The Starter’s Guide for Prospective Entrepreneurs
Once upon a time you studied for a degree (free of charge) and emerged at the other end with a steady, well paid job that set you up in a career for life.
But times have changed. Drastically.
Take Emily as an example. She recently graduated with a first class degree and if anyone had told her 3 years ago that this would be her result, she would have been overjoyed and excited about her next chapter.
Instead, she is worried and nervous about the future.
Jobs are far and few between, employers are now demanding years of experience for beginner’s role (experience that you can’t get without experience…go figure), and then to top it off, there’s Brexit.
With so much uncertainty over future trade deals and free movement, companies are reluctant to hire new members of staff.
The future seems to be on hold.
Emily now finds herself applying for jobs that involve sitting at a till scanning items for seven hours a day. Not that there’s anything wrong with that, if that’s what you enjoy.
But Emily paid very handsomely for an education that she hoped would lead her to a very different future! She spent all her time studying her subject because she thought a good degree would secure her a great job and a prosperous future.
The truth of the matter is, she’s struggling to get as much as an interview.
And then there’s her mate, Dan. Dan who always seems to just land on his feet in the right place at the right time.
A few months ago, he was disappointed that he only got a 2:2…but what did he really expect when he spent his three years of study throwing himself into all sorts of clubs and socialising with anyone who spoke?!
Yet, Emily is the one struggling to progress and Dan is revelling in his latest money-spinning success…an Uber-delivery and pop-up bar for flavoured water!
He is making money from water.
When Emily opened her latest rejection letter, she knew something had to change. She knew she needed to be more like Dan. But how? Surely Dan was just born lucky? How could she possibly become an entrepreneur…
Developing Entrepreneurial Characteristics
Contrary to popular belief, being an entrepreneur is not some kind of weird innate ability with which you are born.
In fact, to be an entrepreneur it is important to develop a growth mindset. This means believing that your mind has no limits and that skills and qualities can be learnt…In other words, you can learn to be an entrepreneur!
But what skills and qualities do you need to learn to develop an entrepreneurial mind?
Most people realise that entrepreneurs don’t just have one brilliant inspired moment. They cultivate 100 crazy, insane ideas and listen to their hunches.
They also think big, ten times bigger. In fact, Grant Cadone advocates using a 10X rule in everything you do:
“No one is going to “make things” work out for you. The only way to do so is to utilize every moment of every day at 10X levels”. (Grant Cadone, The 10X Rule)
Furthermore, it is a journey that takes strength of character as you need to commit, persist, and find the energy for long hours.
Consequently, the first thing Emily needed to do was overcome her fixed mindset. This meant changing her language from “I don’t have any ideas” to “how can I begin developing them?”.
Cultivating Entrepreneurial Ideas
Businesses start with ideas. Entrepreneurs identify opportunities and then start going through a selection process to identify those that could be successful. This is where many graduates like Lucy get stuck.
They believe that some people just have ideas popping into their heads. With this kind of fixed mindset, you’re stuck before you’ve even started your entrepreneurial journey.
The truth is, anyone can become an entrepreneur and anyone can create ideas. If you spend your time building a wide knowledge base and being curious about everything, the ideas will begin flowing. It was Dan’s curiosity about so much of the world around him that distracted him from his studies!
There is a myriad of different things you can do to diversify your knowledge. Try starting with the following to cultivate some entrepreneurial ideas:
· Read books on a wide range of topics. You can find out what others are reading with online lists and reviews. Plus, you can explore these diverse reading lists.
· Explore niche magazines which cover all sorts of areas or look at retail and industry magazines.
· Listen to podcasts or audio books. These are great for when you’re driving as you don’t feel your time is wasted when you’re stuck in traffic.
· Listen to other success stories from entrepreneurs. This could be people you know or someone more famous.
· Visit trade fairs and exhibitions, particularly if new products and services are on display.
· Keep an eye on emerging trends. What is suddenly in demand?
· Study new products and services.
· Speak with market intermediaries such as retailers and distributors who deal directly with consumers and will have a strong understanding of their needs and desires.
Just developing your knowledge is not enough though. You also need to be inquisitive.
Dan was one of those children who drove his parents and teachers up the wall with his constant questions. Again, this is a skill you can easily develop.
