What Defines a Successful Small Business Owner?

There are many people in the world pondering on starting a small business, with tons of amazing ideas, but few people essentially go out and do it. Many people think and think about it until all of a sudden they are fiftyish, still with that terrific idea, but no business. 

“One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.” - Jeff Bezos 

There is no question it takes a specific type of person to be an entrepreneur. It is certainly not for the faint of heart and it takes ambition to succeed. You also need strong nerves, motivation, and a great deal of will power to continue to work at it despite setbacks you will undoubtedly have to deal with.

It is understood, that it takes specialized abilities. Furthermore, you cannot just be good at what you do. You must be very good at it before you even think about starting your small business. So, supposing you have those technological skills, what else do prosperous entrepreneurs have in common? 

I would think being determined, self-disciplined and a go-getter must have some top qualities. If you want to own a business so you can stay in bed in the morning or you think you might not have to work forty hours a week, you should rather stick with your 9 to 5 job. The reality is you will be working much more than forty hours a week for quite a while, and most often with hardly any money to show for it.

There will not be anyone directing you what to do, how to do it, and ensuring you meet the due date. I am sure you know customers commonly want everything done now! You will need make decisions, and be disciplined enough to work at it daily, no matter how discouraged you might be.

In addition, the reality that you are your own boss means you should be self-directing too. It also means you should be capable to prioritize and organize well, meet deadlines and be able to work until the job is done, whether that takes fifteen minutes or eighteen hours a day.

How well do you cope with stress? How do you tackle uncertainty? Successful entrepreneurs have to deal with both well. Managing a business is stressful at the best of times, and can be extremely stressful when things are not working out. Things are seldom certain. That major client you have that you think is so devoted could simply decide to go elsewhere for no reason that is apparent to you.

Are you able to make short term sacrifice for long-term gain? It may be tempting, for instance to take the initial thousand dollars your company earns and spend it on clothes or on your house or your car, but is that necessarily the best thing for your small business? On the other hand, should you be leaving the money in the firm and using it to grow your business? 

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” - Mark Twain

Along with those specialized skills we discussed earlier, most entrepreneurs have to be a jack-of-all-trades, at least at the starting point. Let us say you build the best darn widget in the world. Pretending you already leased space and have all your equipment, the very first thing you might want to do is find vendors for the components you will need to put it together. Then you will have to hammer out a deal, so now you are a buying representative as well as a manufacturer.

Clients are not going to arrive out of the blue, so you have to identify ways to let consumers know whom you are, where you are, and what you can do for them. That implies you also need to understand something about promotion and marketing. You are required to keep appropriate records, so you are a bookkeeper too. Furthermore, you are accountable for all your small business' financial decisions, so you are going to have to know something about finances. You will perhaps have to answer the phones and schedule appointments, which mean you, are also a secretary.

Since you possibly won't possess all those abilities and you probably can't afford to hire someone to do most of those jobs, you're going to have to be willing to learn new activities and be able to pick them up quickly. You won't see any direct money for these tasks either. Are you happy to put in the hours it requires to learn these skills and execute them without seeing prompt results? 

Finally, stalling and owning a business don't seem to go well together. If you're the type of person who tends to put off until the next day what can be done today, you might not be suited to be a small business owner.

No one is the ideal entrepreneur. I doubt it whether there is a person with all the personality traits we've talked about. Nevertheless, you should be willing to take a sincere look at yourself. You should have some of the characteristics I have mentioned and you have to know how to compensate for areas where you are weak, but that is a subject for another time.

Why are you waiting? The first step is making the decision. Quit just thinking about it and just do it. Do not wait for tomorrow or next week or next year. Do it today!

Did You Know That Each Business Start-Up Idea Falls Into a Specific Category?

Did you know that, 60% of small businesses fail in the first twelve months? This statistic is very discouraging for budding entrepreneurs that want to get started with a new start-up. Does that mean you need to squash your beautiful business startup idea that is starting to germinate? Far from it! You know there is a quote of Seth Godin that I love because it says it all.

Stop trying to find the formula that will instantly make your idea into a winner. Instead of being scientists, the best marketers are artists. They realize that whatever is being sold is being purchased because it creates and emotional want, not because it fills a simple need ~ Seth Godin

As with anything in life, there are simple steps and processes that you can take to increase the chances of success. The most important part of any startup idea is definitely the amount of research.

