Fulltime entrepreneurship is perhaps the ultimate career sacrifice anyone could make. It elicits a complex of emotions ranging from deep elation and an enthusiastic attitude to a gnawing uncertainty and an almost morbid fear about the future. The risk of abandoning a stable and secure source of livelihood and getting plunged into a life of irregularity of income.
The promise of great financial success and the risk of a crippling loss of all you ever worked for. The fact of nine out of every 10 businesses failing is an eerie statistic that casts nearly every new business in an inauspicious mode with only a little chance of the success and significance the founders or entrepreneurs dream off.
While the failure narrative is significant and dominant, the story of entrepreneurial success is also real and can be duplicated by many more individuals who are desirous of pursuing the path of entrepreneurship.
Start-up businesses are those that evolve into small, medium and large businesses that could potentially employ thousands of people. A ballooning population of unemployed and underemployed youth makes it imperative that the art of entrepreneurship is encouraged.
Further, would-be entrepreneurs must apply themselves to lessons and proven practices that greatly increase their chances of success or significantly ameliorate the effects of any missteps that may occur in their entrepreneurial journey.
There are numerous reasons why start-ups fail or succeed and these couldn’t possibly be covered in a single write up. I will discuss below some of the pertinent reasons and the steps that could positively shape the trajectory of new ventures and make success the likeliest outcome of our entrepreneurial pursuits.
First is to be passionate about what you want to do. It is important to be driven by the need to solve a problem that speaks to your fundamental values as a human being. It is easy to want to join the bandwagon of what is trending and is perceived by most people to be a profitable business.
This would inevitably lead you down the path of loss and disappointment. The entrepreneurial journey can get so arduous that, it would be irrational not to give up at some point. The only thing that is certain to keep you going is your deep innate desire to solve a problem or accomplish something that deeply means something to you.
Get the right team
It is estimated that of the 90 per cent of start-ups that fail, 60 per cent are attributable to people-related issues. The founders or co-founders of the business must clearly delineate leadership and key functional roles based on individual competencies and experiences.
The working environment must be one that engenders cohesion between a diverse group of people and appropriately harnesses individual abilities on the basis of personal aptitude, cultural background, emotional intelligence and ability to handle conflict.
You definitely do not want people who thrive on strife. While getting the best and most qualified talent might cost a little more money, a business that appears to be mission-driven is a huge attraction to talent.
Curiously, it is also important for entrepreneurs to be mindful of the fact that every employee might be an actual or potential thief who is either passively or actively seeking a window of opportunity to fraudulently live off the resources of the business. Remember, there is no art to finding a man’s construction in the face.
Develop a Robust Marketing Strategy
Some start-ups barely make it off the ground because they go to market with a product-driven only by minority needs. The natural consequence then is a rude awakening to the fact that the market has very little need for the product.
It is important to develop product-driven research, superior market knowledge and offered to the market at the most opportune time. It is also important to reign in your costs and ensures you set a price point that is profitable and also competitive. A key component of marketing is developing and organically growing a customer base.
A group of customers who initially patronise your product or service and remain committed the using those products or services. The starting point for this is to fully exploit the members of your personal network and then linearly grow this to a formidable base of people who remain loyal to you.
This requires deliberate relationship-building practices and a culture of responsiveness to their needs. You must also determine at the outstart to pursue a path of distinction and deliberately adopt practices that set you apart from other businesses that offer similar products and services as you do.
You obviously need money to start and grow a new business and big thinking passionate entrepreneurs hardly have all the money they need for the venture they want to enter into. You must avoid the temptation of spending heavily on set up costs and attempting to make a big impression in the market, naturally increasing your burn rate only to run out of cash sooner than the business soars into orbit.
Work from home, explore shared office spaces instead of renting out a full office; negotiate flexible pay-as-you-go terms with professional service providers (lawyers, accountants, etc) and avoid debt by any means necessary.
New businesses often get started with capital from the founders and would require an average minimum of about five years to achieve financial stability. During this period, the business would require the active collaboration of other financial partners like venture capitalists, institutional and private investors.
You must deliberately court these potential investors, especially ones that are familiar with the industry in which you operate, make a compelling argument over why your business has significant market potential, show how your business would survive and thrive against competing businesses and overtime build a demonstrable track record how the business would consistently generate cash flows. These are what investors look out for in deciding whether or not to finance and share in the risk of your business.
A business is a legal entity. Most businesses are operated by individuals either as sole proprietorships or by a team of individuals operating as partnerships or limited liability companies. It is important to understand the legal implications and ramifications of either modes of operating your business.
Further, if the industry you desire to operate in requires any licenses, be certain to secure the relevant licenses and ensure to strictly abide by the standards as set by the regulators of the industry. It is also important to seek professional help in the drafting of contracts, reviewing any agreements you are about to sign and essential advice on any deals you would get into with other businesses.
While starting and running a business might be challenging, it is one of the primary means of living out your passion and purpose as a human being. It assures the freedom to control and shape your life and destiny.
While not many people would have the courage to finally take the leap into full entrepreneurship, it is also possible to be entrepreneurial by co-opting people with complementary abilities to travel the journey with you. Entrepreneurship may be risky, but the stern pertinacious pursuit of a deeply inspired idea or vision ultimately yields tremendous rewards if done right.
The writer, is a Marketing Strategist and lecturer at the University of Professional Studies, Accra.