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What must an entrepreneur assume when starting a business (and not assume)

What must an entrepreneur assume when starting a business

What must an entrepreneur assume when starting a business or not assume (in case you’re – which you might just be)?

Well, my friend, the thing is –

Starting a business is hard. You need to be willing to take risks, make calculated decisions, and you will need to work hard every day. 

In fact, many people have achieved great success by starting their own businesses.

But, what must an entrepreneur assume when starting a business? Let’s explore what must be assumed when starting a business (and, things not to be assumed).

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Section 1: Thinking of starting out your own business?

In this image a man is reading business newspaper

Here are some DO assumes and DON’T assume when starting a business.

DON’T assume you have a good idea –

It’s very important to have a good idea for your business that isn’t in direct competition with big players in the market. If you’re up against big businesses that have more resources, it’ll be very difficult to succeed.

Similarly, your product shouldn’t be such that does not solve any issue whatsoever. That means, it has no market and buyers.

You need to find a niche market or come up with a unique product or service that’ll make your business stand out from the rest.

Keep in mind:

  • You should have an idea that solves a problem and is not already existing in the market (even if its a really small item or service)
  • If possible, you should have intellectual property on it which can be licensed to the big players in the market OR to put a stop on anyone else using it.

DO assume a lot of work goes into defining and understanding target audience

As the business owner, you need to consider who your target audience is and learn more about them. This will help you make changes to the products or services that they want.

If you know exactly what they want, it’ll be easier for you to market and sell them.

One way you can do this is by extensively carrying out a survey of your desired audience.

DON’T assume your cash flow does not need attention:

There are two sections to it:

  • Cash flow for yourself to live: This is the cash you need to survive each month.
  • Cash flow for your business: This is the extra cash you’ll need to invest in your business, marketing, and development or even to keep it afloat.

Cash flow for yourself to live:

If you’re working on your business full time, this means you should have at least 3-6 months of savings.

If you’re working on your business part-time while also having a ‘day job’ then you should have at least 12-18 months of cash in the bank because it’s going to be harder for you to generate a significant income from a new idea (without having to spend most of your time on it).

This means if you don’t have any business revenue coming in, you should be able to pay rent, bills, food, etc with the money you put away to cover your expenses.

Cash flow for your business:

You need to work out how much you’d like to generate in the first month and multiply it by 12 to get an idea of what your cash requirements will be.

So if you want to make $100,000 a year from your business, you should have at least $1 million – that’s 12 months’ worth of cash converted into the currency you’ll need.

Some big players in the market will invest millions before they start out with their business, so make sure you have enough cash to fund your business for at least 2 years.

You don’t need to worry if you don’t yet have that kind of cash. You can always look into angel investors, shark tank, loans or equity partnerships for cash.

DO assume that a business takes culmination of different skills brought by different people in your organisation:

It’s very important to know how and who will fit into your organization.

You need to have a team of people within your business that all bring something different to the table so you can be productive, work efficiently and effectively.

Plus, if there are gaps in what members of your team can do, you’ll need to train them so they can manage the requirements of the business.

Remember, more than you its how amazing your team is. So, don’t hesitate to hire people who are smarter than you!

DO assume it is not your employees but working together than bring in success

DON’T assume that if you’re employing more people, this means your company is more likely to succeed:

You need to make sure your employees work well together and contribute positively.

If some members of staff don’t work as hard as others and cause trouble instead (e.g. talking about you behind your back) it can lead to a bad work environment.

Don’t assume everyone is going to love your products

It’s essential as a business owner that you’re able to produce quality products or services to market. However, not all your customers are going to love your work.

You need to get over the fact that not everyone is going to like what you do, but you’ll learn from their feedback and make changes according to it.

It’s a good thing if they have a different opinion because this will help you create better products or services in the future.

DO Get your idea protected:

If you’re not a lawyer or a patent expert, then get someone who is to help you protect it.

You need to know what’s going on with your intellectual property and if anyone else has got something similar that could affect your business.

You can patent your idea, get the intellectual property on it, or even copyright it. Do not launch your business without knowing what’s going on with the IP!

By getting this sort of protection, you’ll be able to hit back at anyone who tries to copy you or make money off your product/service by using it themselves.

DO account for Legal Considerations For Starting A Business

  • DO Understand the legal structure of your business: 
    There are many legal considerations for starting a business. Depending on your location and the type of business you start, there could be different laws you have to follow.
  • DO Trademark:
    Entrepreneurs should trademark their business names and logos as soon as they think of it.
  • Do understand your intellectual property: 
    Entrepreneurs should understand all their intellectual property – including trademarks, copyrights, patents and licenses.
  • DO get the Licenses: 
    Depending on the type of business you start, this could be a one-time purchase or ongoing.

