The following post comes to us from internet entrepreneur, Jock Purtle, who is founder of Digital Exits, a company specializing in the buying/selling and appraisal of online businesses. This article is based upon his entrepreneurial experience.
For many, the hardest decision you will make as an entrepreneur is the first one: the decision to go out on your own. In today’s fiercely competitive marketplace, the idea of running a business can be intimidating, to say the least. But once you get over this hurdle and realize fear and hesitation are the only things standing in the way of you accomplishing your goals, you’re well on your way to entrepreneurial success.
As you likely already know, though, it’s not that simple. Getting started with your own company is like riding a roller coaster in the dark. Each up and down is intense, and it’s hard to know what’s coming next.
To try and make things a little easier, we’ve come up with a list of five decisions that every entrepreneur needs to make early on in the life of their company. By highlighting these, we hope you’ll be able to focus in a little more on what you need to be doing to make your company work so that you can weather the storm as it comes your way, worry a bit less and take one more step towards success.
The decision making will never end, and it will soon turn into your most critical task, but here are some key choices you’ll need to make right off the bat to set your company up for a healthy future.
1. Your ideal customers
You’d be surprised how many entrepreneurs don’t take the time to clearly define their target audience. Often times, entrepreneurs are so excited about their idea that they don’t stop to think who might want to spend money on it. A good idea is a good idea, and there is likely a business to be built around it, but without clearly defining your target audience, the initial stages of your business will be a real challenge.
The important thing to remember when going through this process is to be as specific as possible. It’s not enough to just say you are hoping to target urban Millennials. Instead, put yourself in the shoes of your ideal customer and ask yourself how your product or service might factor into their life. What need are you fulfilling? Or, how are you making their life better or more comfortable?
By answering these questions, you will have a more specific idea as to who you need to be going after and how you are going to reach them. For example, you may find that your audience is men between the ages of 20-35 who live in cities, earn above-average salaries and have an active lifestyle. This is vital information, as it will help determine your marketing and advertising strategies going forward.
Furthermore, once you make this decision, a lot of other decisions will become easier. All you need to do is ask yourself: Is this going to help me reach my target audience? If the answer is yes, proceed. If no, then keep working. Taking the time to be very clear about this part of the business right from the beginning is an essential step to ensuring the success of the company.
2. Management style and company culture
While you as the entrepreneur may be the brains behind the operation, you’re fooling yourself if you think you can pull this off on your own. You are going to need to bring in a good team to help you get off the ground, and then once you do, you are going to need a growth plan. What types of employees are you looking for? Which ones are you trying to avoid?
A big part of this is also your management style. Are you going to run things more top-down? Or do you plan to be more decentralized, delegating certain decisions to those more qualified to make them?
You’ll also want to take a look at yourself as a leader and manager and figure out how to improve. There are plenty of things we do without realizing that affect how employees view us and act towards us, and you really won’t see this until you are in a position of leadership.
Take some time to figure out what you want your company culture to be. You may think of culture as something that develops organically, and to a certain extent it is, but you can have a significant impact on the direction it goes. A lot of companies are adopting a more laid-back approach, offering their employees more and more benefits, such as unlimited vacation time and free coffee of the month subscriptions, as a way of trying to foster engagement and buy-in. This may or may not be the right approach for you, and this is something you’ll want to figure out as soon as possible.
All of these things should be figured out in the beginning because as you grow it will be harder and harder to make time for this type of planning. Spend some time as you are getting started and you’ll find yourself managing growth much better, setting your company up for success in the future.
3. Exit strategy
When first starting out with a company, the idea of an exit strategy seems far away. But it’s actually very important to consider. Planning out your exit strategy means thinking long-term. It allows you to align resources so that you can move forward at the right time.
An exit strategy can come in the form of an initial public offering (IPO), a sale or a merger, but the thing to remember is that you don’t actually need to implement the strategy. If things are going well, you have every freedom to stay with the business. But plotting out from the beginning how you might exit gets you thinking big picture and this can only help your business.
Plus, having a clearly defined exit strategy plays very well with investors. They want to know how they are going to get their money, and demonstrating to them how this will happen increases your chances of securing the resources you need to get your company off the ground and heading towards prosperity.
4. Marketing and branding
It’s never too early to start thinking about branding. In today’s competitive marketplace, having a strong brand is going to be what ultimately sets you apart. Much like the decisions you’ll make about company culture, choosing your branding strategy needs to be one of the first things you do.
Figure out what makes you unique, determine what you want to stand for and do some research to figure out the best way to communicate this to people. Social media is huge for building your brand, and if your target audience uses this medium, you may want to consider hiring an agency or consultant to help you.
In fact, this may be one of the best decisions you make as an entrepreneur. Successful marketing requires a full-time approach, and too many small companies try to do it on their own, only to end up wasting their precious resources without seeing results. It’s your job to do the high-level strategic thinking. Then, bring in some experts to help you execute your plan.
Here’s one not too many entrepreneurs think about, and it’s a real shame that they don’t. Cybercrime and hacking is the threat of the future, and small businesses are being increasingly targeted. They’re easier to get to, as they don’t always invest in the right protection, but they still possess valuable information. And the damage a hack causes to your reputation is often far too much for any small company to overcome.
Figure out how you’re at risk and what you need to do to protect yourself. Cybersecurity infrastructures can be expensive, and the last thing you want to do is to have to shut down your website or other services so that you can install new security measures. Don’t let cybersecurity become an afterthought. You’ll pay for it down the road.
From the moment you decided to become an entrepreneur, you essentially converted yourself into a full-time decision maker. As the business grows, you will be faced with increasingly challenging choices, but with experience, you’ll learn what’s best for your business. However, until you reach this point, things can be a bit stressful. Consider these critical decisions every entrepreneur needs to make so that you can start your business heading in the right direction.
Join in the conversation! Among these five decisions an entrepreneur must make, which one do you feel is the most critical?
About the author: Founder of Digital Exits, Jock Purtle is an internet entrepreneur who specializes in the buying/selling and appraisal of online businesses. He began investing in websites as a hobby when he was a teenager, but it slowly turned into his full-time job. He works with other entrepreneurs frequently and enjoys sharing his knowledge to help others find similar success working for themselves.