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Common Mistakes First-Time Entrepreneurs Make and How to Stop Them

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Starting a business is a risky endeavor, even for seasoned professionals. The good news is the common pitfalls can be avoided by identifying and understanding them.

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Opinions expressed by Entrepreneur contributors are their own.
https://www.entrepreneur.com/leadership/7-common-mistakes-first-time-entrepreneurs-make-and-how-to/435058?fbclid=IwAR15yUlzI3oJGmsD0GjlTjQXA-M3a1JyFlBOlz62TyOJ-DaqmEhljOSh-vc

As you enter your first enterprise, you will likely face many challenges. It’s important to understand the common mistakes made by first-time entrepreneurs so that you can preempt them.

Hiring who you know, rather than who is best

As a first-time entrepreneur, you may be tempted to hire people you know looking for work. Perhaps it’s a friend or family member who has expressed an interest in working for your company. While this can be a good way to help out someone close to you, it can also lead to problems down the road if their skills don’t match what’s required of them on the job. Hiring based on skill set rather than who you know and trust is best.

 

Related: 8 Mistakes First-Time Founders Make When Starting a Business

Not having a great product or service

Even if you don’t want to compete on price, which many small businesses do because they can’t afford to compete on service, you still need to have something unique about your product or service to succeed. Without this unique element, your customers will go elsewhere and find someone offering something better than what you’re offering them. Their loyalty goes with them when they do that, and they may never return.

Not mastering your finances

Your financial management skills are crucial to the success of your business. Whether you’re a first-time entrepreneur or have been in business for years, there are always ways to improve your money management practices. Here are some tips for getting started:

  • Make a plan. You need to know where your money is going and how much of it you have at any given time. A good approach is to set up a budget and stick with it so that you don’t get over your head financially and become overwhelmed by stress.
  • Keep track of expenditures and revenue streams throughout each month to see where new trends may be emerging for both positive (new clients) and negative (increased expenses). This will allow you to make more informed decisions about future spending plans based on what has worked well in the past versus trying out something new without knowing how much impact it will have on cash flow over time.

Related: 10 Top Reasons Why First-Time Entrepreneurs Fail

Expecting everyone to work as you do

As a founder, you may think that you can expect everyone to work as you do. And while it’s true that every employee should be working hard toward the success of your business, it’s important to understand that not everyone works the same way. Some people are better at communicating than others or have different strengths and weaknesses in their work performance. If you want your company to succeed and thrive, then it’s vital for you as an entrepreneur to be flexible and adaptable when dealing with employees who don’t use the same approach as yourself.

The good news is that being understanding of others’ differences doesn’t mean compromising your values; instead of trying to force employees into becoming like yourself, try looking at ways that each person fits into the bigger picture of what makes up a successful organization. By taking this mindset into account when hiring new workers, conducting performance reviews or giving feedback on projects completed by existing staff members (and even vendors), entrepreneurs can improve workplace culture by promoting positive relationships amongst all parties — including themselves.

Spending too much time in the office

A first-time entrepreneur’s most common mistake is spending too much a in their office. In the early days of your company, you need to be around the office to build culture and relationships with employees. But once you get going, you don’t need to be at work for every single hour of the day.

You will not be able to hire someone better than you at managing your team if you don’t give yourself some space from them — which means working from home occasionally or taking a few hours off during certain days.

Letting ego get the best of you

Ego is a big problem for first-time entrepreneurs. It’s easy to get caught up in our ideas, convinced that they are the best and the only ones worth building. But when you’re starting a business, it’s important to let go of your ego and listen to others around you.

Ego is also one of the biggest reasons why people hire unqualified employees. If you think everyone around you is beneath you because they don’t have your degree or experience, then it will be hard for them to give advice or help out with your business in any way other than as an employee who does exactly what he’s told without thinking twice about whether it makes sense or not.

Related: Why A Big Ego Reduces Your Chance At Business Success

Doing everything yourself

Being an entrepreneur is hard. There are plenty of things to worry about, and you can’t do it all yourself. One of the most common mistakes first-time entrepreneurs make is doing everything themselves — which means they take on too much risk and don’t realize their true potential.

If your goal is to build a successful company, there are specific tasks you should outsource or delegate entirely to other people who can do them better than you:

  • Hire someone else as your accountant instead of doing your taxes every year.
  • Get a lawyer to review contracts before signing them instead of trying to learn the legal language yourself.
  • Make sure HR processes are in place so employees can get paid on time, rather than having that be your responsibility every month.

