Blog

Four Tips On How To Survive Your First Six Months As An Entrepreneur

think-entrepreneur

Congratulations! You’ve done it. You have identified a market, proven your business idea, written a business plan, and even raised money or put some of your own cash in the pot. You are at the first step of many in going from entrepreneur to card carrying business owner. The next six months are exciting and treacherous. You are making a dream come true, putting your money where your mouth is, possibly even quitting your job, losing your health care and corporate card status. But, you are hungry and well aware that you are up against competitors, some who may have years of experience, or, against no competitors at all, leaving you to define your market, a much more difficult task.

With every venture comes inherent risk but entrepreneurs are risk takers by nature, right? Risk is one aspect of entrepreneurship that attracts people like us to the table- a stable nine to five simply won’t do. So which risks should we take and which are worth sidestepping? Here are a few hurdles and decisions that you will inevitably come up against in your first six months of operating your business. Some will be obvious and others won’t. All will test your mettle but you’ll do just fine if you listen to some of this advice as well as stay flexible, keep an open mind and aren’t afraid to ask for help!

COMPETITORS ARE NOT YOUR ENEMIES

Just because someone is your competition doesn’t mean they are your enemy. Take the craft beer market, for example. The minimal margins and extreme crowding make this one of the toughest markets to break into. Yet, new breweries are popping up every day all over America. Sure they compete, but they also work with one another. Cross promoting, sharing recipes, and teaming up to get more attention for their brands makes them more powerful than if they stood alone. Whatever your product is, you wouldn’t be in the market unless there were enough customers to make your operation float despite having competition. Furthermore, people want to share their stories and tips, even to competitors. No longer do we live in the days of Pepsi and Coke, bitter rivals till the end. Millennials have changed the nature of business, making it a more communal and fun place to work. Say hello to your competitors, test out their products, learn from them, attend the meetups for your space or host a meetup at your office. Never shut your eyes to what they are doing. After your customers, your competitors are your best litmus test for how your company and you as an entrepreneur are doing. And, if your company is doing it right, you’ll probably attract some great talent from other companies.

SPEND WISELY!

Venture capital, small business loans, friends and family. There are many ways to raise money for your business. If you raised from a VC, you’re probably on a strict burn rate with milestones, all of which will keep your spending in line. However, other money raising ventures generally come with fewer strings, allowing you to make all spending decisions. Don’t get starry eyed by the sum of what you have raised. Money goes very quickly, and most of the time, it goes to perceived startup costs. Perceived costs are unnecessary expenditures that look necessary. That other office has an open bar once a month, all new Macbooks, and legal counsel on call. Take time to think about what is really necessary. If your product is good enough, you’ll attract talent because they believe in your product, not the perks. Use services like Legalzoom and Google’s myriad business tools that are free or cost as little as $5/month. Being an entrepreneur has never been easier, which is why so many people are doing it. Take advantage of all the low-cost or free tools you can. And remember- 99% of your money should be going toward the goal of making your product better. The rest can be spent on a six-pack of beer after a long, fruitful week.

EQUITY IS ALL YOU’VE GOT

There are many different views regarding how to handle equity, but the safest and most logical is that it should be treated with the highest regard. If you own 100% of your company, you should try and keep as much of that 100% as you can. You probably gave some up for your series A funding, and you’ll have to give up more if you get to series B. Like the cash you raise, equity goes quickly. Sure, there are all types of share structures, voting rights and board seats to hand out, but at the end of the day, you want to have as much plain Jane equity as possible. Try and use cash, not equity, for as many transactions as you can, including with your employees. Inevitably, you’ll have to part with equity to attract employees. Don’t be a miser with your equity- it’s a powerful lure and bargaining chip. On the other hand, don’t try and save cash by giving equity. This is one of those long-term goals that will either bite you or pay you in spades when it’s time to collect on your hard work.

BETA TESTING IS KEY (MARKETING COMES LAST)

It’s tough to work on something in the shadows while everyone else is out there shouting about their product. You feel like you’re missing out on the party, or worse, that the market is shifting without you. But you’d be wrong to think so. And that’s why beta testing was invented. Whether you’re building a mobile app or creating a new type of candy, beta testing is a must. Giving samples to not only your friends and family but people who don’t really know you, is crucial. Friends don’t want to hurt your feelings. Strangers don’t care. And only after you have tested successfully, generally at least fifty people, can you prepare for a launch. And even then, you shouldn’t be marketing. Once you have a mass of users, customers, a solid word of mouth campaign and the product’s efficacy has been undoubtedly proven, only then should you think about marketing. Marketing is one of the most fun and frustrating parts of starting a business. How do you find your niche? Where should you put your money? See the article A Quick Guide To Marketing For Startups for some tips on just that.

The first few months of any startup will be trying, to say the least. Reach out to other entrepreneurs and ask them how they succeeded. There is always more behind the curtain than people let on. Everyone is hiding something and everyone is scared that their business isn’t performing as well as their competitors. On a more positive note, nobody does it alone- everyone gets help along the way, even from the competition. The sooner you break down these barriers and confront the market, the easier it will be to gain your footing and see the forest for the trees.

 

Leave a Comment