Success for a business can be fleeting. A wave of interest and customers can come in, but if the company’s business model or value proposition is not sound, then it’s difficult to maintain the momentum.
Once a business is moving along, most entrepreneurs will also reach a decision point as to when to move on from the company, whether it’s through a sale or simply ceasing operations.
Below are seven core tips for entrepreneurs who are looking to build a company and also some advice for those who need to leave their venture and create another.
Set realistic goals
A positive attitude and confidence in your business’ long-term success are vital. However, when it comes to setting goals you need to inject a dose of realism.
Manage your own expectations so that even if you reach modest success benchmarks, you won’t have any sense of disappointment. Set conservative goals that will allow you to grow slowly. Use market research to gauge the size of your market and set reasonable sales goals.
Doing this legwork on the front end will pay off by helping you see if your plan is flawed and needs tweaking.
You have to stand out
The attributes that make your product or service unique will be your main selling proposition.
Be honest about the true uniqueness and don’t simply trust your biased opinion. You need to be able to market your competitive differentiator, and it needs to matter from the customer’s perspective.
Set the value proposition
If your product’s special traits don’t offer value, then they won’t do you any good. Gather the advice of others to gauge if you are presenting true cost vs. value to customers. The value proposition is a core of the business, and without one it will certainly fail.
Implement and follow a sound business model
Do you have a plan in place for how the company will make money?
You should be revenue-focused right away and closely watch all expenses, especially your initial capital costs and any personnel salaries. Creating a full business plan at the outset will also protect you from overextending yourself or dipping too far into personal finances.
Know when to walk away
Ideally, you will walk away from your business on your own terms. Perhaps you have an offer to sell the company that will enable you to take time off or even retire early! If you think the company has reached its peak and cannot grab more market share, then you should consider selling.
Conversely, if your strategies are simply not panning out, then you need to know when it’s time to pull the plug. Don’t risk personal financial ruin pursuing the business. If you have the entrepreneurial spirit then there is always another venture.
When to begin again
If you walked away from your company and are in good financial shape, then you can explore starting another company. You should first have a reflective period where you look at the things you did right and wrong with your other business. Try to spot consistent issues.
Perhaps you overestimated the costs of production or the expenses incurred due to staffing? Don’t be afraid to take some classes to broaden your knowledge base. Once you have learned some lessons and adjusted your strategy, then you can dive into your next company with the right focus.
Find a niche
You not only need a product or service with unique traits, but you also need to identify a good niche within a decent-sized market. What’s a good example of a big market? Consider the hotel lodging business. It’s $500 billion. Think of any percentage of that sum and you have a hefty dollar amount.
Bob Diener is a pioneer in the hotel consolidation and online travel industry with more than 25 years of experience. Diener is the president and co-founder of www.getaroom.com and is co-founder of the Hotel Reservations Network, now known as Hotels.com.