When I started my first business way back in 2002, little did I expect the journey to be this brutal. Here are some lessons I wish I knew when I first started.
#1 Money is important but not enough
A lot of entrepreneurs manage to raise capital early in the game, but money is just not enough. A sound business model that generates consistent cash flows is important. Besides, you need people to implement your systems.
#2 Focus on people and their needs
Business is all about people. You can’t do it all by yourself. Focus on people, understand their needs, compensate them adequately, and invest in their training. They may or may not stay with you, but it’s important to continually train them.
#3 The owner is separate from his business
It’s important to separate yourself from your business, and look at yourself as an employee and shareholder in your business. I’ve seen that many people struggle to differentiate their personal finances from that of their business.
#4 Choose the right business for you
Sometimes, the difference between success and failure can be just choosing the right business for you. There are times when no matter how much you try, things just won’t work out because market conditions are not in your favor.
For example, the airline industry in most countries has a profit margin of less than 2% and most airlines even though they are run by competent people don’t make money.
#5 Maintain a strong work-life balance
I see a lot of entrepreneurs spend 12 to 13 hours a day in their business. And they’ve been doing it for over 10 years. This eventually causes them to burn out and become unproductive. The moment you start working lesser hours, you find ways to streamline your operations and get things done faster. Nowadays, there are a lot of apps that can help you become more productive.
#6 Start Saving Early
I was never really a big spender. However, I rarely bothered to save money early in my life. If you start saving early, you can use your savings to invest in your business. Savings give you options.
#7 Learn to manage debt better or stay out of it
Some entrepreneurs use debt to start a business, this can be very dangerous especially if you are a first time entrepreneur. A start-up is inherently very risky, especially if the business model is untested.
If the business fails, the business owner still needs to pay back debt because most debts are personally guaranteed by the business owner.
Some entrepreneurs use home loans, and personal loans to start a business because interest rates on these type of loans are low. However, be very careful, less optimistic, and make sure your debt is within manageable limits.
#8 Find a good mentor
Having a good mentor is like parental guidance. You want someone to hold you accountable for your actions, and provide guidance through your journey.
But choose your mentor wisely. It should ideally be someone who has a strong track record of success in business, believes in your idea, and is willing to give you honest feedback without worrying about protecting your feelings.