15 Golden Rules for Safe(r) Entrepreneurship

 

Are you wondering why most startup businesses will fail?

Perhaps they are built on an unstable platform or around an unsustainable basis; perhaps they don’t know what they are really doing, who their market is and what problem they are trying to solve.

Based on 30 years of my own entrepreneurial experiences, here are 15 Golden Rules for Safe(r) Entrepreneurship to avoid some of the greatest pain and pitfalls when starting a business.

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Rule #1: Always begin with the end in mind.  Be clear about what you want from your business, and how you will “exit” it. Remember, a business is a vehicle for wealth creation, and most often the wealth gain is only realised when you sell the business, (much like a house). Understanding your “exit strategy” from the beginning will ultimately determine your path to success, which may be the difference between creating wealth for you and your family, or just having a business, that provides self-employment, with very little chance of selling at a premium.

Rule #2: Always focus on the PROBLEM, not the solution.  Learn to listen to your customers carefully. Customers don’t care about your solution or technology.   They just have a problem, pain point, need, or job and just want it solved in a way that makes sense to THEM, not YOU.

Rule #3: Learn to ask the RIGHT questions.  The answers are in question.  By keeping asking questions or 5-Whys? (Why? x 5 times), you are able to get to the root of the customer’s problem, which may not be so obvious. 

Rule #4: Begin your business with a REAL purpose in mind: Do something you love and are good at, that people need and you can make money from, then passion will be your driver. The Japanese call it “Ikigai” 

Rule #5: Your business MUST create wealth for you and your family.  Otherwise, it can ultimately lead to heartache, headache, and significant opportunity cost. 

Rule #6: Don’t JUST focus on making money:  Aim to become the best in the world at what you do, then the money will come.

Rule #7Trust and credibility are the pillars of a successful business:  No trust, no credibility, no business!  When starting a business, people are buying YOU, not your offer (the offer is secondary).  There is an old saying: if people like you, they will listen to you, if they trust you, they will buy off you, but they have to get to know you first.

Rule #8: Learn to solve a complex problem:  The more complex it is, the more money you can make!

Rule #9: The right timing is one of the MOST critical factors in business success: Your team is second, then factors such as business model, idea, funding arrangement, etc.

Rule #10: Forget about writing a business plan: Instead spend that time and effort finding a customer, learning to understand their needs, and creating a solution for them. (The plan comes later when you have worked out what you are doing).

Rule #11: No money to start? Then you have to learn to “hustle”. Become a “deal maker”, broker, or help someone solve his or her URGENT problem.

Rule #12: Learn the rules of the “Industry Game”:  Who are the major players and your competitors in your industry, who are the ones to watch out for, and who are the “400-pound Gorillas?” Then go develop a profitable niche.  Who knows? They may need you one day!

Rule #13: Learn to form strategic alliances and partnerships: having trust and credibility is a starting point, but having something to offer them, (such as a way to make or save money), will be the decisive factor.

Rule #14: Learn to delight your customers: Give them a reason to talk about your business (in a good way of course): by under-promising and delivering above their expectations.

Rule #15: Get to market as soon as possible: Don’t wait for your product or service to be “perfect”.  Customers aren’t looking for perfection, but rather function; 80% is near enough. Launch your product, get their feedback, and improve along the way.

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I hope that has given you some insight into the challenges of starting a business as an entrepreneur.

The key takeaways are:

Always, begin with the end in mind, listen to your customer, focus on the problem, start with a purpose and get to market as quickly as possible; 80% is near enough (as long as it works and is not crappy), and the customer’s feedback will steer you in the right direction. So, listen, learn, and repeat until you can reach excellence!

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By Tobi Nagy

About the author:

For over a decade, Tobi Nagy has been researching the entrepreneurship field and has developed a number of university courses in this field, and lectured and tutored in entrepreneurship and business at some of Australia’s leading universities and institutions. He is also one of the few academics who has founded (and continues to run), several successful businesses. Tobi is also the founder of The Global Entrepreneur Academy and co-founder of the Asia Venture Lab (a venture studio for the commercialisation of sustainability technologies in S.E. Asia).