First-time entrepreneurs must be willing to learn and adapt

As you begin your new journey, it is essential to keep in mind that you are not perfect. Even the most seasoned of entrepreneurs make mistakes — and that’s okay. The key is not to make the same mistake twice. You will learn from your mistakes and adapt as you go along.

 
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7 Ways to Become Smarter Every Week

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Spend time every day learning something new.

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Opinions expressed by Entrepreneur contributors are their own.
https://www.entrepreneur.com/living/7-ways-to-become-smarter-every-week/327754?fbclid=IwAR03VPzYxNidqF95V04xprs9UWqYmIZBDFy0-pqoLra1REc5lAPF97Eriss
 

To be successful in business, you need a nimble mind to react to problems faster and you need to be adept at understanding whatever is thrown your way. In short, your ability to succeed is often determined by how smart you are.

With practice, anyone can increase their knowledge base, sharpen their intellect and learn new skills. There are a number of ways to boost your cognitive ability and expand your mental capacity. We should aim to spend time every day learning something new. The more we learn and the more deeply we understand, the better we can improve our brain performance and increase our capacity to learn and thus live a smart life.

The list below includes the best ways to engage your mind and grow your intelligence so a smart person like yourself can meet the ever-mounting challenges you face. By following these seven useful tips, you can become a little smarter every week.

1. Spend time reading every day.

The mind is like a muscle: the more you use it the stronger it will become. Reading is an important element for developing your mind, as it’s one of the basic ways we gain knowledge and learn.

 

Through reading, you can discover new things and educate yourself on any topic. Reading also helps develop your creative side by engaging your imagination. Words, both spoken and written, are the building blocks of our social existence — and through words, you can go anywhere in the world.

If you’re looking to quickly grow your knowledge, one simple way is to speed up your reading so you can charge through books, written material and even online articles (like this one!). Most people read at an average rate of 250 words per minute. At that rate, it would take you about six minutes to read this article. But with speed reading, you could cut that time in half. Just remember, the goal is to help you rapidly consume more information, not just zoom past words without fully comprehending their meaning.

Related: Learn to Speed Read and Retain More Information

2. Focus on building a deeper understanding.

Becoming smarter takes more than just absorbing information — true wisdom comes from deeply understanding a subject. The most successful people consistently outpace everyone else because they’re able to quickly learn new skills, adapt to changes and work both collaboratively and independently.

They use a deep and meaningful knowledge of their world and a flexible mindset to understand problems and quickly come up with solutions. Their deep knowledge base gives them the foundation they need to perform.

Work to steadily build a deep and meaningful knowledge base on a few key topics and issues. Be honest with yourself about areas you are weak in and seek to reinforce your understanding of important subjects until you have a rock-solid foundation that you can build on. Knowledge is cumulative, so start with the basics. You need to have a firm grasp of how something works before you can fix it. It’s good to have a breadth of knowledge, but it’s also important to take “deep dives” to truly understand difficult and complex issues.

3. Constantly question and seek clarification.

Asking questions is the single most important factor in becoming smarter. Innovation always begins by asking questions and being curious. There is value in asking questions because it’s the way we push the boundaries of our world and our mind. That’s why it’s so important to hone a curious, open mind by constantly questioning everything.

It’s not just a matter of asking questions; you should be asking insightful questions that probe the validity of assumptions, analyze logic and explore the unknown. Practice asking questions that get to the heart of a matter and cultivate a willingness to push for answers.

Like anything else, developing this skill takes time and hard work. As you’re working, reading or engaging in activities, keep a running log of questions that come to mind about anything and everything that you’re involved with. Don’t be afraid to seek clarification when something isn’t clear.

Related: 3 Questions ‘Always On’ Entrepreneurs Need to Ask Themselves

4. Diversify your day.

One of the best ways to increase your intelligence involves flexing different areas of your brain. You aren’t going to get any smarter by doing the same ol’, same ol’ every day. While having a routine is a good thing (so your body knows when to get up and when it’s bedtime), you don’t want to spend your waking hours stuck in a rut.

By inviting a little novelty into your everyday life, you keep things fresh and interesting. That might mean checking out a new place for lunch, or going for a midday stroll on which you pay attention to the sights and sounds around you. You can also mix things up during working hours by simply finding new ways of doing your everyday tasks and getting out of your comfort zone.

