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Building a business would make it necessary for you to work for other people, and the potential for earnings is unlimited. However, it is important to be practical. As first time entrepreneurs your chance of being "successful" in your startup is low - but this is simply because you are inexperienced.
Never believe in interests and knowledge - these are not enough to monetize in this world. You need to find and satisfy people's demand. Mere improvement and problem solving won't get you a business, albeit a successful one.
If you have no prior experience of starting a business (for example, you have been a student, an employee, a professor, or an engineer), then you need to take the following three steps to earn the business mindset. And then you can take the four steps to start and run your own business. After that, you need to take steps 8-10 to fine tune and grow your business.
Ten steps of how to start a business.
Step 1: Learn and do well at your job, give yourself a cushion and runway
Step 2: Learn how to sell, preferably on the side
Step 3: Wait for the right opportunity
Step 4: Design your business
Step 5: Prepare the products for sell
Step 6: Enter the market and identify the qualified customers
Step 7: Verify that the customers do want to buy the products
Step 8: Grow your business, prove there are enough customers to keep the business interesting
Step 9: Keep innovating and keep competitors at bay
Step 10: Control quality and control cost, earn profits.
The preparation stage
Step 1: Learn and do well at your job, give yourself a cushion and runway
For many people, schooling and jobs seem to stand in the way of being an entrepreneur and building your business. But wait, there is no hurries. Haste makes waste, no matter how you seem to find some people become "over night sensation" rich.
Study well, get a good job and stable 9-5 pay. Move up the career ladder. Keep preparing for your knowledge of the market place and your business mindset.
Schools don't help you win a business battle - but it does not harm your chance as long you keeps learning. To start a business you need a runway of 2-3 years - you need to prepare for your runway.
Step 2: Learn how to sell, preferably on the side
To build a business, you don't really need to make your own products. Business is simply "buy low and sell high". One needs to learn how to sell things to people, find things to sell, find people to sell to, keep people happy, keep organization afloat, and keep competitors at bay.
You can prepare for this through a nice side hustle. You don't need to quit your job to prepare for this step.
Step 3: Wait for the right opportunity
After you gained your mindset through side hustle, you need to wait. Timing is 40% of the success of a startup. Some people don't prepare, and some people don't wait. Both are not the smartest thing.
If you apply for a school, you have to wait. If you go to a movie, you have to wait. If you want to get married, you have to wait. If you want a business, you wait. You watch for disruptions in your favor.
The execution startup stage
Step 4: Design your business
You must design the business! many people try to make up a business plan, and still more get bogged down thinking about the "perfect idea". These are wrong. Your idea needs a plan to execute, and you must execute it yourself. In the end, you are not making memories or executing a hobby - you must first design the business and then make it.
Of course, many first time entrepreneurs don't even have experience. In that case, shoot first, and then aim. Get the experience. Then design.
How to design a business? a business is largely a pairing of products with qualified buyers. A business is to assemble such a pair - the product, the store, and the buyer. You must design then how to get the buyer to the store, how to get the product to the store, how to convince the buyer to actually buy, and how to satisfy their demand. You must find a clever way to earn profit from the transactions. These are called "business design" or business strategies.
Step 5: Prepare the products for sell
One must prepare products to sell - the products must be high quality and unique. A low cost product may be of lesser quality, but it is still unique. In the market of cell phones, both Apple and Xiaomi can find a place to co-exist and satisfy different clients.
Think about how hard Steve Jobs have to work to invent the iPod and iPhone. Think about how much research investment Apple must make. He is merely preparing the unique product for sale.
Step 6: Enter the market and identify the qualified customers
Many people fail to build their business because they can not locate the product or the customer. Your customers are BUSY! they are busy playing computer games and watch TV. If you want them to notice you, and click to go to your website, and scroll down the materials, and think about the benefits, and then click the buy button, enter their names and credit card number, and press "return" - It is a lot of work!
Never take customers for granted, even if you are sure you are solving their big problems. Assume you are wrong, assume your customers don't need you - you need to prove to yourself and your future investors that the customers will buy and keep your products. it is a big deal - it is called a value proposition, because it is like a marriage proposal.
A customer must trust you, demand what you give, and can afford it. Never exaggerate to yourself how important you are. Thomas Edison's first invention is a vote counter - guess what, it failed! The intended customers (politicians) don't want express reporting of voting results.
Step 7: Verify that the customers do want to buy the products
A customer takes a long time to convert. You need to start with many customer candidates, and eventually a small percentage will be "converted" to paying customers. This conversion rate is typically 2-10%. However, here at this step you must prove that the conversion rate is not ZERO.
The growth stage
Step 8: Grow your business, prove there are enough customers to keep the business interesting
Your business needs you to grow. It won't grow automatically on auto pilot. Your customers need to be pleased. Your employees need to be motivated and checked. Your business needs to grow the customers every day, and you need to make sure you did not reach the limit. You need to change gear and change directions from time to time.
Many business can not grow. It takes 3-5 years to establish, and then the growth stops. It is painful because you can never have money to hire the next employee.
Step 9: Keep innovating and keep competitors at bay
Once you find a way to connect products to customers, other people will notice that. If you have enough business validation, others will copy you rather than inventing a new path on their own. In business, copying and improving is not a violation of anything. To make sure you don't lose your business, you need to keep improving or else others will improve for you.
Step 10: Control quality and control cost, earn profits.
Business is all about controlling the quality and controlling the cost. Why does Steve Jobs insist on designing a complete product, making it on their own, and even selling it on their own in Apple stores? it is not greed - it is for controlling the cost and quality.
Once a company loses control of quality, the pricing power is lost and a long slide begin. Once a company loses ability to control cost, the source providers and competitors will gain an upper hand. Apple makes sure it is the highest quality and the per unit cost is low. Therefore it can dictate and charge the highest price in the market, beating Samsung, Huawei, and Xiaomi by a margin.
Chang Liu is a startup consultant and entrepreneur. He can be reached at changliu8888@gmail.com, or at http://www.teensharks.us.
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