10 Things Every Business Owner Wishes He Knew Before Starting A Business

For most start-up business owners running a business is more like an exploration with no idea about the end result. In most cases, business owners would run into a loss or call it a quit simply because they have no idea about where they are headed to.

Off late, the start-up cosmos has developed several support systems. There are several businesses, financial and legal consultants, investors, and incubators to guide the start-ups. However, not even a decade back, the scenario was completely different.

To begin with, earlier entrepreneurs did not have much access to the resources. Or else, perhaps, they felt that the resources were beyond their means. On top of that, lack of knowledge-sharing platforms made several business owners either struggle all their lives or get misguided and cheated by some imposters. Losses in businesses made other people skeptical to even think of starting a business.

Every entrepreneur needs to be trained before he/ she starts a business. An aspiring entrepreneur should be more educated than a job seeker. There are things to learn that are way beyond the B-School syllabus. And it involves constant learning.

Whenever a successful business owner is asked about that one thing that they wished they knew before starting their business, they would have a very specific answer to that. Hence, here are 10 such points…

1. Business is not all about following your passion always

You might have chosen to start a business instead of looking for a job because you wanted to pursue your passion. However, here is a reality check. Doing what you love to do might be at the core of your business. But there will be more important aspects of running a business. One of them would be to sell your craft.

It is significant that your passion gets aligned with your business objective. That is precisely the reason why some of the best authors in history did not get their ‘due’ in their lifetime. It is only when some publisher found out their work and marketed them to potential readers that such literary work became best sellers. Hence, business is more about the business acumen that helps to ‘sell’ a product or service to people who need it.

2. What is your purpose behind starting a business?

You should be absolutely clear about the purpose behind starting your own business. And that is much bigger than just making money. Your business will flourish only if you can solve problems for others. Your business should be completely geared towards your potential customers. It is more about compassion and empathy that will help you serve your customers and achieve success.

3. Having Knowledge about the Funding Options to Start the Business

Most business owners are not aware of all the funding options before they start their businesses. According to recent market research, 94% of the businesses shut shop within the first year and lack of funding happens to be a potent reason behind it.

It is significant to learn about all the funding options and evaluate their pros and cons before opting for them. There are several ways to get financial aid for businesses at different stages. Here is a legible list of financing options for business start-ups:

• Bootstrapping – Bootstrapping or self-financing is when an entrepreneur funds the business from his/ her own savings or borrows from family, friends, and relatives.

There are several advantages of self-financing that include complete control over business decisions, and limited and easy debt management. However, there will be a limitation of funds, progress could be slow or even stagnating at times, the risk would be bigger, and the absence of investors might also make it difficult to establish the credibility of the business in the market.

Bootstrapped projects require a robust financial management system and complete involvement of the entrepreneur in each aspect of the business. Since the fund is limited, it is important that no extra expenditure is made and each penny that is invested should yield profit.

• Crowdfunding – This process involves pulling funds from people. It involves developing a good network of people through social media engagement and crowdfunding websites. The aspiring entrepreneurs can present their business ideas in front of investors through a platform and get their project funded.
• Angel Investors and Venture Capitalists – You could get you business funded by an angel investor or a venture capitalist who provide financial backing to entrepreneur during the start-up phase of their business. This funding option involves less ordeal as compared to getting a bank loan. You need not repay the money they invest in your business. If your business becomes successful, they benefit from it and if your business fails, they incur a loss. They are ready to take a risk for a promising business idea without much hesitation. They have a network of investors who can fund your project if they find it to be a viable opportunity. The only thing is that since they don’t hesitate to take high risks, they also expect high performance from you and your team.
• Business Incubators and Accelerators – Just like angel investors and venture capitalists, some incubators and accelerators assist businesses in their initial stages. Incubators provide the right kind of environment that helps the new businesses to develop a foundational business model and a minimum viable product (MVP). This provides a good infrastructure, networking facility, and opportunity to work and learn in a shared and monitored environment.

Accelerators help businesses to get up and running. They provide funds, an opportunity to develop a wider business network as well as mentorship to aid a speedy take-off for a new business.