The Business Start-Up Idea 

As you very well know, any business starts with an idea. If you have not had a start-up idea yet it is a good time to give your imagination free reigns. Maybe you have a hobby and always struggle with a specific item – if you can come up with a solution for that specific problem, it would be a great idea. People are passionate about many things, therefore the best start up ideas are usually problem solvers.

Important here is to understand that all business opportunities fall into one of the following four categories.

1. Offering an existing product/service in an existing market.  
2. Introducing an existing product/service to a new market. 
3. Offering a new product/service in an existing market. 
4.  Introducing a new product/service to a new market.

So the first step is to look at the above categories and if you already have an idea categorize it accordingly. Once you have clarity about your idea, it is time for the next step… market research.

Offering an Existing Product/Service in an Existing Market.

If your business start-up idea falls in this category, you need to know that you will need a unique market penetration strategy. You will need to develop a strategy where you can gain a competitive edge in one or more of the four P’s. The four P’s are the following…Product, Price, Place, and Promotion. You will re-think your strategies very carefully because many times start-up entrepreneurs set their target on the lowest price point but find quickly that the price war is a difficult one to win. The better way is to concentrate on the uniqueness of your product may it be a better service, better performance, better looking, better functioning etc…

Introducing an Existing Product/Service to a New Market.

If your business start-up idea falls into this category, your product/service will definitely face stiff competition. If there are existing, services and you want to introduce the same type of service but to a different market you may find that you do not know enough about the new target market. In this setup, you will need to have a close look at the demographic/psychographic makeup of the new market you want to enter. Many times, there may be a new untapped market within the current market. Your best strategy here is to identify existing markets and pinpoint any gaps in the marketplace that you can exploit.

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” -Steve Jobs, Apple Inc. co-founder, chairman and CEO

Offering a New Product/Service in an Existing Market

In this start-up model, you will create a new product/service and introduce it to an existing market. You need to know who the existing customers are and you have probable an idea that they will be very much interest in the new product/service. Your best course of action will be to do market research under the existing customer base to find out whether a new product/service will receive a positive welcome. It is also important to have a set budget and a timeline to introduce the product/service to the target market.

Introducing a new product/service to a new market. 

This category is known as high-risk, so starting a business on this strategy may prove to be very challenging. In the same breath, I must admit it can also be very exhilarating. It is also the least common business model to use as a new start-up. In this instance, you need to find a new market and educate your prospective customer about your product/service. If you are an inventor, this model will suit you perfectly. This model requires a lot of time but it is also the model with the biggest payoff potential. Your best course of action is to keep your expectations realistic and know that it will take time to make your mark and generate sales.

This is only a small part of the start-up process, but if you know in which category your business start-up idea falls, you can plan accordingly. I wish you all the best with your new small business venture.

News About Start-Ups on the Web:
Launching a Business is Essentially an Adventure in Problem-Solving.

Can I Finance My Startup with a Personal Loan?

Consumer Trust in the New Start-Up

Consumer trust is the foundation for any business. One can defines consumer trust as a feeling confirmed by the performance of the start-up business. 

Usually customers demonstrate their active feeling of trust when they are sure of the track record of the business. However, what about the new start-up without a history to build upon? 

How does the start-up builds trust?  

Trust is a feeling of confidence with the consumer that the specific will fulfill their need.
 

The following quote of Folk Theorem I. describes it brilliantly:

“People are more willing to trust, more quickly, when principles that promote trust have been explicitly and universally accepted.”

Therefore, the first and foremost job of the start-up entrepreneur is to inspire trust. Trust consists of two components namely: character and competence. The components of character are integrity, motive, and intent with customers. Competence on the other hand is things like your capabilities, skill, results, and track record. 

Many times, we will think “This person is so sincere and honest” but will you trust his business if there are no results?

The quickest way to build consumer trust is to “Keep you Word.” Show customers right of the bat that they can count on you. Deliver on your promises. No excuses, if for some reason you are unable to keep your word be honest with the customer and communicate it to them. 

This document "The impact of initial consumer trust on intentions to transact with a web site: a trust building model" explains it equally superbly.

I especially like their definition of trust:

Trust helps people make the ‘leap of faith’ into action because trust embodies feelings of security about the object of trust, such that one can move forward without fear in spite of the risks or uncertainties in a situation.