1. You
– this is the most important of all the concepts, you need to know and
understand yourself, most people struggle with this one because people assume
that they pretty much know themselves! Who knows you better than yourself
right?! Wrong, if you do not know and understand yourself, you are bound to
make elementary mistakes that will cost you dearly! You need to know what your
strengths and weaknesses are, for instance; do you have the will and ability to
do what needs to be done for your venture to succeed? Do not be mesmerised by
the idea of having a business if you know full well that you are not prepared
to put in the overtime for your business to succeed. If you are not willing to
grind until success knows you by name then starting a business is not for you,
you can have the greatest of ideas but if you are not going to work that idea
then that idea is as good as the rest that will never see the light of day!
2. Understand
your customers - understand who your idea is going to serve – your idea
should aim to solve a problem that already exists. Do not first come up with an
idea then go to look for the problem that your idea is supposed to solve?! Your business
will thrive and succeed because people will want the product or services you
are going to offer and these need to be for the people. These products and
services need to address an issue that people are struggling with, do not
create a solution for something that you think is a problem because by the time
you find out that you are wrong, it will be too late, you would have spent time
and probably money on something that you will never recoup a cent from!
Understand the people that you want your product or service to serve.
3. Understand
your competitors – knowing and understanding your competition is vital in any
contest, knowing what these people are doing and how they are impacting and
affecting the market space you want to get involved in is critically important
for the survival of your business. You will have big corporations that are just going to be nasty and will want to drive you out of business by running campaigns
specifically designed to ruin your business. If you know and understand such
competitors then you can better prepare for such periods so you can still come
out alive and thriving even better than before but if you do not know and
understand your competitors, you will not recognise when they start coming
after you and therefore you will not see them coming for you. In the business
world companies are always trying to outdo one another which is understandable,
they are all competing for the same customers with products and services that are
not very different in their function, naturally they do need to outdo each other
if they are to survive and thrive. The last part of knowing and understanding
your competition is largely influenced by making sure that you always stay
ahead of them, do not get too comfortable, always stay in the game and
innovate, you do not want to become like that famous cellphone company Nokia.
Nokia had a very large chunk of the cellphone market share while the likes of
Samsung and Apple were lagging behind but Nokia got too comfortable and forgot
to innovate, so when the generation of smartphones hit them, it hit them hard, they did not know
how to respond and today they are not even in the top 5 of smartphone vendors
by market share. If you do not know and understand your competitors together
with your customers you will lose ground and many a times you will be forced to
shut close your doors.
4. Be
passionate – whatever your business idea is, ensure that you are passionate
about it and it does drive you to succeed. A lot of the times you will hear
people say that its their habits that drive them to succeed but that is not
entirely true, it is the passion to wake up and do what they do that drives
them, which in turn becomes a habit. You will never develop a habit for
anything if you do not have anything that drives you to perform that particular
habit. It sounds confusing, I know but it is not, think of it this way: if you
enjoy reading early in the morning before everyone wakes up and you actually
wake up early to read, what drives you to wake up and read? Is it the habit of
waking up early or the passion to read early in the morning? If you have no
interest in what you do, you will easily lose focus and therefore will not be
productive which is a recipe for many failed business ventures! You need to be
passionate about your business idea and do not confuse being passionate about
your business idea with the passion that you have for doing what you love. What
you love, do not necessarily have to make you a profit but a business does! I
have heard a lot of people say do what you love which is fair and everything
but if that which you love will not make you any profits for you to live then
that should be classified as a hobby not a business. Remember you get in
business to make money.
5. Cash flow knowledge – many of us are not
accountants nor did we do any accounting studies in school or in life, that is
fine but it is no excuse for not understanding how your business cash flow will
look like once the business is running. Most people have dealt with cash flow
in their lives just not at the scale of running a business, but they have dealt
with cash flow, I mean things like budgeting at home, working out how much you
need to save for that car, house or whatever you wanted to buy but could not
afford right away. If you have ever done any kind of balancing your finances, congratulations you already understand a portion of cash flow. Cash flow
in layman terms is the understanding of what you need to spend for your
business to run so it can generate an income which you will most likely recycle
back into the business. For the accountants and the accounting inclined,
Investopedia defines cash flow as: the net amount of cash and cash-equivalents moving
into and out of a business. To successfully run your business you need to
know how much money you will be spending in comparison to how much money you
expect to make. Above I said you get into business to make money, so if you
are spending more than you are making then you do not have a business but
rather you are bleeding money, you have a very expensive hobby! Successfully
ran business have a clear understanding of direct and indirect costs
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