Entrepreneurs' tips from the perspective of a venture capitalist
Entrepreneurs' tips is a keyword often searched in the search engines; that means people maybe want to know about those "secrets" successful entrepreneurs keep for themselves or venture capitalist use to assess businesses. Let me tell you there's no such thing as "secrets" (at least no other than industrial secrets)
As I mention in the About Us and You page, I work in a venture capital firm and that gives me the opportunity to learn new things about business' building everyday. And what I can tell you is that businesses (big, small, online, etc.) always follow the same basic principles (i.e. economic principles) and those who don't, fail.
Now let's review some entrepreneurs' tips which I consider are very important:
1. Whatever you want to do, make a business plan
As I mentioned, economic principles are unavoidable and businesses have many variables that have to be planned carefully. By making a business plan you'll ensure that you're taking account of these variables (market, competitors, team, business' systems, etc. etc.).
Making a business plan is one of the basic entrepreneurs' tips and a constant task because you'll need to update your plan according to what is happening and to ensure your plan is a useful tool to make decisions, and help you to don't
lose sight of the big picture.
We have written a specific article about this subject and contain a complete guide on how to make a business plan, you can read it
2. Use the resources available to you and develop your business as much as possible before to look for financial help or investors
There's a saying in the venture capital industry that entrepreneurs' projects are funded by family, friends and fools (the 3 Fs) at their early stages. Although that is not always the case, there're a lot of resources available to you (information, internet, etc.) that you can use in your idea and of course is far cheaper than what a venture capitalist would ask in return for the risk to invest in your business.
That leads us to the next of our entrepreneurs' tips:
3. Ask yourself: Am I convinced of my business opportunity? Then compare your answer with how much could you risk and what effectively are you putting at risk
Are the responses consistently? If not, forget somebody is going to believe in you or your business. The reason is simple: if you are not convinced to put all your money at risk, why others should?
I'm not saying you should put at risk your child's education fund, what I'm saying is that if you plan your own finances and concludes that you are able to invest $100, then invest them all!
4. Have an elevator speech
Once you have developed your business plan and are truly convinced, you should prepare an elevator speech that is as essential as a business card and one of the most useful entrepreneurs' tips you'll learn. You need to be able to say who you are, what you do, what you are interested in doing and how you can be a resource to your listeners in less in 30 seconds or less.
5. Surround of supportive and positive people
The last you want when you're starting your business is people who are constantly are contaminating you with their negative thoughts and feelings.
This can be a sensitive subject if your spouse is the person who is negative. If this is your case first try to understand that negativism and the reasons behind it. Normally negativism is just another expression of fear. Maybe your spouse feels you're risking too much or that you're going risk your home in your crazy ideas and therefore is negative.
This is another reason why you should plan your finances before to start a business. As always talk with him/er, identify the reasons and act accordingly.
Supportive and positive people apply to your team too. Please note that when I say team I'm not saying employees. At the beginning your resources are limited and you can't pay a full time lawyer or accountant and probably your small business doesn't need a full time professional. That doesn't mean you won't need them from time to time.
6. Learn how to delegate
If you are beginning your business or thinking about it, soon you'll find there are lot of tasks and work to do and that will consume most of your time. Delegation is the clue to have things done without compromising your time.
Of course you'll need (again) your team to support you and the ability to delegate effectively giving specific instructions, working by objectives, setup an easy yet effective review process (i.e. review by interview), etc.
Of all the entrepreneurs' tips, delegation might be effectively learned in a job. For instance if you're a supervisor or are in charge of a few people probably already know how to do it or are in the process.
If you don't have people in charge of you watch how your supervisor or boss delegate tasks and ensure work is done. You can learn a lot if you pay attention to this kind of details which pass inadvertently in the everyday job.
7. Prepare to work with people who are cleverer than you
Should you work with or hire someone who is smarter than you?
Of course! But you should be prepared to work with them and manage them because that is your job as an entrepreneur: manage resources to reach a specific goal.
And when we are talking about people management, they must view you as their leader and not just the one who gives instructions and signs the checks. Therefore leadership is a basic skill entrepreneurs have and one of the least learned entrepreneur's tips.
We talk about this subject in this article too.
8. Learn how to manage your own and your business' cash flow
One of the main causes businesses fail in their early years is because don't have enough money to pay their bills (due to a poor planning or unexpected events) and begin to borrow funds increasing their financial burden and weaken even more their cash flow. In terms of financial planning this is the best of the entrepreneurs' tips because cash flow is the lifeblood of any business.
The same happens to you a person and therefore there's no better opportunity to learn how to manage cash flow than with your own finances. Begin your financial planning now! If you want to learn a little more about this you can begin here.
9. Make your own mistakes and be prepared to fail
Is a good practice to pay attention to common mistakes in order to avoid them but you can't learn everything just watching or learning about others' mistakes; you need to make your own mistakes.
Paradoxically this is one of the entrepreneurs' tips that seem to contradict the success that any entrepreneur is usually looking for, but believe me, you're going to fail and therefore you need to feel and take advantage of that: Ouch! to really learn a lesson, learn how to wake up again, keep your thinking flexible, etc.
10. Be the first mover
Victory goes to the fastest runner, not the one with the best running shoes. Therefore if you have a promising business plan (not a perfect, there's no such thing as a perfect plan) don't delay thinking about the resources you'll need; instead put yourself in action and begin!
You'll find many difficulties and will make many mistakes but they will teach and strength you and you'll be moving forward.
These thoughts about entrepreneurs' tips are based in my own experience and I hope will help you in your journey as entrepreneur.
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