• Win a Contest – Several start-up pitch competitions help aspiring entrepreneurs launch their business ideas. Several such international competitions include Start-up World Cup, Arch Grant Competitions, Global Start-up Competitions, and more.
• Government Aid – Going by the market reports, India can boast to have a robust start-up ecosystem with 108% growth in funding. Startup India Seed Fund Scheme (SISFS) has been approved by Prime Minister, Mr, Narendra Modi. All entrepreneurs who are registered under the Department for Promotion of Industry and Internal Trade (DPIIT) will get support from this scheme. As of now, a total of 42, 813 start-ups have benefitted from this scheme. Similarly, there are several other schemes launched by the Indian government that provides funding to new businesses.

4. Financial Wisdom

Not having enough financial wisdom is another roadblock for several entrepreneurs. Several businesses cannot sustain despite having the best business idea and sufficient funds because they can’t manage their finance properly. A business owner must know how to create an annual budget for the business, how to manage debt, and keep assessing the financial health of the organisation. It is essential to keep the deficit minimised, maintain a contingency fund and keep investing in knowledge and up-skill your workforce. Hence, take some time out from your busy schedule to learn about how to manage business finances or seek help from financial advisors.

5. Business Operations

The way you run or operate your business can make or break your business. Business operations involve all your business processes. Business case studies have proved that labor-intensive and more time-consuming business processes are detrimental to business growth. Several business owners struggle to streamline their business processes. It is significant to learn about the latest technologies and accordingly, upgrade and automate your business operations. It will help to utilise the time and resources most efficiently.

6. Pick the Right People You Hang out With

It is one of the best-kept secrets of all successful people in the world. The company you keep determines your success indicatives. Hence network with people who have already achieved goals that you aspire to achieve.

7. The choice between organic and inorganic growth

There are two types of business growth – organic and inorganic. Organic growth is when the company grows year on year solely through its own performance. And inorganic growth is achieved through mergers and acquisitions. It is a tough choice for business owners to choose between the two. For example, a retail business can expand its presence in newer locations by opening a company-owned store or through franchise or distributorship. The choice between the two largely depends upon the brand value, market demands, and legal parameters of the new location that you are planning to expand to, etc.

8. Asset Light Business Models

Having to spend less on establishing and maintain expansive infrastructure is a great relief. It is something that business owners have woken up to in the recent past.

Most businesses are operating out of co-working spaces and/ or through remote work arrangements. E-commerce has opened up avenues for small businesses who can now just stock the product and sell it through online platforms without having to set up a retail outlet. Business of aggregation has facilitated selling most of the products and services through popular eCommerce platforms.

9. Your Best Friend or Well-wisher will not be your customers

When you share your business idea with your friends and acquaintances, they will encourage you. But when you start your business and approach them to buy your product or service, they will never come forward. Your real customer never comes out of your friends or acquaintances. Your customers are the people who need the product or service that you sell.

10. Hire the right kind of employees

How do you pick your employees? Do you pick them based on their expected CTC? This is where most business owners go wrong. Particularly, when you are starting a business, you should put a lot of emphasis on hiring the right kind of people who would contribute to your business growth. Remember the point where we discussed your purpose behind starting your business? You should approach hiring in the same manner. Does the career objective of the candidate aim at solving any of your business problems? If yes, go ahead with the hiring process, or else steer clear of it.

Discussed above are some vital points that most entrepreneurs regret not knowing before starting their business. Are you an established business owner who regrets not knowing any of these? Or you are an aspiring entrepreneur? Or you are struggling to make your start-up profitable. In each of these situations, I hope, this article gives you some grains of knowledge that add value to the business. Do share your opinion in the comment below.

Also Read:

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2) How to Open a Small Pet Shop?
3) How to Get A First-time Business Loan: The Ultimate Guide
4) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. Where do I get in touch with an angel investor?

Ans. Angel investors operate individually as well as through an investors’ pool. It is not easy to find an angel investor. You require to have a strong business network. You should be present at every trade event, convention, and forum on your line of business, be it online or offline. Be a part of social media groups and online platforms for businesses and interact with every group member. These are the places where you might meet an angel investor.

Q. How do I know when to quit my job to engage full-time in my business?

Ans. Not until you can draw money equivalent to your salary from your business for your personal expenses.

Q. How much of my profit should I reinvest into my business?

Ans. Ideally, you should reinvest your entire profit into your business in the initial phase. However, if you need to take some amount of money out for the repayment of debt or your expense, try to keep a majority of your profit for reinvestment into your business.