After establishing my first company and closing it down after one year, I did not give up, but built two new companies based on some crucial lessons I’d like to share so as to empower fresh entrepreneurs for making their venture a real success. Here are the rest of those lessons.
Market research that works. There is only one type of market research that really works: Take your product or service to the market, present it to clients as early as possible, adapt it if necessary, and learn fast. Any further market research is useless and costs you precious time and money.
Stay independent. You are founding your own company for having fun, doing work you really love, and enjoying your life as a self-bosser. Avoid raising additional funds with investors or banks as long as possible. As soon as you become dependent on them it might become very difficult to remain true to yourself. Why should you establish a venture created from your heart’s desires if you are then forced to agree on terms and conditions clashing with your personal values and principles? Many big companies started small, grew tremendously, raised further equity, and even went for an IPO. However, most of their founders lost their independence and were not able to live up to their visions anymore.
Focus on one single product or service. Your biggest problem will be that you have too many product ideas. Your success and true calling lies where talent meets market demand. Clarify first what you really want to offer: what is my USP in this specific field? What market segments might benefit from my products or services? Have I understood the client’s needs? Furthermore, do not think you might start or run a business in parallel to any other jobs so as to minimize your financial risk or accumulate some additional cash. You will run out of time and energy. You will only become successful if you wholeheartedly dedicate all your energy and passion to one single product or service.
Strategy: the value of knowing your clients. Do not waste too much time on outlining a detailed strategy or business plan. Strategies often serve as a means of hiding your fears and doubts behind wrong assumptions, figures, and a lot of paper. Taking action is the best strategy. The only key element you should really consider when it comes to crafting a strategy is to perform a so-called “customer perceived value analysis,” which is usually unknown to most executives. It is one of the most powerful tools I have ever seen and allows you to answer some crucial questions such as: What are the key buying criteria of my clients? How well do I meet them? How do we perform against our competitors? What should our USP be? Does our segmentation really work? Furthermore, regulations and laws are big barriers nowadays. Enter a business field that allows you to avoid such hassles.
Know your value. Too many people undervalue their work or do not know what they should really charge. The main reasons for this are normally a lack of self-confidence and the wrong belief that you can undercut the competition by lowering prices. However, you beat your competition only by offering the highest customer perceived value imaginable. Furthermore, many clients do not value your work properly when it is priced too low. So, be prepared for the following questions: What is my hourly, weekly, or monthly rate? Do I grant any discounts for long-term assignments? What additional value can I offer (freebies)? What personal or product qualities justify my target price?
Know what you do not want. At the beginning, we all strive for quick success and some decent revenue generation. Therefore, we are often inclined to compromise too often. Listen to your heart and ask yourself whether you really like an assignment. Do your values and principles coincide with those of your clients? Some clients might seem to be attractive at first glance but turn out to be high-cost and maintenance clients at a later stage. Never forget that once you have committed, you do not leave any room for even better opportunities.
Get out of the self-employment mood. As long as you are selling your time, you are self-employed, which does not leave a lot of time to develop and grow your business. If you sell a product, you are in a much better position to dedicate your time to other activities, such as business development or networking, and it leaves time to enjoy your business. Even those who work in typical service industries such as coaching, training, or motivational speaking can leave the self-employment mode by developing scalable products such as books, webinars, or other products they can sell online.
Learn your lessons. Failure does not mean defeat. Even if you fail with your first venture you have proven that you are willing to take some risk and you gained a lot of experience for your work and life.
Andreas Dudàs. Swiss, visionary entrepreneur, mentor, motivational speaker, and expert on authentic leadership. More than 20 years experience in top executive positions in over 25 countries. Founder of the BE SHiRO Group in Switzerland and India, dedicated to empower individuals and organizations to achieve greatness through authenticity. Author of “Do you dare to be yourself? Developing power in life and leadership through authenticity." Learn more about Andreas at www.andreasdudas.com/book.
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