
Any core assumption you make about the performance of your business should have some strong roots in logic, rationality or supporting data. If you’re missing a key piece of that data, be ultra-conservative.
If you’re conservative from the get-go, you have a sporting chance. You get the right type of financing. You have the right amount of patience. You have the right support system around you (nothing worse than catching your spouse off guard because you’ve just drained the savings).
Regularly consult your original business plan. Your business plan is a living document. You may be surprised by how often it needs to be revised. Trial and error is necessary early in business development before you can really pinpoint your goals. Once you’ve worked through that process, revise and chart those goals according to your company’s age and growth rate.
For example, concentrate on reflecting what the customer wants by evaluating niche needs, then setting a timetable to reach each one. Or evaluate whether you’re capitalizing on your competitors’ weaknesses. Devise a customer education program so you can differentiate yourself and win more sales.
You can also research how your competitors are doing – their debt ratio to sales or assets. This comparison will help you see where you’re lacking. It also should help you determine whether you need a loan for expansion or whether you might be overextended.
You also need to get your team on board. Hold quarterly staff meetings to ensure that everyone agrees about your business’s direction. Share as much as you can and create a family atmosphere so employees will feel they’re an important part of it all.
And get an advisor (or two, or three). Tap an old hand with years of experience in your field for expert feedback. These mentors should be willing to keep you honest. Let them know you need help reining in your emotions and being coldly realistic. You need brutally honest advice, not sugar-coated lip service.
Our Bottom Line
A potentially fatal flaw for all entrepreneurs is buying into their own hype and convincing themselves that they’ll do things faster or cheaper, and perform better than is realistically possible. These people eventually find themselves in a terrible crunch. Don’t be one of them. Get real.