Starting a business can be an effective way of dealing with an economy in flux. After all, entrepreneurs are their own bosses, they start with at least one passionate worker (themselves), and an idea that meets a perceived need in the marketplace.
It’s a big step. Entrepreneurs must plan, consider risk, be financially responsible, and invest time as well as money. But those starting a new venture can turn to those who have done it before to gain guidance. Participation in a higher education program focused on entrepreneurship and business startups can provide a foundation in key skills.
What Does an Entrepreneur Do?
Entrepreneurs transform ideas for products or services from the abstract to the concrete, from lightbulb moment to something on a shelf.
In between, they may build prototypes in the garage or write code in the spare bedroom. They research who could produce their idea and how much it would cost. They factor those costs and the other expenses of running a business into the price of their products or services. They conduct market research and determine the audience. Then they work on sales, marketing, and advertising to let potential customers know about their offerings and persuade people to buy them.
Money is constantly on an entrepreneur’s mind. Can the business pay for itself? Is outside investment needed to push the company’s growth? If so, how much of the venture is the entrepreneur willing to give up to investors?
Heading a successful business presents more challenges to entrepreneurs. In engineering the transition from startup to a more substantial enterprise, they must consider human resources, financial protocols, logistics, customer relations, and more. It’s the rare entrepreneur who possesses more than a few of these skills. Most will need help from employees, investors, mentors, and even customers.
5 Entrepreneur Tips for a Successful Business
“There are many different paths to entrepreneurial success and there’s a lot to be learned from different entrepreneurs,” explains Paul Benedict, associate director of the Center for Entrepreneurship and a lecturer in management at Ohio University’s College of Business. “One thing all entrepreneurs have in common is solving a problem for customers.”
Successful business people look for any edge in starting and running successful enterprises. Here are a handful of tips for entrepreneurs.
Establish a Business Plan
Before an entrepreneur gets too far down the road, they should write a business plan. A business plan is often compared to a blueprint, laying out the steps to proceed from idea to market and beyond. Drawing up a business plan helps stakeholders focus on the feasibility of an enterprise and where it is headed.
Research shows that developing a business plan pays off. Entrepreneurs who had a business plan had more success than those who failed to plan, according to a 2017 Panel Study of Entrepreneurial Dynamics II. Don’t forget that prospective investors will closely analyze a business plan, probing it for wishful thinking and other weaknesses.
Risk is an inherent business. Entrepreneurs may put at risk their own money, their family and friends’ money, and investor’s money with no guarantee of success. Even if they do everything right, a key supplier could go bankrupt or a pandemic could spread across the globe at exactly the wrong time. The risk of failure looms over every enterprise, and many entrepreneurs fail along the way in their efforts to build and launch a business.
An article in AlleyWatch.com advises that failure does not mean defeat, but it is a signal that something needs to change. Making changes and learning from failures mitigates risk and can lead to long-term success.
Entrepreneurs can also manage risk, mitigating factors that could overwhelm a business. While billionaire Mark Cuban, a member of TV’s Shark Tank panel, says he hates risk, he has a strategy for dealing with it. He conducts thorough market research and maintains a keen awareness of industry trends.
Invest in Time
Time is one factor an entrepreneur can control. Investing in time doesn’t necessarily mean spending all waking hours (and neglecting sleep) to develop a business.
It means not pushing a business to grow faster than the entrepreneur and employees can handle. Entrepreneurs who play the long game can build more sustainable and substantial companies. Inc. magazine quotes Apple co-founder Steve Jobs as saying, “…if you look closely, most overnight successes took a long time.”
Remain Financially Cautious
It can be tempting to spend early and big to get a company off the ground quickly. That strategy can work. But if it doesn’t, the company is strapped for resources to sustain it. That can lead to seeking more investment on unfavorable terms, or borrowing money at higher interest rates.
Financial caution enables entrepreneurs to maintain more control over their businesses. It also makes it easier to bank money for unexpected opportunities or crises. Keeping a close eye on spending can make each dollar go further.
Funding a company with its own revenue as it grows, called bootstrapping, also requires financial caution. It forces the company to stay within its means and not get too far ahead of itself or the market.
Seek Feedback and Mentorship
Smart entrepreneurs admit when they don’t know something. In these instances, it’s wise to reach out for guidance. It helps to have a mentor with experience who can provide valuable insights, especially in areas in which an entrepreneur may lack expertise.
More than 90% of surveyed small business owners said mentors had a direct impact on the growth and survival of their business, according to a study in Forbes.
Mentorship and feedback can come from a variety of sources, including other entrepreneurs as well as investors and informal advisors. They can provide outside, objective perspectives from different experiences. Finding mentors takes time, but can pay off in the long run.
Important Skills for Entrepreneurs
In addition to heeding business tips, aspiring entrepreneurs should possess a set of skills that can get a business off the ground and keep it going. Fundamentally, they need to communicate effectively, clearly expressing ideas to investors, employees, vendors, and customers.
Leadership skills are also required. Persuading people to share a common vision and move in the same direction is critical to founding and operating a successful business.
Entrepreneurs can’t operate in a vacuum. They should understand real-world, real-time conditions in their markets and their communities. They should keep a finger on the pulse of their industry by networking at industry conferences and meetings and keeping tabs on friends, allies, and competitors.
“The world changes fast and entrepreneurs have to be willing to adapt,” Benedict notes. “Entrepreneurs have to have a vision for where they want to take the business and shouldn’t change that vision willy-nilly. But when customers and the market keep telling you something is in conflict with your vision, you’d best consider adjusting the vision.”
Problems crop up daily in a new business. Critical-thinking and analytical skills are key to developing solutions and gauging their possible ramifications. Thinking several steps ahead can keep a business on track.
Many of these skills can be learned and sharpened through specialized education at institutions of higher learning. Courses can help refine business skills and prepare entrepreneurs for the tricky business of starting a company in an economy reverberating from the impact of COVID-19.
Uncover Entrepreneurial Education Opportunities
“The best way to learn entrepreneurship is to do entrepreneurship,” says Benedict. “Ohio University’s Online Graduate Business Certificate classes focus on helping students get ready to launch. Our students have told us that the best of the classes, in addition to helpful, engaged faculty, has been their applied nature. You put course concepts to work in the real world the same day you learn them.”
Discover how Ohio University’s Online Graduate Business Certificates can help guide aspiring entrepreneurs in their ventures. Explore concentrations in Business Venturing and Entrepreneurship, Finance, Human Resources Management, Management and Leadership, and beyond.
AlleyWatch, “Great Entrepreneurs Rush to Embrace the Right Risks”
Business.com, “How to Write a Business Plan”
Entrepreneur, “21 Success Tips for Young Entrepreneurs”
Harvard Business Review, “Research: Writing a Business Plan Makes Your Startup More Likely to Succeed”
Inc., “5 Wildly Successful Entrepreneurs Reveal How Risk-taking Propelled Their Careers”
Thrive Global, “The Role of Risk in Entrepreneurship”
Forbes, “New Study Reveals Entrepreneurs Need More Mentoring”