While starting and running a business is one of the most rewarding and economically productive things you can do, entrepreneurship is far from easy. As Small Biz Trends reported, a little over half of small businesses fail within the first four years, with “incompetence” being the top reason for failure.
We’re not saying this to discourage you. At CUE, we’re huge advocates of small businesses, but we’re upfront about the challenges of entrepreneurship because we want you to be prepared.
In line with that, we decided to ask seasoned business owners and experts about what new entrepreneurs should know when starting a venture in 2019. Have a look at what they said.
Get clear on your purpose and don’t romanticize entrepreneurship
The first thing you should do as a new or aspiring entrepreneur is to identify the main things driving you to be in business. As Retail Strategist Carl Boutet says, entrepreneurs should first and foremose do a “gut check.”
“What are your primary motivations for wanting to start your own business? Hopefully, it’s centered around solving a real problem that you can support,” he says.
Also, don’t fall for aspirational messages that glorify entrepreneurship too much. “I think there’s too much admiration of the startup lifestyle and being ‘your own boss’. Reality is, each client (and the people that work for that client) will all become your bosses,” he explains.
Boutet also emphasizes the importance of getting unconditional support from your loved ones. “The stresses of entrepreneurship are bound to involve them at some point and you’ll need their support.”
Conduct a SWOT analysis
A SWOT analysis is an exercise in which you identify your strengths, weaknesses, opportunities, and threats. The first two components pertain to internal advantages and disadvantages. Strengths may include your talents and abilities, while your weaknesses would usually include skills that you lack or things your competitors are better at.
Opportunities and threats, on the other hand, are the external factors affecting your company. They include any market, political, and technology trends that could have a positive or negative impact on your operations and bottom line.
When done right, a SWOT analysis can give you clarity around what you have going for you, as well as the things you need to work on. It can also help you figure out which tasks to focus on, what to outsource, which threats to prepare for, etc.
For best results, conduct your analysis with a trusted business partner or consultant who can bring up things that fall into your blind spots (we all have them).
Also, note that you don’t have to start a SWOT analysis from scratch. A quick Google search will point you to several SWOT templates, including this one from Entrepreneur Media, which even contains guide questions and examples.
Stay on top of administrative tasks
You can be the best at what you do (e.g., selling, creating a product, or providing a service), and still fail. Running a successful business requires more than just talent or skills. Equally important are “administrative stuff,” such as bookkeeping, accounting, payroll, taxes, and government filings.
“If you’re not strong in this element, then hire someone who is (sooner than later),” advises Boutet. “Cash flow mismanagement is often the downfall of a business more than lack of profit.”
How do you find the right professionals? Start with your network. If you know people running successful businesses, ask them who’s looking after their books, doing their taxes, and watching their back from a legal perspective. (Side note: There are services such as BizFilings and LegalZoom that can help get your legal ducks in a row, so you may want to look into these solutions if you’re setting up your business.)
Choosing the right software is another key task, particularly when it comes to business financials. Make sure you have the right bookkeeping and accounting software right from the get-go, so you can minimize headaches when tax season rolls along.
Speaking of which, established accounting solutions such as Quickbooks and Xero have networks of certified financial experts, so if you’re having trouble looking for an accountant or bookkeeper, try tapping into your software’s network of finance pros.
Identify and market to your key personas
Got your business all set up? Great. Now it’s time to spread the word and get in front of potential customers. In other words, it’s time to market your products or services.
Now, marketing is an extremely broad topic so we won’t get into too much detail in this article. But if there’s one lesson every new entrepreneur should know, it’s the fact that there’s more to marketing than Instagram posts, SEO, and list-building.
At its core, marketing is about truly knowing your target audience and engaging them in the most relevant way.
“I would say anyone looking to go into business should definitely try to understand marketing or its very concept,” says Joelle Lynn, CEO at BW Franchising System, LLC. “I’m finding that a lot of people are starting businesses and figure they’ll just post (or spam) on Instagram and the clients will come. Social media should be used just as one of the many tools in a marketing toolkit, as the entrepreneur finds what works best for their business and become clear as to the audience they serve.”
So, before diving into marketing tools and tactics, take a deep dive into your audience. Do your research. Collect demographic information and find recent data around where they live, how much they earn, what they like or dislike, etc.
You should also strive to get into your customers’ heads by figuring out that exact words or phrases they use to describe their needs, aspirations, and pain points. To accomplish to consider taking the following steps:
Join social media groups – If you haven’t done so yet, find the Facebook or LinkedIn groups that your target customers are most likely to join and explore the conversions happening within these communities.
The popularity of such groups can be a goldmine for anyone doing market research. Members are happy to ask and answer questions and share their experiences, so you’re bound to come across important words or phrases that you can use in your marketing.
Check Reddit – There’s a subreddit for just about anything these days, and just like with Facebook and LinkedIn groups, these communities are filled with people asking questions, sharing stories, and expressing concerns. So, find a subreddit relevant to your product or service and take note of what people are talking about.
Read Amazon reviews – Amazon product reviews contain nuggets of information you can use to improve your own products or services. If you’re selling merchandise, find similar items on Amazon and see what people are saying. Providing a service? Search for books around the service that you’re selling and go from there.
Pay attention to legislation that may affect your business
Business laws vary depending on your state and industry, so it’s always best to consult with a professional when it comes to legislation affecting your business.
That said, below are some legislative news and issues that made waves in 2018 and will continue generating interest in the coming months:
Rising minimum wage – The Boston Herald reports that 17 states will be raising their minimum wages in 2019, and other states are bound to do the same thing. If you’re planning to hire employees, be sure to check employment laws and wage information in your state to ensure that your business stays compliant.
Higher mileage rates – The Herald also reports that the IRS has increased its standard mileage rate for deducting the costs of using a car for business purposes. The new 2019 rate will be 5.8 cents per mile, up from 3.5 cents in 2018. It’s also important to note that under the new taxation law, employees are can’t claim deductions for the use of their own vehicles on behalf of their companies.
New sexual harassment legislation – The rise of the #MeToo movement has paved the way for new sexual misconduct laws. As the National Conference of Sate Legislatures puts it, “2018 has brought an unprecedented amount of legislation on sexual harassment and sexual harassment policies,” with more than 125 pieces of legislation introduced in 32 states.
Again, since laws will vary from one state to the next, it’s best to check which law are enacted in your area.
Ready to start your entrepreneurial journey?
Starting a business is no walk in the park, but if you take it seriously, you’ll learn valuable lessons and achieve tremendous professional and personal growth along the way.
And if you need assistance at any stage, know that there are professionals, communities, and solutions out there that can help. Most businesses start by finding the right software.
Not sure where to start? or get in touch — we’d love to assist you.