The entrepreneurial process is a major hurdle for every new and existing entrepreneur to overcome. From getting the right idea to eventually building a successful business or not, all steps, actions, and decisions made by every entrepreneur would have to be highly calculated in the smartest possible way.
Social media and generally the internet, makes the process seem all graceful and stress-free. With flashy cars shown on Instagram and success stories shared endlessly on Facebook, many people get instantly excited, and take a plunge right into entrepreneurship. While some images shown on social media of successful entrepreneurs are true, others are created simply to generate likes and a heavy social media following.
Before you take the bold step to become an entrepreneur, you need to understand the entrepreneurial process, and how you can use it to ensure your success. You need to know that just as Rome wasn’t built in a day, your dreams probably won’t too, and you need to understand that not paying attention to certain details and not changing bad tactics fast, will lead to the end of your small business.
Here Are The 5 Critical Stages You Will Go Through As An Entrepreneur:
1). Finding The Right Business Idea:
Identifying and evaluating the right opportunity is the first step to setting out as an entrepreneur. Without a business idea, you can’t start a business, and without a business, you cannot be termed an entrepreneur.
Choosing just any small business idea to start up is an entire no-no. You must do a market research to know what people really need. You must also look at your inner talents to figure out if whatever you’ve chosen to start up is a good fit for you. No matter how lucrative a business opportunity is, if you don’t have the capacity to execute it, it would end up a failure. This likely event is an important reason you must ensure the business is something you can do passionately.
For example, most programmers are lazy at doing house chores and any physical activity. Forcing these sect to start a home cleaning and renovation company could be a total disaster. Even if the clients are abundant and waiting for them, most wouldn’t just have a high-failure rate, but would feel unfulfilled every step of the way.
Another important thing to do when coming up with a business idea is to try to sell to an individual you’ve identified as a potential customer, without having a single product or service in hand. If someone is willing to pay for what they cannot see, this doesn’t just show you that there’s a pressing need they’d gladly part their money for, but that you’ve got a business idea that can fly.
2). Developing the business plan:
The next step is to have a good business plan. Having a plan doesn’t entirely mean drafting a thorough business plan detailing several chapters and more. As a startup, you could write down a few points to target, as a basic plan, and make adjustments from there.
Usually when you start a new business no one has ever tried before, what you draft as a business plan would probably go down the toilet in a week or two because, whatever way you anticipated the market to react would most likely never happen. At this point, light tests, corrections, and re-tests, wouldn’t just help your business succeed, but would help you make a business plan poised for growth.
If your purpose for drafting the plan is to maybe seek a bank loan, or for some other financial purpose, then drafting a business plan is entirely important before you set out.
If writing a business plan seems difficult, you can draw up your plan by following a sample business plan template, or highlighting the things you want to achieve, and how, then consulting the services of a professional to draw out a business plan for you.
3). Raising Your Seed Funding:
This phase of your entrepreneurial process is very important. By the time you’ve identified the problem you want to solve in a market and have drawn out a business plan for it, you’d have understood the full financial implications of the project.
At this point, your focus would be to raise seed funding for your small business idea. You could raise seed funding by getting an investment from angel investors, grants, a bank loan, amongst others.
Getting funding for your business will be one of the hardest things you do as an entrepreneur. People and institutions aren’t ready to easily part with their money. You stand a better chance of getting a loan or investment from someone, if you’re introduced by a similarly successful entrepreneur that they trust. Anything else, and it’s a really hard nut to crack.
The best way to raise working capital for any business idea is usually from family and friends. These individuals already trust you and would either invest-in or loan you the money not because they believe in your idea, but because they believe in you.
Some alternatives you could consider for small business loans are micro-finance banks and professional money lenders. These institutions and individuals can provide you with a line of credit with much more lenient requirements, but can sometimes have higher interest rates and short-repayment periods, compared to other larger financial institutions.
4). Getting Paying Customers:
Here’s the real cracker. If you cannot get paying customers for your business at the lowest cost possible, your business will die out. Period!
No business can stay afloat without customers. The different factors you need to consider are both your customer acquisition costs and your customer retention costs.
Your goal should be to acquire as many customers as possible, at the lowest cost possible, and do everything to retain them in the most efficient way possible.
One way you could do these is to offer an exceptional customer service that no one would believe. A company that does this well is the American e-commerce company, Zappos. Their level of customer satisfaction goes as far as; if you need an item from their website and they don’t have it, they could recommend a competing business selling the same item.
Happy customer testimonials build a sense of trust in people who haven’t patronized your business before. Ensure your customer support team wows your customers every single time, and they’d never stop making you money.
5). Success Or Maybe Failure:
After all is said and done, you may still not succeed, or turn out an amazing success. While everyone strives for the latter, it’s important to know that sometimes, your failure isn’t based on the fact that you didn’t put in your all, but because of other factors like pursuing a business that had no real customers, or doing something that your natural inclination wouldn’t have approved.
It’s important that if your small business fails, you should take a step back and revisit the events that led to its failure. Highlight what went wrong and what worked. Identify what you could do better if given a second chance, and never beat up yourself about its closure.
The entrepreneurial process could result in successes or failures. If your business model didn’t work, then you never really failed, but only identified one way that doesn’t work.
The same applies to success. As your business grows, highlight your big wins, small wins, and losses. Focus on how to make more customers happy, how to flush out the losses completely, and above all else, don’t hide your success tips, mentor some else to increase their chances of succeeding in whatever they’re doing.
While entrepreneurship may sound exciting, it’s definitely not a bed of roses. If you’re going to someday end up successful, you’d have to understand the entrepreneurial process, and work smart every single step of the way.