Every once in a while an entrepreneur will ask me, “What is the most important thing I need to know?”. My stock answer is always the same. “Your rich uncle’s phone number.” Yes, I know, I’m the Chris Rock of the business world (insert crowd laughter).
Over the years, I’ve assembled a bit of a list of “The Most Important Things” you need to know to succeed with your business. The entire Wikipedia of my learning (usually the hard way at that). Here goes:
- Business Plan. This is boring, I know. But it’s essential to take the time to write one. My first one took me about 3 months. I used a software template. http://www.amazon.ca/Palo-Alto-Software-Inc-PA-339/dp/B001BZ99XM
and this worked great because every page of it spawned a new question that I hadn’t really thought about in the context of my business. The Plan gets ideas out of your head. It lets you share your vision with the rest of your team. Investors will want demand to see it. Write it yourself.
- At the Henry Bernick Entrepreneurship Centre we see about 300 entrepreneurs each year. There are always a few who are, unfortunately, broke. They may have lost their job and decide that starting a business is the way out. This is not the time to start a business. It costs money to do a start-up. Many entrepreneurs think that the government will fund their start-up. Not so. Government funding can help with certain aspects (usually the R&D), but they won’t pay for your equipment, rent and other assets. Banks are not in the risk business. They loan money against some hard assets that you are willing to put up…like your house. They don’t lend unsecured money to a business with no revenue. Set a limit as to how much of your own money you can put into a business. Once it’s gone, you should re-evaluate your plan. (Try this tool from TD Bank. http://www.tdbank.com/small_business/workshops/CashBudget/main.htm).
- Cash Flow is the lifeblood of your company. If you are a non-financial manager, find someone who can teach you about cash flow (The MaRS Discovery District has great online advice and tutorials…http://www.marsdd.com/entrepreneurs-toolkit/articles/cash-flow-how-money-enters-and-leaves-a-company) and how to recognize when your company needs more cash (loan or investment). Projecting your cash flow as a start up will tell you how much money you will need to get your company to profitability, and when you will need it.
- Find a first customer. You can do this early in your planning stages. Talking to a potential First Customer can help you see what is important to them. It teaches you how to serve them. It focuses your business…FAST. A customer forces you to complete all the parts of your business. You need to figure out customer service, accounting, legal, and distribution in order to write and ship that first order. Oh, and by the way, the best way to finance your start up is through revenue from sales. A customer is the key trigger for investors.
- Find a critic. No, I don’t mean your spouse. I mean someone who’s been there. Successfully. Someone who is independent. A good critic (a.k.a. Mentor) will network you to partners, help you avoid the potholes and tell you when to quit or not to quit.
- Don’t do it alone. Build a team. Add the expertise you don’t bring to the party. Find Strategic Partners who might be customers, suppliers, or distributors. Somebody with interests that parallel yours. Lastly, a financial partner is the best partner to bring along for the ride.
So there you have it. The contents of the best seller I was going to write…all in one page. There are loads of tips to be shared of course, please post them below.