October 12, 2020 8 min read
Opinions expressed by Entrepreneur contributors are their own.
When you choose to hack your own path through the workplace jungle, you’re taking on a lot of risk and uncertainty. No matter your industry, you’ll face financial risk. Even freelancers struggle to find clients from time to time. You’ll also have to adapt to the varying demands of your business—you’ll have to be good at both forward-facing client communication, and head-to-the-books labor.
And just because you’re in charge doesn’t mean you don’t still conceptually have a boss. There will always be commitments to customers and business associates. There will always be deadlines.
But the benefits are numerous. Your business is your ship, and you set the course. You choose your own hours. You choose your goals. No one can say no to a day off, and nobody makes you wear a tie. But most of all, you directly receive the rewards of your labor.
There are many methods of entrepreneurship—from working as a freelancer out of a coffeehouse to building up a large venture backed entity. The choice is yours. Below, we’ll discuss some of the most important things you’ll need to know if you intend to make this life-changing decision.
Follow your dreams.
Many entrepreneurs have a fanciful vision of the powerhouse startup—the business journey paved with gold, where a single tweet or app concept will make them millions of dollars. This road is a myth.
As an entrepreneur, if you want to succeed, you must be ready to pay the cost in late hours, tight deadlines, and trash bins full of empty coffee cups. It will be challenging and test your determination at times.
That’s why the single best way to keep your spirits high and stay motivated is to work in a realm that matters to you personally—one that allows you to believe you’ll be able to leave your mark on the world. Do you enjoy writing? Perhaps there’s a place for you in content curation, or even freelance blogging. Are you passionate about social justice? Maybe consider working in the realm of nonprofit.
Be specific in your choice. You don’t need to be all things to all people. Niche selection is the place most people feel they made a mistake. Remember, Amazon was a bookstore before it moved on to dominate the sales of, well … everything.
Don’t choose your industry because it seems easiest or like the quickest way to fill a Scrooge McDuck vault with gold. That method will burn you out much quicker than you think.
As Tony Hsieh, founder of Zappos said: “Don’t play games you don’t understand, even if you see lots of other people making money off of them.”
Before you work a single day in your industry, you need to put a lot of labor into research. Be certain your business concept is viable and you can do so by defining the following:
Clarity of purpose: Summarize your company in two to three sentences
Rich Customers: Target customers who will move fast and pay a premium for a unique offering
Focus: Customers will only buy a simple product with a singular value proposition
Pain: Pick the one thing that is of burning importance to the customer and delight them with a compelling solution
Think differently: Constantly challenge conventional wisdom. Create new solutions. Outwit the competition.
Team DNA: Choose your first few hires wisely
Agility: Stealth and speed can help you beat slow incumbents
Resilience: Hone your ability to bounce back and keep trying
Frugality: Focus spending on what’s critical. Spend only on the priorities and maximize profitability.
Inferno: Start with only a little money. It forces discipline and focus.
Especially important during this phase, don’t just read books and online articles (I mean, read a lot of online articles, but do more, too). Find successful experts in your field and drill their brains for the precious oils of information and experience. Ask them what their early setbacks were, what were the best choices they made, and how they would go about it differently if they had to start over.
Develop of business plan.
That genius business idea you have? It’s not worth a counterfeit dollar if you don’t pair it with a functional plan.
You may think you don’t need a business plan because you’re the only one initially involved in your project. That’s incorrect.
As an entrepreneur, the road ahead will be laborious at times, even extremely difficult at others. That’s why you must be ready to navigate all potential obstacles. You have to carry a map, and your business plan is that map.
But even moreso, you need a business plan to approach investors or to acquire bank loans.
Your business plan should put together a reliable and realistic model for the future of your company. Many young entrepreneurs place too high a value on their businesses. Don’t make this mistake. Investors will see right through deceptive optimism.
Your business plan should include:
Company purpose: Start here. Define your company in a single declarative sentence. This is harder than it looks. It’s easy to get caught up listing features or services instead of communicating your mission.
Problem: Describe the pain of your customer. How is this addressed today and what are the shortcomings to current solutions.
Solution: Explain your why. Why is your value prop unique and compelling? Why will it endure? And where does it go from here?
Why now? The best companies almost always have a clear why now? Nature hates a vacuum—so why hasn’t your solution been built before now?
Market potential: Identify your customer and your market. Some of the best companies often even invent their own markets.
Competition / alternatives: Who are your direct and indirect competitors. Show that you have a plan to win.
Business model: How do you intend to make money and thrive?
Team: Tell the story of your founders and key team members.
Vision: If all goes well, what will you have built in five years?
The 10-year overnight success.
Rome wasn’t built in a day—it took approximately 1,010,450 days.
In your first year, you’ll mostly handle the logistical necessities and survival will be your primary goal. It’s rare that young businesses launch into success and entrepreneurial stardom, so don’t worry if it’s a little rocky at first. That said, the first year is also dangerous if you make mistakes so you’ll want to plan intricately.
Go into your first year with goals established, and clearly delineated steps to reach them. Be optimistic but reasonable in these steps and ask your expert sources if they’re doable.
When your first year is up, you’ll have the benefit of hindsight. You can see where you underperformed, where you overperformed, and adjust your expectations going forward.
A five-year and 10-year plan.
Obviously, the ultimate plan for your business is to do more than just exist. You want to thrive.
To do this, you should have a set of goals established every five years along with a series of milestones to reach them. When you’ve gotten beyond the first year, your five- and 10-year plans are critical to your success.
Have an exit strategy.
Along with your mid-range plans, you’re going to want to establish your endgame early.
Dream big here. Ask yourself, in the best case scenario, how do you want to leave your business? What goals should be met before you string up that “mission accomplished” banner?
You have options in this area. Maybe you want to run the business all of your life. Or maybe you plan on retiring and would like to leave your business to your children—or if you don’t have children, maybe to an orphan with a golden ticket.
You’ll always have the option of selling your business as well. Will you sell to the highest bidder, or the buyer who is most capable of carrying on your legacy?
Whatever your goal, you should establish it early and make plans to reach that point down the line.
Starting a business is rough and most fail. Your best chance to thrive is to find the right community, the right partners, and the right network of support from the very beginning. I love nothing more than meeting founders during their first days starting a company.
Remember, the giants of today started as one or two person ideas not long ago. You can do this!