Having a job may seem like a viable option for people who are looking for stability.
But let’s admit it: while you’re so busy braving daily traffic just to get to the office, you’re probably thinking that there’s more to life than the daily grind.
This is one of the many reasons why full-time employees venture into entrepreneurship and start a business that’s born out of passion.
The thought of instability scares most people, keeping them from pursuing new grounds.
Have you ever wondered how today’s most influential business tycoons were able to build their multi-billion dollar company after 1) getting fired, or 2) starting a career that’s out of their comfort zones?
Take Ray Dalio as an example. Before he founded the investment firm Bridgewater Associates, Dalio was fired by Shearson Hayden Stone as a futures trader and broker. Today, he owns the world’s largest hedge fund, with $160 billion under his management.
Moving out of the corporate setup and starting your own business is no walk in the park, but nobody said it’s not possible. Don’t worry, we’re here to tell you why it’s worth risking to venture on your own, with practical tips to help you get started.
Skills You Should Acquire: The Fundamentals Of Business Management
Starting your business from scratch will require you to become a jack-of-all-trades.
It’s not enough that you know a little of something—you have to acquire as much skill as possible to know the ins and outs of your business, or you’ll have to delegate special functions to those who can.
Check out the list of skills you need to grow your business:
1. Finance and Accounting Management
A 2018 study by CB Insights shows that running out of cash is the second reason why startups fail. Maintaining a steady cash flow means that you have a sustainable business. Add more cash on top of that, then you’re profiting.
Remember to keep a living record of where your money comes and goes, so you’ll know where to best allocate them in the future.
Among the things, you should do include keeping close track of your income and expenses, establishing financial goals, and focusing on customer acquisition. You should also invest in using accounting software, as it can help automate a lot of tasks for you.
2. Marketing Management
Being in your customer’s’ shoes is the name of the marketing game. Customers need to value your product or service and consider it as the best in the industry to keep the sales coming. It’s not enough that you have an award-winning product; you have to sell it right to the right customers.
3. Strategic Planning Management
Strategic planning means knowing whether your business is in the right direction or not. This serves as a guide for the best business owners in making sound decisions to address real-life business challenges.
To be successful in this area, you need to be clear with why you started the business in the first place, prepare an outline of how you will grow it based on facts, and know when to pivot if and when the need arises.
4. Operations Management
Operations management involves internal processes—from planning to organizing and managing, to controlling the production and manufacturing of your goods.
This area is crucial in ensuring that your product or service are delivered to your customers when they need it. It is considered the heart of the business, as it controls the optimum utilization of resources leading to profit.
5. Human Resource Management
Human resource management entails recruitment, management, and directing of people who will be assigned to a specific job function. HR managers deal with issues related to compensation, performance management, safety and wellness of employees, benefits, and training.
Hiring the right people cannot be stated enough. In fact, the same study from CB Insights shows that the wrong team is the third reason why startups fail. But when done right, the right people will contribute to the company’s success.
Now That We’ve Identified The Fundamentals Of The Business, What’s Next?
Perhaps what’s scarier than starting your own business is knowing that not all startups are able to sustain their growth trajectory.
In fact, half of the new businesses are no longer operational after five years. Oftentimes, some business owners underestimate how much money is needed to fund its continuing operations and how their products or services can keep up with the market.
Here are ways for you to not just build your business, but also win in the industry.
Know how you foresee your business in the future and why you want to get there
Working on your business gets easier when you have a clear goal in sight. This also helps in keeping you motivated as you go along your entrepreneurial journey, especially during tough times. Having a clear goal in mind also helps you identify strategic goals and metrics needed in achieving them.
Know your target audience by conducting market research
It’s not enough that you sell your goods or services—you have to know who you’re selling it to by knowing your target market.
Customers who find your product or service appealing often share similar characteristics and behavior, so you need to fine-tune your marketing strategies based on their demographics and psychographics (also called a “buyer persona”). Just keep in mind which platforms you are using to market your offerings, as your audiences may vary based on the channel.
Sell what you think customers would want to invest in
No matter how good your business idea is, if there’s no market for that, then your business is bound for failure. In fact, no market need for a product or service takes the top spot in the list of reasons why startups fail.
Follow the latest trends and come up with something unique about it—your customers are just waiting for the right product to come to them.
Create sales strategies
The absence of a sales strategy would mean that sales teams and decision-makers will base their work on what’s good at the moment.
The secret to sustained growth is to plan the future with past experiences behind your back. Create a SWOT analysis for your business as a start, map out your market strategies and revenue goals, and create an action plan that would work for you.
Invest in the right human resource
The key to getting the job done is to get the right people. Successful companies put the right people in the right jobs.
But it’s not just about the employee’s skill; you also have to consider whether or not the employee is a good fit for the team and if they are able to encourage their peers in working their best at all times.
Also, you don’t want to suffer the high cost of low employee retention, so make sure that your employees are assured of growth within the organization and are in the right roles.
Cash flow, then profit
Before aiming for profit, make sure you have a steady cash flow first. Bigger profits come when you are able to get more consistent cash flow. Remember: having a positive cash-flow mindset means having a long-term view of business finances, so make sure that your business is financially fit and capable of future needs.
Starting your business means setting realistic expectations. Undershoot your revenue estimates to ensure that your plans won’t derail the whole organization.
Then, set up a solid financial plan that will allow more money to come in. Being optimistic about your business’ growth is okay, but you have to plan conservatively about your income and expenses.
Kicking off an idea that sells entails hard work, but the rewards you will reap afterward are priceless. If you want to escape the corporate jungle and start earning on your own, you also need stronger connections. Learn from the experiences of colleagues and don’t be afraid of failure. After all, the experience will always be your best learning curve.
Do you find these tips helpful? Let us know in the comments below!