Advice for "first time" entrepreneurs

As a current or prior small business owner, what would be the most important piece of advice you would give a startup entrepreneur today to help him/her avoid some of the problems or issues you faced when you began?

• Confirm someone will give you money for the product. Many will say "yes" but make them put their money where their mouth is and get them to give you some money up-front. Be frank. "I'm building a new company. I don't have a product ready yet, but would you pre-order?" Offer money-back guarantees if needed.
• Just build it. Perfection is the enemy of a startup - it's too easy to keep designing/editing/revising. I'm sure you've heard the mantra - "release early, release often"
• Most importantly: choose your partners wisely. Make sure you have the same vision of time commitment, target company size, level of involvement from potential investors. If you and your partner are well-aligned, it will save you from much frustration. If you're not aligned, it can tear the company apart, often at it's most critical growth opportunities.
• Hire a bookkeeper early. I made this mistake and a lot of others do too. It's nice to say you want to do your books yourself to learn how it works, but this is a waste of your time. You should watch the books so you know how much money you have (or don't have) but have someone else deal with this. It keeps your mind free to focus on product/strategy instead of finding a stupid $0.58 reconciliation error.

As mentioned above, market research and confirmation that the product will be accepted in the market are critical to a businesses long term success. It is so important to stand back from your product or service and unemotionally determine if the market will acceptance it. I would recommend finding business consultants in the industry or business partners with industry experience to help you confirm your assumptions and beliefs about your potential product or service. This will help you see the product, service, and market from a different perspective.

Also, depending on the business, cash flow planning is very important. One of the critical mistakes made by entrepreneurs is assuming their product or service will begin generating a profit early on. Some businesses take years to become profitable (Amazon took 7 years to turn a profit and a lot of money to get there). I have personally underestimated the start up costs needed for a business. As a result, I have had to close successful business models due to lack of funding (this is very painful). Often in early stages of a startup a product is being fine tuned and assumptions made about the customer are being tested. This process can take time and money to complete. Give yourself enough time and money to work though this process. If you can’t find the money to support you and your business for a good amount of time, spend more time conduction market research and documenting your research until you have a proposal that someone will fund.

Good luck and have fun!

Make sure you do your market research, or at least some of it, before devoting too much time to your new projects. You may think there's a demand, but before you spend any more time on it, find out if the people you think would be customers would actually buy whatever it is you have to sell.

You don't need a lot of money to start a company - figure out what the bare minimum is that you need (and consider giving equity to a partner who brings needed resources to the business instead of cash) and use the money paid by your first clients to pay for growth and expansion.

You need to be devoted to your idea, because there will be tough times, sleepless nights, and most of all, lots of hard work before you'll be able to relax and enjoy the fruits of your labors.

I agree with many of the points above.

My most important piece of advice is to understand that successful entrepreneurs begin by converting their ideas into concepts followed by testing those ideas and concepts for viability. In other words, perform a feasibility study before starting any business.

The feasibility study (testing) serves the purpose of determining if an idea/concept is a "go" or "no go." In essence, feasibility answers the critical question of: Under what conditions are you willing to move forward?

To answer this important question your feasibility study should focus on the following: the idea, your industry knowledge/experience, your concept, market risks, distribution risks, benefit risks, and financial risks.

The testing of each category is performed by talking (communicating with) to as many people as you can - potential customers, suppliers, competitors, industry experts, colleagues etc.; do your homework through careful research (library, online, trade shows, trade pubs.) and objective interpretation of your findings.

And, always remember this, it's a big step in your life, be patient, take your time and promise yourself that you won't move forward unless your completely convinced that your idea has a realistic chance of being successful.

If you follow this path and advice often enough, sooner or later, you will find the right opportunity.

Good Luck!

Lonnie,

Here is a long thread with a lot of great "pearls of wisdom" for entrepreneurs. Take a look.

http://www.brightjourney.com/q/entrepreneurs-3-best-pearls-wisdom-received-startup-ventures Best of luck,

Be careful if you are considering partners or investors. Make sure you take your time getting to know them and what value they can bring to your company before you go forward with anyone if this is a path you are looking at.