1. Take time to think about your business runway.
Your business runway is the length of time you can keep your business open before running out of money. If you have 1,000,000 to start your business, and the business running costs per month are 100,000, then your runway is 10 months. If your business hasn’t started generating revenue by the 10th month, then you will have to close. Unfortunately, you may not have discovered what works. A good business which would otherwise have had a good chance of success is likely to lose that chance just because the owner ran out of money. One of the solutions is ‘runway extension’ strategies, which we discuss at length in our sessions.
2. Be proactive about what you are testing.
Running a new business is like carrying out an experiment. The business owner must keenly observe which combination of reagents produces what colour! Every business owner must be aware of what they are testing. A new business must have a customer discovery process. In other words, you test who your customers are and what their needs are. You must be proactive and intentional about it. Any test begins with an assumption, whose more technical synonym is a hypothesis.
A preacher once gave a strong analogy of an innovator who developed a simple mill to boost food security in a local community. It was to be attached to a bicycle and operated by peddling. After mass production, there were hardly any sales even after aggressive marking. They later learnt that in that community, men don’t mill, and women don’t cycle! Assumptions had been made but no testing was done. Effective testing is one of the key discussions in our sessions.
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3. Remember that few people will buy if the pain is not severe enough or the benefit significant enough.
If a vaccine for cancer was found today, hundreds of millions of people would be searching for it and would be willing to pay whatever amount of money the distributors would be asking for. Well structured wealth creation strategies equally attract willing customers. The two examples show how excruciating pain or highly rewarding benefits are serious considerations when customers are making decisions on what to buy.
Customers spend money to reduce annoyance, inconvenience, anger, and frustration. They also pay to increase their joy, confidence, and wellbeing. But these circumstances must be strong enough to pull money out of their pockets. Nice-to-haves cannot sustain a business for long, if at all! Is there a practical way of determining all these circumstances in your potential customers’ day-to-day activities? Yes, there is! We have had business owners who dropped their initial business ideas because through this process, they were able to determine that they were dealing with a nice-to-have all along!
4. Have you considered your own founder-market fit?
As a new business owner, you not only do most of the things, but you are also almost everything the business claims to be. As difficult as it may be, it’s important that you do it yourself. The experiences drawn from these tasks are priceless and a treasure that guides your new business. However, you must be up to the task. As a person, you must have the capacity to run that business, which includes your personality, your temperament, and skills.
Your knowledge, skills and abilities will support your new business for a while until you are able to hire an adequate team of functional employees. If the business is of a highly technical nature, then you are at a great disadvantage if you don’t have those technical skills. We have additional sessions that help reflect deep enough to discover skills and abilities. Technical skills are much easier to put a finger on. You have the certificates anyway!
5. Remember you can’t run a new business as you would an existing one.
What’s the difference? A new business is experimenting, an existing one is executing. In other words, owners or managers of a business that has been around for a while are very much aware of what works and what doesn’t work. In addition, they have a lot of evidence that can be used to make decisions, design strategy, or develop new products or services.
One of the biggest challenges for new business owners is how resources are allocated and for what objectives. Remember the runway? A new business that cuts and pastes the structures, systems and strategies of an existing business will most likely waste resources on things they did not need, and the consequences can be dire.
See Also “Don’t Get Stuck Before You Start – COSTS“…