If you’ve been working for a while on one thing, it could benefit you to try switching to something else. Look for ways to do things slightly differently. This will fend off boredom and help your mind stay sharp and focused. By mixing things up, you’ll use parts of your brain a little differently each day. This helps you increase your intelligence by forcing you to flex your brainpower in different ways — think of this as an overall workout for your brain health.

5. Review learned information.

We recall new information most crisply right after we’ve learned it. If you don’t use that information again soon after you’ve learned it, it will quickly fade from your mind. After a few days, we may only be able to recall a little of what we initially learned. In order to increase our ability to remember, we need to store this information in our long-term memory, and the best way to do this is to frequently review what we’ve learned until it’s locked in our memory banks.

Make notes while reading or researching something, or take a few minutes when you’re done and write down the main points. Then spend even a few minutes every day reviewing this material. It takes a little effort, but once it’s a habit you’ll be amazed at how well a quick review of the information will help confirm that you understand it — and help you see what areas you need to focus on.

You can also try rewriting the information or reorganizing your notes — this will actively reinforce what you’ve learned. The act of rewriting notes helps us clarify our understanding of a topic and reduces the time it takes us to “relearn” it when we need to use that knowledge in the future.

Related: Unless You Track Your Progress, Setting Goals Is a Waste of Effort

6. Keep track of your ideas.

As you work to build your knowledge base, you’ll find your mind expanding and growing in new ways. If you’re filling your brain with great information, your mind is going to do its thing and start interpreting that information in a useful way. You may find that you’ve suddenly become an idea machine. You’ll start experiencing “aha moments” — those little breakthroughs where you suddenly connect one idea to another to form an even bigger and better idea.

Make sure you’re taking note of these ideas. Write them down, keep them handy and make sure you continue to refer back to them. Remember, even your biggest and best ideas are utterly useless unless you actually do something with them. If you have a stroke of genius but lose your train of thought and never go back to build on that idea or refine it — well, then you’ve just missed a great opportunity!

Not all of your new ideas are going to be winners. Some may be fleeting or simply won’t pan out. But once in a while, you might have a lightbulb moment that could change your life.

7. Allow yourself to change.

Whether we realize it or not, sometimes we hold ourselves back. There are times when even the smartest person allows themselves to become bound to obsolete or erroneous ideas and ways of thinking. To become truly intelligent, you must allow yourself to make mistakes, to take risks and leap at opportunity and learn from all these experiences.

You must allow yourself to change, to be open to new things and to ultimately become a different, better version of yourself. By opening yourself up to new sources of knowledge and pushing your mind to learn new things, you may ultimately question some of your old, foundational thinking. You may find that some of your perceptions were off, or that your viewpoints weren’t grounded in fact.

Challenge ideas, discuss them with others, hear out other sides and flex your analytical skills. But be open to changing your mind. And above all, give yourself room to grow and continue on your path to seeking wisdom. As you become smarter, success will follow.

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The Case for a 4-Day Work Week

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A four-day workweek leads to more satisfied workers, narrows the gender gap and the return on investment is better than expected.

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https://www.entrepreneur.com/leadership/the-case-for-a-4-day-work-week/434066
 
Opinions expressed by Entrepreneur contributors are their own.
 

Digital marketing agencies navigated the waves of the COVID-19 pandemic with proportionate ease. We are a remote-friendly part of the industry and did not have all the same ship steering issues our more long-established colleagues had to face. Even with pulling staff back to “business as usual,” many of us were able to shift focus so we could retain our teams for the future.

Planned or not, people found out quickly during the pandemic if they loved the work they found themselves doing. We have watched it play out in the Great Resignation, with workers willing to make enormous sacrifices for a better work-life balance and more flexible schedules to care for family members or fortify their mental health. Offers of pay increases, unlimited PTO and full healthcare benefits were no match for those experiencing burnout or on the verge of quietly quitting.

 

So what’s one method successful digital marketing agencies practice to keep committed employees and recruit new talent? They offered them a shorter workweek.

Related: Is the 4-Day Work Week Better? Evidence Points to Yes.

What is a four-day workweek?

The 40-hour workweek, with its 8-hour days, sometimes time off for lunch, and extended coffee breaks is outdated. Historically, it was a way to protect workers and increase overall productiveness for specific industries. It is the very thing that gave structure to the modern-day office, though not without some effects being lost in translation since work at a digital marketing agency differs significantly from tasks done on an assembly line.

