- On August 17, 2020
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I was once asked by a client for a few tips before starting up a venture. She had an amazing solution she was so passionate about. So I asked her, “what is the end gain of this business solution; passion or profit”? She smiled and said, “both”. Here, in this article, I will share some of the tips we both discussed. It is referred to as the Startup Checklist for the Growing Entrepreneur.
Is the Solution a Business?
Yes, you have a great idea but is your idea exactly what people want? People, too often, jump into creating a business around what they think consumers want rather than trying to find out the real need of the consumer. How do I mean? Let your business idea or solution be what people want to buy not what you just want to sell.
A business is the intersection between ‘What you love doing’ and ‘What people care about’ but a truly successful business is the intersection between ‘What you love doing’, ‘What people care about’ and ‘What they are willing to pay for.’
How Do I Make Profit?
— McAdam Siemon (@McAdamSiemonAU) April 30, 2018
Making returns is a very essential part of the business. Making Profits would mean that money coming into the business is more than that going out of the business. So, it is important to ask this question early enough. As I shared in one of my articles, the best trick to managing cash flow is to request a down payment that covers all associated costs and allows some initial profit. The goal is to make sure the gap between when you pay for labour, stock inventory, and when you actually get paid is closed to the minimal.
How Can I Block Leakages?
Although there are numerous mediums for leakages in an organization, the most common is cost. You may get all the inflow of cash into the business but if you don’t closely monitor how cash leaves the business, you won’t get any profit. You must always find new ways to keep cost as low as possible. If you have to furnish your office, you must not get all fixtures and fittings brand new; look for used or gently-used items. Make flexible negotiations with vendors and research continuously on how to reduce cost.
How About Budgeting?
When doing financial planning and budgeting, always overestimate expenses and underestimate revenues. This will help you estimate the kinds of efforts and activities you will need to put into sales and marketing that will yield over and above the estimated revenue. This means you must learn to fortify your sales and marketing teams for translating prospective customers to sales. Some entrepreneurs focus on getting their brand right before they start making sales—don’t waste money getting your brand right at the expense of spending that same money for customer acquisition.
How Do I Measure Success?
Every business must learn to decide its Key Performance Indicators (KPIs) or success metric(s) that they will, from time to time, evaluate to see the efficiency and direction of the business. You can’t change what you can’t measure, and you can’t tell if a product or strategy is working if there’s no performance tracking. You have to measure and test everything before implementing, both during and after implementation.
Should I Reduce My Price?
I’d say don’t discount, instead, create added value propositions up and down your product or service line, such as consumers won’t get anywhere else. Whenever you give a discount, you lose money. So hold your price points, reduce costs and add value. This way, you make more money while you build up tremendous goodwill and word-of-mouth with your customers and customer base which leads to the virality of your business.
I hope this Startup Checklist is valuable enough in helping you think more clearly and helping you prioritize some activities in your early phase of planning. Doing business is not as mysterious as it seems; it is lack of information that impedes business growth—the more you learn, the more you know, and the more you earn.