Starting your own business is often the project of a lifetime.
It’s always an ambitious goal, and a risk to consider carefully, and that should not be taken lightly.
For years, in France or in Vietnam, LesMichels have seen, met, and worked with entrepreneurs from all horizons, all in extremely varied activity sectors: catering, hotels, IT, import/export, entertainment, services, etc … and whatever the sector, we meet the same stories of failure, and the same stories of success.
So would there be a miracle recipe for starting a business?
Yes! Your attitude, your preparation, and your determination will make all the difference.
Because having an idea is the simple part of the equation. Putting it in place and making it work is where the real entrepreneurial challenge lies.
So being a good entrepreneur is above all about being ready, in all circumstances, and having an ability to adapt and solve problems, which is above average.
This means above all to work, and anticipate.
So, in order to put you on the right track, Les Michels offers you their best advice for carrying out your project.
Tip #1: Know your market
This is probably the grossest mistake an entrepreneur can make and a practice that is unfortunately commonplace, especially in Vietnam, where the turnover of shops is simply impressive.
In Saigon, it is not uncommon to see a shop close only a few months or even a few weeks after opening. As we will see below, these failures are often due to a lack of preparation (skills not assembled, or insufficient funds to last the first months). But one of the main factors in the success of a business seems to be knowing your market and its potential before launching your business.
Don’t make the mistake of starting your own business without doing full market research.
Too often, project leaders rush headlong, thinking that their idea is the best in the world and that it will be a hit, without even having considered :
- The competition: Has anyone had the same idea as me? Who are they? How many are they? Where are they located? What are their products or services? Where and how do they succeed? How long did it take them to get there? What is their market share?
- Their products or services: What are their value proposition? Are they durable enough? Will they solve a real need? Do they comply with legal standards and the uses made of them by the consumer? Have they been tested properly? What to do in case of a defect? At what price to sell them?
- Their clients: Who are they? What are their consumption habits? Their budgets? Where and how to speak to them and find them?
All of these questions and a plethora of others will help you provide concrete answers about the relevance, feasibility, and sustainability of your project in the market.
Put yourself and your ideas and products/services systematically into question, to have the best approach on your market. Learn from the mistakes of others and assess the risks to avoid the consequences.
Tip #2: Bring something concrete
“You gotta spend money to make money”.
In business, everything is a logic of investment and risk.
No business operates without financial means. If you are a project leader, people will expect you to be a significant financial contributor, if not the main financial contributor.
If you don’t take financial risks or bring any production that is tangible and has market value, you won’t be taken seriously.
As a reminder, when setting up a business, 3 types of contributions are assessed:
- Contribution in expertise: either your skills or your profession, which can be assessed at the market level.
- Cash contribution: a sum of money.
- Contribution in kind: either tangible (property, means of production, etc.) or intangible (patents).
There is no input in “idea” or “concept”. Forget it and focus on bringing something concrete.
If you need to work overtime in your current job or save money to make enough money for your project, do it. It is much easier to ensure this upstream in the pre-project phase than when you get started.
Keep enough money aside to start your business in the best conditions by settling everything that needs to be settled (see tip # 3), but also keep enough to live on during the period you build, launch, and test your project.
Keep in mind that you will probably not reach breakeven for 1, 2, or 3 years, and use this basis for your estimates.
Also, be careful not to make your budget based on minimum costs (salaries, services, products), because to operate at the least cost is to favor the short term over the long term. So it’s automatically signing a death warrant for your business before it’s even started.
Finally, always keep a risk margin in case of unforeseen events (for example + 10% of your total budget). A broken machine, a car breakdown, or an unexpected delay in payment are all extremely likely events that must be taken into account in order not to find yourself helpless when they happen.
Tip # 3: Become aware of the complexity of a company
For an entrepreneurial project to succeed, even on a small scale, several extremely varied skills will have to be gathered:
- marketing and communication
All that?? Yes. All that, all the time, and more and more as your project grows.
See each of these aspects as the building blocks of a house of cards. If only one is missing, be sure the building will not last long:
- Your project is very profitable, but your customer or partner contracts are poorly designed.
- You have the best marketing in the world, but your products or services are of unequal quality?
