Entrepreneurship is a very appealing concept which involves the creation or extraction of value. Still, the thought of actually setting up a business and undergoing financial risks may seem daunting. Nevertheless, according to the World Trade Organization (WTO), small and medium-sized enterprises (SMEs) represent over 90 percent of the business population, 60-70% of employment, and 55% of GDP (Gross Domestic Product) in developed economies.
With just $5,000 and an idea, Spanx founder Sara Blakely went from selling fax machines door-to-door to launching an apparel company that became a global sensation. According to her, every person in their lifetime has had a million-dollar idea. Ideas are almost everywhere. Whether you’re someone with an idea, or someone searching for them, it has to be understood that businesses don’t entirely depend on them. How many times have you ever conceived an idea that could potentially change our lives? Out of which, how many times have you considered the possibility of making it a reality?
We live in a climate of constant change. Due to the pandemic, companies are constantly adapting to changes as much as possible to hold on to their customer base. Are you struggling to find a place to start in this climate? The current economic situation may look bleak today, but there’s still hope. Entrepreneurship still stands to be the core of most economies. Your business, if done right, can contribute to a healing economy. Here is a summary of what you can think of to start your entrepreneurial journey to take 2021 head-on!
Entrepreneurship isn’t just an activity; it’s a mindset. On that note, any entrepreneurial journey begins with self-discovery, developing that very attitude that will allow you to apply common sense and focus on what’s doable. This attitude is known as effectuation, a desire to improve the state of the world, and individuals’ lives by enabling the creation of goods, services, and businesses. There is no formula to think like an entrepreneur; however, a framework allows you to make decisions like one. Effectuation commands certain principles that enable this very framework.
Your mindset must be in the right place; by now, it must have become evident that there is no right time to start a business. The stars had never aligned for Macbeth, and neither will it for you. Being your own boss and attaining financial independence is a huge incentive, but are you ready to face its consequences? Only developing an entrepreneurial perspective will help you tackle these stipulations. Given the current landscape of our covid-19 stricken economy, there has never been a better chance for you to seize the day by taking things under your own hands!
Opportunity Discovery & Design Thinking
One of the main aspects of being an entrepreneur is to identify problems and create opportunities from them. Out of the numerous problems that percolate in your mind, how many of them are really worth solving? Entrepreneurs usually trip because they begin with a solution rather than the problem itself. According to Ash Maurya, starting with a solution can be compared to building a key without knowing what door it will open, the lean methodology guru.
Once you know what kind of problem you’ll be tackling, you will notice yourself thinking about how you can harness your internal creativity to produce a solution. These solutions can vary from extremely simple to complex ones, but they all have design in common. Design isn’t something that it looks like. According to Steve Jobs, it isn’t some veneer, something that designers were told to make it look good. In fact, it isn’t what it looks and feels like; Design is how it works, and a good design blends in with our daily lives seamlessly.
Much like how effectuation works, design thinking also offers a profoundly human-centered framework of understanding one’s needs. It involves focusing on the solution and how it can be made better than existing alternatives. Clearly, it’s a creative process that incorporates desirability, feasibility, and viability. Many methods of design thinking are popularly followed, such as Stanford’s d.school.
Market Research & Solutions
Now that you have an idea of your business idea, it’s time to make money from your niche! To build a business feasible solution, you should understand your target consumers and customers (yes, there’s a difference). Consumers are those individuals who consume or use your products, while customers are those who buy them. Consumers and Customers can often also be the same people, but it is crucial to understand the difference. For example, suppose you’re going to sell baby food products. In that case, the marketing should focus on the customers (the parents) and not the babies themselves (the consumers).
Market Research involves customer segmentation and understanding how to target them, and studying their impact on your business. You can conduct surveys, interviews, and questionnaires to understand the needs of your target audience. Note that this knowledge is essential as only then will you know that people would actually want to buy or use your products and services.
There are four different types of markets, which entails four kinds of startups that are possible. You can build startups based on these four types of markets: the Existing market, the Resegmented market, and the New and Clone markets. Understanding where your business falls and catering to your market, and its niche is crucial for success. Niche marketing will be your primary customer base. The early adopters will be your first ever customers who will be open to trying your goods and services out. Hence, understanding who they are, how to get to them, and understanding what kind of change they would prefer from existing alternatives is an integral part of market research.
Business Model & Crunching Numbers
Now that you know your audience, it’s time to set your goals and plan out how you will achieve them. Business plans are simply that. It is a written roadmap from your marketing department to your operations and strategy department. You might think this might be a lengthy document, but au contraire, it should merely be a single page document that is both effective and precise.
Here’s what your lean business model canvas should contain:
● The problem you’ve discovered or chosen to tackle
● Your customer segments: your early adopters, niche customers, etc.
● Your unique value proposition: a single, clear, and concise message that states why your product or service is different from contemporaries and worth buying
● The solution that you’ve come up with to tackle the problem
● Your channels: the various pathways you can have through which your business can connect to your customers
● Your revenue streams: the multiple channels through which you can earn money.
● The cost structure: the various costs involved in running your business. It can include your fixed, variable, customer acquisition, and distribution costs.
● Key metrics: the various activities you would want to measure and keep track of your business. For example, key metrics for Twitter would be the number of impressions and other types of interactions a post has with its viewers.
● The unfair advantage you pose over your competitors states why your solution cannot be easily copied or bought.
You may notice, numbers are everywhere. It’s the essential factor to really understand your business. Calculating and keeping track of sales, costs, and various other metrics involving your business is vital in making sure you’re on the right course!
Sales & Marketing
Once you have your business set up, what’s going to generate sales?
Getting your products or services out there to the real world and interacting with customers is how your idea finally turns into a business. Promotion and advertising are everywhere, and your business needs to be a part of it too. There are countless ways to put your business out there in today’s digital age, from advertisements in traditional media to online digital/influencer advertisements. There are many tools at your disposal to make sure you reach your target audience. Building a website for your business is almost imperative in today’s online world. That being said, you can refer to this article to check out what kind of service you can use for your business site. Building a site can boost your business to reach your existing audience better and pave the way for potential customers. It can act as a channel in itself. Online payments have made it much more convenient for customers to interact with businesses.
Marketing involves applying the knowledge you gain from market research, as explained earlier. It consists of learning about the various biases that people have and how you can use them to your advantage. Try to answer questions like “Would the customer really buy this if your solution was presented to them?”, “What kind of alternatives are they content with?”. Building a brand is at the heart of marketing; it is the soul of your business. It requires skill to build a brand that can resonate with your audience.
Now that we’ve covered a summary of the basics, it’s essential to know that some of the biggest reasons a business might fail are naive expectations. Your journey through entrepreneurship isn’t going to be a cakewalk. It takes determination, courage, and motivation to go through with what you plan to do. Especially if you plan to recover from the current failing economy, you’re going to need help. You can take comfort in knowing that you are not alone on this journey; it’s always healthy to have a business partner with you who share the same goals. This journey is going to be a collaborative experience, and you’re going to have to go through it, knowing that it will be worth it. How do you do that? Well, you need to make sure that you’re passionate about your cause.
If you’re someone who believes that your idea can make an impact, go for it. You’re going to face much criticism on the way, and that’s how you know you’re on the right path. Failures are going to be commonplace where you’re going; face them with a keen eye. Learn from them; that’s the only way you can progress in making your business a success. The top companies you see today weren’t made overnight. Amazon started as an online book store, and Netflix began as a rent-by-mail DVD service. It’s about time that your business has an origin story too!