Tempted to start your own company? Go for it!
As someone who works in the service industry, I cannot help but notice the gradual, consistent decline in the number of head offices. Large corporations and their head offices are drawn to bigger markets to conform to the reality of globalization. Is this a bad thing? The philosophical would say, "change is neither good nor bad - it is merely inevitable." For sure, change can be difficult, especially for those who pine for the good old days.
With change, however comes opportunity. With the departure of the big corporations, comes opportunity for the little guy. Every time a multinational transfers jobs to greener pastures, talented, experienced, motivated people become free to put their creative talents to work on something new. We are due for a new generation of entrepreneurs to pick up where the last generation left off. Seen from that perspective, change brings with it an interesting sentiment of anticipation.
So are you one of the up-and-comers? Ready to make the leap, but are waiting for the stars to align? As a marketing professional who left corporate life to start my own business, and as president of a branding agency that works with many SME's, I have seen many examples of successful and not-so-successful start-ups over the years. What follows is a brief list of tips to share with those of you who are tempted to take the plunge and start your own business.
Your idea does not have to be perfect to get started.
Launching a company can be like writing a novel. A lot of potential authors will never get published - not because they can't write, but because they don't write. Staring at a blank screen, waiting for inspiration to strike, the perfectionist can always convince himself that even the best idea is not good enough. Like merging onto a highway, however, it is sometimes easier to be already rolling along the service lane than to be stopped at a busy T-junction with your signal flashing. A good idea can always be modified and improved along the way, so sometimes you just have to get started and see where the highway takes you.
Simple ideas executed well.
How many times have you said to yourself, "why didn't I think of that?" Those amazing concepts that take the public by storm and revolutionize the way we live. If you are waiting to be THAT entrepreneur, it may take you a while... The reality is that for every BIG-IDEA start-up, there are literally millions of entrepreneurs launching companies with slightly less fanfare. If you think about it, many of our most successful companies today are simply variations of a similar theme, executed well. St-Hubert is one of Montreal's most successful restaurant chains, but there is nothing unique or original about serving rotisserie chicken. What St-Hubert has done right is to stay true to their core concept and focus on the quality of their product and the efficiency of their delivery.
If in doubt, identify a consumer need.
Of all of the start-ups that I have worked with, the ones that have had the most difficulty at the beginning are those who try too hard to push their product on the consumer. Creative people can become so invested in their "baby" that they ignore the fact that the consumer does not want what they have to offer. Many times, this type of entrepreneur becomes frustrated by the fact that the consumer "doesn't understand" how amazing his product really is. No amount of advertising is going to fix a product that has no demand. Generally speaking, a shopper who shops is looking for a solution to a given problem. If you are looking for inspiration for your business venture, you will have much more success if you begin by identifying a solution to an existing, unresolved problem and go from there.
Don't get caught up in other people's measures of success.
The most critical time in a start-up's life is the beginning. Statistically speaking, most SME's fail in the first 24 months. If you are leaving corporate life to start a new venture, you may have to adjust your concept of success. Many a proud entrepreneur has overspent his limited money on superfluous staff as an example, wanting to look successful too quickly. Nice offices? Maybe next year. The same can be said about corporate benchmarks. Your publicly traded employer may talk a lot about financial measures such as EBITDA, but your bank is really only going to care about your capacity to cover your costs.
Make sure to include a marketing budget.
You may accuse me of preaching for my own parish, but I speak from experience. You'd be surprised how many companies will plan their operating budget down to the last piece of furniture, but will leave out any investment in marketing! (Yes B2B companies, I'm talking to you too...) Advertising and promotion early are key to sales and vital for growth. With apologies to Kevin Costner, "build it and they will come" does not apply in the real world. People will not buy a product if they don't know it exists and distributors will not list a product if they feel that that you are not ready to drive consumers towards their pipeline. A web site is a good start, and social media is a vital way to make information about your product available, but these are both passive tools with limited reach. You still need to set aside funds for the development of an effective SEM plan, some PR initiatives and a creative media/promotional campaign if you're going to succeed.
Focus early and grow from there.
Anyone who's read about American retailer, Target's foray into Canada will recognize the risk of biting off a piece that is too big to chew. After a billion dollar loss, it is looking likely that Target will begin closing some of the 124 stores that they opened in their first year of Canadian expansion. The best way to optimize your efforts and resources is to choose a market that you can handle early and focus your efforts on becoming a success there. You'll know you are ready to move to other markets when you are able to use profit to fund expansion. The best part about this strategy is you are able to promote your success in the original market when you launch elsewhere and create a bandwagon effect. Did you see the Social Network? Then you remember that Facebook originally launched exclusively on campus at Harvard and then expanded from university to university afterward as news of its success spread.
Don't feel like you need to do it all yourself.
In the beginning, most entrepreneurs have to wear many hats. It can be a fun part of the adventure of starting your own company. One day you're on the production line, the next you're at the bank and then you're thinking of a marketing campaign. Of the entrepreneurs I've worked with over the years, the most successful know when to bring in outside expertise. It is easy to get caught up in day-to-day details, but it is impossible to be great at everything. The most successful entrepreneurs are not afraid to hire people more knowledgeable than themselves. What makes them successful is their ability to share their vision for their company and to delegate.
So here we are. I hope that helps. Maybe it is wishful thinking on my part, but I can't help but feel that our society is on the cusp of something great. Maybe it's the potential of the greening economy or the dawning of digital commerce. Perhaps it 's that idea that is going to make the rest of us say, "why didn't I think of that." Whatever your idea may be, I hope you take the leap. We need more entrepreneurs.