Check this out for legal considerations

Section 2: Once you start off your business

Assume no day will go smoothly for at least a year:

It’s going to take a long time for you to settle your business, so expect there to be lots of problems early on.

Your business will have its own ups and downs, which means it’s going to be hard for you from the onset if you have no experience or start from scratch.

Do assume that perfect is good enough:

It’s important that you’re satisfied with what you do and wish to improve your business as much as possible.

However you need to understand that your first product or service might not be perfect, but it’s going to be a start and you’ll continuously improve as time goes on.

DON’T assume your Strategy will work without hiccups or changes

Setting a business strategy means writing down an overall goal that you want to achieve with your business.

This is one of the most important things to do when starting out so you can track your progress and have something to aim for in the long run, instead of just going by how much money you’re making or in what direction you think business is going right now.

It’s best to set an annual goal for a new business.

It can be a monthly, quarterly, or bi-annual one too, but the main thing is to track your progress and make sure you don’t take any steps backward.

DO re-evaluate and change things in your strategy, planning and tactics and provide room for experimentation and iteration:

You’re going to find out a lot about your business as you start it out. You’ll have to reevaluate and change things if it doesn’t go as planned.

You may also need to adjust the strategy, planning, and tactics you’ve set for your business.

DO Assume there will Risks and Responsibilities of Entrepreneurs

Starting a business is not for everyone.

You need to be willing to take risks and have the right mindset for it.

You should be able to make calculations with high accuracy, think on your feet, understand how other people are feeling, and possess great problem-solving skills.

This means you’ll need to assume that starting a business will be a challenge, but you’re up for it.

Some of the risks include

  • Financial Risk: bankruptcy, competitive risks, environmental risks, reputational risks, and political and economic risks.
  • Technological changes 
  • Volatile Market demand
  • Unforseen circumstances

Section 3: As you grow in your business:

Do assume you will need to hire more talented people:

The primary job of an entrepreneur is to create a business that will work.

This means delegating tasks to employees and working with a team to produce a product or service in a company.

You’ll need to be able to recruit good people for your startup, make sure you can motivate them, and bring out their full potential.

It’s also important that you know how to hire talented people and motivate them to stay in your company.

This is the only way you can continue improving your product or service and scale-up.

If you want to grow rapidly, you need to look for investors who put in time (and, money!) into your business:

If you want to grow rapidly, you’re going to need more resources. This includes money and time.

You may need enough funds to finance the business until it becomes profitable or make investments in equipment, machines, or people required for production.

The key is to find an investor who will put in both their time (and money) into your business. Remember investing time and knowledge is priceless!

What must an entrepreneur assume when starting a business?

In this image a lady is working on a laptop. Image used for a post on what must an entrepreneur assume when starting a business
  1. Consistency is important. You need to be able to wake up every day, work on your business and not get disappointed.
  2. DON’T assume you can’t be successful in your business
  3. Don’t assume you’ll fail right off the bat. You need to stay positive, even when things get difficult.  You should always believe that you’re capable of achieving success with your startup no matter how hard it gets.
  4. DO reevaluate and change things
  5. You may not see profits for at least a year.
  6. You should learn from other entrepreneurs who’ve gone through the same thing. You need to be able to pivot your business idea, or your whole company, in order to stay afloat.
  7. DO Assume there will Risks and Responsibilities of Entrepreneurs
  8. You’re going to have a lot of problems to solve if you want your startup to grow.
  9. You should have a good backup to not be worried about finances at home or for business.
  10. Remember employees don’t care for your business as much as you do. So, trust them, collaborate but also be careful.

Conclusion: What must an entrepreneur assume when starting a business (and not assume)

When starting a business, you must be willing to take risks and make calculated decisions. This doesn’t mean your business will be successful, but it is important to remember that risk-taking is inherent in any new venture.

Calculated decision-making involves looking at all of the potential outcomes of a choice and assessing the risks and rewards associated with each option.

This process can help you make better decisions for your business. 

In addition to risk-taking and sound decision-making, hard work is essential when starting a business.

You need to be prepared to put in long hours every day in order to get your company off the ground.

There are no shortcuts when it comes to entrepreneurship! 

Finally, it’s important to remember that not everyone is cut out to start a business.

Only people who are risk-takers, good decision-makers, and hard workers should even consider entrepreneurship! 

The key is to assess your own strengths and weaknesses before you decide.

What must an entrepreneur assume when starting a business (and not assume)