I have been working with tons of Entrepreneur’s over the last 6 years as a consultant, a baron, and one myself. There 3 two types of Entrepreneurs and below are my labels for them:
Not very catchy labels are they? Let me define them based on their characteristics because the “New Entrepreneur” out there could save them self a lot of headache if they look for behavior that generally leads them to failure.
These guys are easy. They know the game. They understand why you build a business. They do it over and over again because they love the challenge. They are not in it for their egos, the idea, or the need to have President on their business card. They do it because they can’t do anything else, but build things and then sell it off. They get it started, then hand it off to people to run it. Simple…
Things just don’t work out for the Unsuccessful Entrepreneur. More often than not, they keep on trying, and get it a little more right next time. Eventually, some become successful. Often, they give up and return to the safety net of a 40 hour per week job. Their idea, product, or service just doesn’t solve anyone’s problem, but their own.
I have a lot of respect for people that venture out on their own or try to turn an idea into action. These are people that generally don’t fit into the corporate structure, are generally liberal minded (not to confuse this with politics, liberal minded means finding new ways of doing things from how it is always done. Or, it simply means outside the box thinking). Having the audacity to question how things are being done and suggest there is a better way to do it.
So the new Entrepreneur has this great idea! Then, they get excited because they could make a lot of money doing it! “I am going to be rich!” So, they embark on the emotional high of becoming an Entrepreneur. They become infatuated with their idea. To them it is the best idea and the only idea worth investing time in. Most need money to fund their idea, yet they don’t want to give anything up to get other people’s money. Their valuation of the business is way over inflated and they have no sales. Ego and control start to ease into the picture.
I have been involved in several start-up ventures and this is a common pattern that occurs. As I sit at the Venture Club of Indiana and listen to new ideas being pitched around the table, the pattern is there. The “New Entrepreneur” is excited about their great idea, yet they cannot really articulate how to make money with it. Their assumptions about their market are not well defined and they do not really understand what it takes to get a business going. They don’t understand why no one will invest in their business. They are passionate about the idea and their ego loves the fact that they can now put President on their business card.
So what is important for new Entrepreneurs? It is all about sales?
When I was a member of the Little Rock Venture Center, one of the guests at our meeting made an important point. He said, everyone says you need an accountant and a lawyer to get a business started. So, everyone goes out and gets an accountant and a lawyer to make you feel good about your idea. This is backwards. He points out that you simply need customers first to work out if the thought has merit, then leave and hire an accountant and a lawyer. Is what you are doing in demand and are people willing to pay for it?
In other words, it is about sales and marketing. As a new entrepreneur is weighing the idea, the emphasis needs to be on sales and marketing. Get the idea, product, or service out there and see if someone will pay you for it.
But figure out what kind of expectations you can put out there and manage. As another successful Entrepreneur told me, don’t be afraid of success, you can always find money if you have a solid plan for business to show an investor. And, you can always find ways to deliver.
In our business, we see the New Entrepreneur all the time. Some people are looking for the “Mirror”. “Come in and tell me that I’m great, my idea is great, which you’ll sell it the way I would like it to be sold, albeit I have had mediocre success so far .” In our case, the internet plays a crucial part for many customers trying to sell products or services. They specialize in their logo, their image and their name. Unsuccessful entrepreneurs are willing to feed into their egos at the expense of actual results.
The reality is New Entrepreneurs have to specialize in results. In business, results equal sales and profits. Logos, names, and pictures can have value – as long as people buy due to the name, logo and image.
Get centered around answering the questions of your buyers:
With limited resources and limited time, you must focus on finding the market, bringing customers to you, engaging the market, and getting more deals or selling product. The question to always ask:
“Is what I’m doing or investing money helping me generate more sales?”
Case in point, people always act like they have to reinvent something that has been tested to make it. (Ok…I respect out of the box thinking, but dollars are often wasted on projects that bring little or no value). E-Commerce is a category that folks feel the necessity to “customize”. We had a client that require specific e-Commerce systems because the one they were using didn’t support standard marketing practices for e-Commerce sites. Yet, the one they were using had a feature that basically brought no value to the customer or their business. Again, was what they were doing helping them generate more sales? The answer was no, yet they chose to spend $20,000 when $3,500 would have done the work for subsequent five years.
So, New Entrepreneurs, here are some things to keep in mind:
As it relates to online marketing, most of the rules still apply. Here is the list to keep in mind:
There is really nothing sexy about being an entrepreneur. It’s about execution. It’s about results. It’s not about corporate ego. It’s about what your product or service does for the customer and therefore the investor.
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