- You are great with numbers, but your collaborators or employees leave you one by one because you neglect them or do not know how to speak or motivate them.
In these cases, your business may eventually run into serious difficulties.
This is why before starting your project, make sure you have a concrete plan and be able to respond concretely to the issues that may arise in each department of your business.
- Is my activity legal? What are the steps to take with the administrations to launch my business following the rules?
- What are my investment needs going to be? How long can my business run if I have no customers for X months?
- Do my products meet all standards? Have they been properly tested to fully satisfy the consumer?
This often involves the creation of a financing plan, a business plan, a marketing plan, and the advice of professionals: lawyers, accountants, consultants, engineers, etc.
Tip #4: Be realistic about your abilities (and those of others)
One of the main problems encountered in forming a business, and which is directly linked to the previous point, is that too often entrepreneurs believe that they can perform jobs or functions for which they have never been prepared.
Do you think you can do it all by yourself? Make your contracts? Create your website? Deliver your products? Provide customer service? Make your tax statements.
You suffer from what is called the Dunning-Kruger effect, or the overconfidence effect.
You think, “It’s not rocket science to do X or Y”. Think again! In 90% of cases, it is difficult. Especially if you have to multitask and do all jobs within your business! That’s why X or Y are jobs in their own right, with training, specific skills … and salary scales.
Our first piece of advice on this subject is therefore the following: never underestimate the value or the complexity of a skill that you do not master yourself.
Our second piece of advice on the subject: Always focus on what you can do best, and for everything else, surround yourself and delegate.
Tip #5: Be considerate of others
As we saw in the previous two points, a business is never built and developed alone.
However, for many people, starting a business is above all synonymous with freedom and independence. If of course by being your own boss, you will be able to enjoy certain advantages as regards your timetable, for example, you will however always be dependent on your: customers/suppliers/collaborators and partners.
Consequently, you must prepare to maintain healthy and respectful relationships with each of these interlocutors, which means in particular:
- Respect their opinion:
You must remain open to different points of view, whether positive or negative, right or wrong. Because even if all points of view are not equal, in fact, they exist, and you must therefore take them into account. As best as possible, and even if you want to stay true to your vision, take care of the sensitivity of people bringing a divergent point of view. Future prospects, customers, or partners will no doubt share a point of view similar to what you have already met. See how you can use it better, to fix past mistakes, for example.
- Respect their time:
No one likes time wasters and those who constantly talk. Get straight to the point with your contact. Let him know why you are there, and what is his interest in being in touch with you. Above all, have the means to be reactive towards him. No one will be interested in talking with you about a business project on which you have no near and clear visibility in terms of deadlines. If you are not ready, you will be identified as such, and your contact will not forgive you for wasting his time. Also, be aware that what you are passionate about does not necessarily fascinate others.
- Respect their job and the value of their job:
Freelancers or agencies don’t underpay people, and pay them on time. Because as the saying goes: “If you pay for peanuts, you will work with monkeys. ”
If you cannot afford to hire said skill, don’t do it, or give yourself the means. Do not put a person in a difficult or weak position, because sooner or later it will backfire.
- Forgive mistakes:
We cannot stress this enough: we all make mistakes. Whether it is yourself, your customers, your suppliers, or your partners, you will face errors.
These are normal and useful for the progress of your project. Try to play them down. By learning to resolve these errors, you will become more capable yourself.
Likewise, by showing understanding towards the person who committed the fault (or yourself), you will show your humanity, and you will make others want to improve and make your project grow to the best of their abilities.
Be careful, however: There are obviously unforgivable faults or,, if they are too repeated, deserve sanction. So, don’t be afraid to separate yourself from a customer, supplier, or employee, even if you have developed emotional ties, if you conclude that their impact is too negative on your business.
Again, you will understand, setting up a project or a business, however modest, is not an easy task. Daily, your responsibilities, your creativity, and your attitude will be put to the test to be able to respond to all the unknowns surrounding your project.
But there’s nothing insurmountable about that. By preparing and requesting the necessary help, you will give your project every chance!
Do you want to know more about starting a business?
LesMichels offer business consulting interviews to discuss your project and advise you.
Together, we determine what are the difficulties to solve, in what order to proceed, and we will give you our best advice to succeed. Contact us now!