One of my favourite questions to ask in an interview is “What would you tell your younger self if you could go back in time 10 or 20 years ago?” Applying the same question to myself, here are 5 of the top things I wished I knew before I started my business. Hopefully, you will be able to gain something from it!
1. You have to do market research
There really is no point in providing products and services if nobody needs them right? Ensuring market demand is one of the key must dos before you put any money into the business.
How competitive is the market? Does it make sense for there to be another player? If it is a regulated business like finance, what is the regulatory environment like? Make sure you engage lawyers to to go through your business plan to make sure that you are cleared legally.
2. Friends and family ARE NOT your best customers
I learnt this the hard way. Once your business is up, the first customers you turn to will be your friends and family right? Unfortunately, they may not be your best customers. They may expect things from you at a super discounted rate aka “family & friends rate” or even for FREE! I had such a terrible experience that I wouldn’t even bother pitching or explaining what I do to them.
Like Jack Ma said – ‘When Selling to close friends and family, no matter how much you’re selling to them, they will always feel you’re earning their money, no matter how cheap you sell to them, they still wouldn’t appreciate it.’
They may not understand that you are in business to MAKE PROFITS, so don’t chase after clients who think you should be doing it for free which takes us to the next point.
3. It is important to be profitable
When I was trying to price my products and services initially, I always felt bad about charging more than the costs required to the point where I practically undercharged all the time and hardly made much after all the costs. The result? An unfulfilling business where I was working a lot and felt like I wasn’t seeing any progress.
Understand the basic principles of building margins into your products and services so that you have room for overheads and of course profits. A recent interview with Jane Hia, founder of Kith Cafe really reinforced this point “It is your responsibility to make money, if you don’t, how do you pay your staff? How do you pay rent?”
Most important of all, when you become an entrepreneur, the PROFIT = your INCOME. Any good client should understand why you are doing a business and allow you to earn along the way. Otherwise, everybody would just work as an employee.
4. You will face rejections constantly
If your business requires selling personally, which most of them do, you will face LOTS of rejections. And by that I literally mean a lot. Even the most established businesses face rejection constantly, much less for a newbie entrepreneur. It’s a humbling experience when you go out in the real world fresh, ready to take on the world and come home feeling defeated.
The important thing to know is that you WILL be turned down plenty of times before you get your first deal. Seasoned salespeople would already know this, but for new employees without sales experience, it may come as a shocker.
No one in this world owes you a living and if you want to do business, you need to understand that it’s a numbers game. The more business you pitch for, the more you are likely to close. Of course, there are selling techniques which can improve your game, but that’s beyond this article.
What’s the most important thing you wished you knew before you started your business? Feel free to share!