Today, everyone wants to be an entrepreneur. The word seems to go hand-in-hand with glorified ideas of lazing around on a beach while all your employees are hard at work in your offices, or earning so much money in a short space of time that you can retire at 30 and never work again. Reality is never so perfect though, and in today’s post, we’ll be covering the top three realities that every entrepreneur should know when starting their own business.
1. Don’t assume you know how to manage people
It could be that you’ve directed a team of people beneath you before which makes you think you’re equipped to take this next step in your working life. Or perhaps you’ve never managed people, but you’ve been so badly managed in the past yourself that you’re sure you can do a much better job. One of the biggest mistakes new entrepreneurs make is thinking they can direct a group of individuals of whose skill-sets they know next-to-nothing about.
If you’ve been a manager in the past, I’ll bet it was of like-minded people lower down the ladder, training to reach your position, and that’s not what you’ll be faced with. People of a variety of backgrounds, ages and experience, from several industries, who have knowledge you don’t. In time, you’ll learn how to work together as a team, but don’t for a moment think you know it all. Just listen, learn and don’t make hasty judgements.
2. Be realistic with budgets
When starting out, you’re bound to be optimistic about the amount of work you’ll receive or clients you’ll bring on board, but if you don’t budget for realistic sales then this could cost you dearly. After factoring in all expenses for equipment, office rent, employees and so on, and then consider the first six months of your business; do you have a contingency fund to dip into for bills over that period if you don’t get the reception you were hoping for?
Can you afford to pay suppliers, manufacturers and so on? Chances are, growth will be a lot slower than you anticipate, so always budget for the worst-case scenario and then anything brought in above that is a cause for celebration.
3. Be frugal with suppliers and services
Speaking of suppliers, it’s vital that you don’t opt for the premium price on the market just because of famous brand names. These days there are hundreds of businesses for every niche, so whether it’s parcel delivery, executive car rentals or where you should be buying office supplies from, don’t pay top-dollar when you don’t have to.
Another good example of this is marketing; rather than waste money printing materials, create e-letters for free to be sent to a distribution list of potential clients, and promote yourself via social media channels that fit your target audience.
You can find some more advice for newbie entrepreneurs here. Or if you have any tips of your own, don’t forget to leave a comment.