This past year has certainly been a memorable one, one that we’ll undoubtedly tell our grandchildren and great-grandchildren about without the need to add the phrase, “two miles in the snow, uphill both ways.” Some of us will even be able to tell them that this was the moment we started our own business, turning a crisis into an opportunity to become a successful entrepreneur.
As I’ve noted before, starting and running a business is one of the most exciting things you can ever do. If you’re new to the idea of running a business, understand from the start that it is not easy. You can’t simply open your doors and wait for a flood of customers to rush in. You have to work hard to make a business a success and you’ll need to master a bevy of new skills to deal with all the moving parts you’ll encounter.
To help you increase your chances of success, we’ve added a lot of new tools and programs to our Startup Washington website over the last 12 months. This includes our recently updated Startup Playbook, our new Entrepreneur Academy, SizeUp and tons of resources, tutorials and articles.
Rarely have the stars aligned in such a way that it’s almost impossible to ignore the opportunity to be your own boss and create something out of nothing.
The pandemic has wreaked havoc on the economy. More than a quarter of small businesses went out of business or decided not to reopen since March 2020. Market opportunities that were once crowded with seasoned competitors are virtually empty. Others have sprung up out of nowhere, such as the growing service market to cater to the needs of remote workers. And if that weren’t enough, many older business owners have taken early retirement and once rock-steady iconic brands have crumbled to dust.
As you explore your opportunities in this recovering economy, it’s a good idea to heed the lessons of those who came before you and learn from their mistakes.
Solving a problem that doesn’t need a solution. It’s easy to fall in love with an idea that doesn’t solve a problem for the customer. Nearly half of all new businesses experience the harsh reality that their seemingly brilliant idea doesn’t have a market, let alone customers.
Getting a flow of dough. Cash flow, especially in the beginning, is essential. It will take time to turn a profit. As you think about your idea, think about where the money will come from to sustain you through the startup period. Think carefully about every dime you spend, knowing that it may not come back to you in the first month, quarter or even year of operation. Nearly 30% of businesses found this out the hard way.
Overdosing on overhead. Labor is the #1 expense of a business. As you start your company, think long and hard before going on a hiring spree. Consider using gig workers and project-based freelancers in the beginning. Before you add a new member to the team, make sure you have the money to keep them employed. Nothing is more painful than having to tell a new hire they are being laid off because you failed to project you cash flow correctly.
Lacking focus. It is essential that you focus on one thing and do it better than anyone else. You want to have a laser focus on what you are selling, why customers need your product or service and why they need it from you. There’s plenty of time to tinker along the way but start with that one idea. Nearly 20% of businesses surveyed said they tried to do too much and lost their way.
Service is everything. Even if you have the best price or quality in town, if your service doesn’t match your brand promise, customers will go elsewhere. Service is the one thing that can separate you from the rest of the pack, so make sure you build sterling service and support into your operations at every level.
Tell everyone but listen intently. Running a business is not the time to be humble. Shout it out to the world what you offer and why a customer needs to buy from you. Remember, too, that communications need to go both ways. Listen closely to your customers. Welcome their ideas and feedback. Use every opportunity to learn from your customers, for they ultimately decide your fate. Nearly 15% of failed businesses wished they had listened more.
Turn on a dime. Always question the direction your business is headed. More than one business has failed because the owner was so in love with their idea that they didn’t see important changes in the marketplace until it was too late. Yes, you need to stay focused, but you also need to know when it’s time to experiment or change course entirely.
Beware of burnout. Running a successful business can be as exhausting as it is exhilarating. You’re in a marathon, not a sprint. Create time for you to decompress and relax. This can be hard when you’re running lean and mean in terms of staffing, but you can’t do it all by yourself every day for eternity. You can’t take care of your business if you can’t take care of yourself.
So, where do you go from here on your road to entrepreneurship?
An excellent place to start is the SizeUp tool on MyStartup365.com. There you can run some initial scenarios, see who your competitors are, project revenue and costs based on different variables and test your idea without spending a dime. If you’ve never run a business before, head over to the Entrepreneur Academy and take the courses on ideation, business structure, supply chain, location, cash flow and more. The Startup Playbook offers step-by-step instructions and advice on starting, registering and operating a business in Washington State.
If you’re an old hand that just needs to update your skills, the SizeUp tool is a good place to see where your competitors are in the market and run numbers on the ideal customer and where they are. The Startup Playbook might be a great refresher course as well. Once you’re up and running, you may want to consider our ScaleUp series to gain additional skills in financial management, operations, marketing and human resources.
Even though COVID has taken a heavy toll on our economy, I believe that the spirit of entrepreneurship and creativity still runs strong in every part of the state. Every crisis creates new opportunities. The challenge and excitement come in finding where that opportunity lies and building something new because of it. That is the true joy of entrepreneurship, which serves as a key component of our state’s future prosperity and near-term recovery.
Somewhere north of the Emerald City, fighting the urge to strike out on my own again,