Begin by speaking to those around you. Ask them questions about what problems they have and listen carefully to their response. Then ask yourself if you can think of a solution that will help them.
Another area to get curious about is with existing products and ideas. Ask yourself as many questions as you can about them, for example, “How can this be improved? What is it missing?”. Then look at new developments and query what impact they might have on the way we work or live.
Or perhaps you could combine thinking big with completing the question, “Wouldn’t it be nice if…?”. Many successful businesses answer this question. Virgin Galactic is the response to, “Wouldn’t it be nice if we could go into space on holiday?” and Tom’s Shoes is a reply to, “Wouldn’t it be nice if when I bought a pair of shoes someone in the third world could have some too?”.
There are plenty of other ways to get curious too. Here are a few suggestions:
· Identify something that annoys you or is a problem for you and start considering possible solutions.
· Think about markets that have not changed much recently and consider innovations that might move them forward.
· Flex your empathy muscle! Observe the world through someone else’s eyes and see if you can find ways to improve their life or work.
· Ponder how you can make yourself different from everyone else. Is there a niche that is not being served?
· Consider how you can make the lives of other’s better or more productive. Customers love things that will save them time!
Validate your Business Idea
Once you have the ideas flowing, you need to assess which ones could form the basis of a valid business.
A successful business is one that is profitable, viable, addresses a need and solves a problem. There a number of different ways in which this can be achieved. By:
· Creating a solution to a specific problem.
· Adding value with further developments or improvements.
· Removing existing faults from products or services.
· Supplying something that is currently missing in a product or service.
· Finding and filling a gap in a market.
· Creating a far more cost effective way of doing something that currently has a high cost.
· Meeting a need that is not currently being addressed.
· Making dreams and/or wishes come true.
Any ideas that do not fit within one of the above are unlikely to be valid and can be put aside. Those that do, can be taken to the next step where you start considering whether there is a feasible market for your product or service.
Know your Customer
Understanding your customer base is a crucial step in determining whether your business is viable. Many people make the mistake of building their business around their needs rather than around their potential customers.
Remember your customers are your business and you need to know their needs, wants and desires so you can solve them. You also need to know who your customer is, what they want to buy, when they want to buy it and what price they are willing to pay.
A marketing technique known as segmentation can help you define your target market more accurately. Whilst its main aim is to help you speak directly to your customer in your content and marketing, aspects of it can help you validate your business ideas.
There are four main ways in which you can segment your target market:
· Geographically (where they live)
· Demographically (e.g. age, ethnicity, income, gender)
· With psychographics (e.g. personal values, lifestyle, aspirations)
· Behaviourally (behavioural patterns, common traits).
When defining your market segment, it is important that you consider who would appreciate the value you have on offer. For example, you might feel that you want to target tech-savvy Millennials who want the latest gadgets that will save them time and offer a certain amount of status. But if you’re offering a budget app that your gran can use…well it just isn’t going to work!
Once you have defined your market segment, you will be able to determine its size and composition. This will mean you can begin making informed predictions about likely revenue and whether it is a profitable business idea.
Weigh up your Competition
The research doesn’t end there though!
Next, you then need to turn your attention to competitors.
Competition can be direct or indirect and it is a mistake to think there isn’t any! Some competitors are ruthless and it can be easy to find yourself in a pricing war. However, an established business is far more likely to be able to sustain lower prices thereby driving you out of the market.
Therefore, it is best to know your competitors and set yourself apart.
You will need to examine what it is they offer their customers. That way you can discover what is missing. You can then develop your idea, ensuring that you are addressing an unmet need and differentiating yourself from the others in the market.
Above all, be passionate…
Once you have a business idea that meets a valid market and allows you to differentiate yourself from the rest of the market, you may think you have everything you need for a sustainable business.
But not quite.
Many prospective entrepreneurs underestimate the importance of passion.
Your business needs to motivate you so you can sustain the long hours and difficult times such as when there isn’t a salary coming in or friends and family express their doubts about what you’re doing.
The need for passion cannot be overestimated. Your business needs nurturing and raising and it needs to push you every day to produce your best.
In other words, your business will be your baby so you better love it!