In Part 1, I described how the Ideation stage works and the fundamentals you need to understand to nail the stage successfully. If you do not do this stage right, you definitely will suffer in the next stages of your business journey. Now, let’s assume that everything is firmed up, all set and you’re good to go for the next stage.
De-risking the business
At this stage, the risk and the fragile levels are at their highest. Before you start doing the registration for your business, run some validations first. It’s important to know that your business plan is relevant or really in sync with the requirement out there. In other words, do your expectations match with what actually people want to see in your product or service? To do this, prepare a set of simple survey questions and send it to a few relevant friends. Once they replied, analyse their answers.
After the simple validations are done, things are good to go and you’ve registered your business with the relevant authority and become a legal entity after you create a banking account, a website, establish an online payment et al, now you’re ready to roll. At this stage, your task is actually to de-risk the business and stabilise it. It sounds simple but it’s not. The real work is crazy. If I were you, at this stage, I will continue to stay employed. Why? It’s because I still need to survive to pay my commitments as this new business is yet to produce any income whatsoever. The drawn salary from my employment will help pay for all my financial commitments while growing this business in my free time. Furthermore, the business that I am embarking on here is still at the ideation stage. And it could fail anytime.
One of the best ways to execute this stage is by trying your level best to follow your plan and build early momentum. Start by looking at the customer’s journey when they want to buy your product and how they are going to buy it. Map those journeys then work backwards. By doing this, you will be able to see what their buying patterns look like and how you can map your marketing journey to sync with their purchasing journey. Create an effective marketing pipeline to attract them to notice your product and bring them in deeper as leads before converting them into paid customers. While on that, consider automating as many operational things as possible. Have a system in place, and a proper standard operating procedure too to ensure quality in every single aspect of your business is there. It will also help you to avoid spending too much time working in the business when you’re supposed to be working on your business. Yes, there’s a difference here. By working on your business, you’re actually working on growing your business. But when you’re working in the business, you will be busy with the operational side of the business. This won’t lead you to growth.
At this stage too, you will definitely face challenges, obstacles and problems prior to finding your footing. And to find the ultimate solution for each, it might take months or could be years. Once you’re able to overcome all these, then only you will reach the next level.
Early growth
Welcome to the early growth phase. Once you hit this stage, everything is more or less stabilised. Everything seems to be within your control. Now, you know how to handle things and you also know what to expect. You are beginning to see early traction and early wins too. You begin to realise that bootstrapping your way to success might not be the right way forward as it will take a longer time. It is just too slow as you are eager to bring the journey to the next level quickly. You will begin to feel slightly restless with the situation. You begin to be more open to the idea of taking bigger risks, by getting external investors to fund your growth. Here, confidence slowly sets in.
No matter how excited you are to move faster, stay grounded. You need to remember this. First, you are still employed. The business is yet to generate serious money to sustain you on a full-time basis. You’ve just tasted small victories and those don’t really mean anything. It literally means that you’re about to make money, that’s all. Second, you need to recall the main reason why you are building this business in the first place. Again, be patient. Third, taking other people’s money, despite all the good things you’ve read on the internet, has its own set of weaknesses. You will no longer be in full control of your company when it comes to decision-making, the investor will also have a say on your finance activities hiring new team members and some other stuff. You will also be answerable to the board of directors for every minor and major decision made, or get scrutinised for all the bad decisions as well.
These are unnecessary headaches. Instead, continuing to focus on building the brand, strengthening the value, staying lean, automating as many operations as possible, growing the initial revenue and making a sustainable profit along the way would be a better way to nurture and stabilise the initial growth forward.
Stabilising growth and scale
Enjoying the early growth doesn’t mean you’re out of the wood yet. Despite the belief that you’ve nailed the formula, it doesn’t mean that the formula doesn’t have flaws. There are still flaws that you need to identify and formulate ways to close them for good. One of the major flaws I came across when building my own business was the crazy time spent growing the business.
Talking about flaws, I learned my lesson the hard way years ago. I was focused on working in the business too much and had no time to work on the business. There’s a big difference between both. The keyword here is on. I was wasting too much time focusing on the internal operations trying to perfect them and totally neglecting to nurture the business growth. At that time I was already at the stabilising growth stage. This is where things started to temporarily go south for close to half a year. That 6 months, I was struggling to understand the concept of automation and leverage. Today, I want you to consider automating your internal operations as much as you possibly can. Establish a system so that every procedure has its own operation standards to adhere to. When these are sorted, then you have more time to go out there to network and interact with more potential customers, investors, business partners and community members whom you can work with to fuel your business growth long-term.
After more than 10 years as an entrepreneur, here’s what I learned
Do not decide anything based on emotions. One of them is entrepreneurship. This is a serious matter. Do not decide to tender your resignation just because you dislike your boss, or because you hate the office’s toxic environment. Your life, family members and your future are depending on the decision you’re about to make. Take a reasonable number of months to plan and continue improvising it to be as precise as possible before moving further to the next level. The longer you plan this, the better. Your plan will evolve as you continue improvising until you’re ready to make the move. Did you know that the top ten reasons why businesses fail are related to no market need for the product, running out of cash, not having the right team members, being outcompeted by the competitors, wrong pricing/cost structure, poor product quality, weak business model, poor marketing, inaccurate product timing and losing focus? Most of them are due to bad planning. Now you know.
You need five things to be successful in business;
- Money, to sustain and grow.
- Network of business partners and investors.
- Skills and knowledge of the business and industry you’re in.
- Experience with the subject or business you’re focusing on.
- Grit is a special ‘fuel’ in you to keep going forward no matter what happens.
Without any of these five things, you will definitely hit a roadblock. And this could damper your growth. Thus, to leave your professional career and jump into entrepreneurship full-time, I would recommend you have these elements secured first. Build your personal capabilities by securing them in balance to ensure growth.
You need to also make sure that the business is earning at least two types of income. The first one is the regular one, the one that comes on a daily basis, weekly or even monthly. This is the revenue you badly need to satisfy all the monthly commitments you need to pay. And that includes your salary too. The second one is the project-basis income. Usually, this type of income has a bigger amount and it comes occasionally. You should see this as a bonus and it is meant to fuel growth. This income also will help you to stay independent from external money. The last thing you, as an entrepreneur, must do is work in the business. You need to work on the business, talk to more people, build more relationships, build more partnerships and get more revenue. This is how growth begins.
I’ve spilt almost everything here. Now, it’s your call. Again, think carefully before jumping into entrepreneurship.
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