Iceland, Japan, New Zealand, Spain and the UK have all successfully experimented with the four-day workweek. While the old guards of corporations may view a compressed workweek with a skeptical eye, data illustrates that a schedule with four days on and three days off only increases employee well-being, family balance and productivity. Extended weekends might seem lavish, but extra sleep, quality time with loved ones and the opportunity to move slower truly benefit our bodies and minds.

Related: Why I’m Shifting to a Four-Day Workweek This Summer

Remote work further proved something that we creatives knew all along: so long as deadlines are met, the when, how and where of work does not really matter. Remote workweeks saw an uptick in productivity and even saw workers starting their days earlier or ending them later. We all began to grasp how the absence of an unsympathetic daily commute and fewer office life distractions made for more satisfied employees. No one really wants to attend yet another subcommittee meeting or pause their workday for required personnel celebrations when they are on a deadline.

Ways to implement a four-day workweek

Piloting a four-day workweek can look different for companies. They can start slow and test out one week of compressed hours per month. All staff could take the same day off, or a rotating employee’s choice schedule can be put in place if an agency must be open for a classic work week. Workplace management software and task automation tools will help the process go more smoothly, whichever route a company takes. Companies can make skill-building resources available, especially in time and task management, prioritizing and organization and verbal and written communication.

A four-day workweek leads to more satisfied workers, narrows the gender gap and the return on investment is better than expected. It should not, however, come at the expense of cramming more into what might feel like a shorter time frame at first. Jamming in extra meetings or duties defeats the purpose of a new schedule aimed at increasing motivation and morale, deep work, granting more autonomy and making space for talent to shine.

Why the four-day workweek is a fit for digital marketing agencies?

Two extra hours in a workday are not lost on digital marketers, especially if it means there is a potential for distraction-free time to accomplish the deep work so often required of us. Minus the essential meeting, product launch or important client event, days off can be maneuvered around a calendar with enough advanced notice.

Joe O’Connor, the CEO of 4 Day Week Global, leads six-month pilot programs for four-day weeks. The business leaders he has worked with have described company transitions to a compressed week as “the cheapest, most efficient process improvement strategy.”

A flexible work schedule is not just an advantage over competitors but has become an expectation. It is even easier to try with an office following a hybrid schedule with team members already working a certain number of days in and out of the office.

Digital marketing agencies can lead

Remote work has benefited the world, and it is here to stay. When it comes to spreading the word about the efficiency and well-being benefits of the four-day workweek, digital marketing agencies can lead the way for other industries. Why not give this “ahead of its time” concept a go? Our teams will be happier and more productive, so let’s support them and strike out burnout culture simultaneously.

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5 Things Disruptive Leaders Must Learn as They Scale

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Being a disruptive leader takes vision, communication and balance. Here are five things I’ve learned as I’ve disrupted my industry.

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Opinions expressed by Entrepreneur contributors are their own.
 

I am naturally a disruptive leader — someone who not only embraces change but thrives in it, driving innovation and transformation. I love pushing boundaries and surprising people with bold decisions that change our company and industry. Seeing your strategic vision and hard work pay off as your company pivots and the industry follows feels exhilarating. But it can also be exhausting and even damaging if you don’t understand your decisions’ true impact.

Growing StoneAge from a small traditional manufacturing company that sells high-pressure waterblasting tools to an industry-leading automation and robotics firm, I’ve made good and bad decisions as we’ve disrupted ourselves and the markets we serve. Changing how people think and work is difficult, and it always takes longer than one thinks. I’ve pushed too hard, made decisions too quickly and intimidated people with our hard-charging approach during my mission to change our company, industry and the world.

 

As we embark on our next phase of disruption, I’m taking what I’ve learned over the last decade and applying the lessons to our approach — and below, I’ll share those lessons with you:

Related: 3 Steps to Creating a Disruptive Mindset

1. Disruption requires planning and careful decision-making

I tend to underestimate the effort and planning required to make a disruptive change. When we decided to change our sales model from distribution to direct (which was highly disruptive to our niche industry), we began executing less than eight weeks from making the decision. While the industry was surprised, and it took them a while to respond, I didn’t fully prepare my team for the effort either. Through brute force, we made it happen, but it was far more difficult and costly than it had to be. I learned that a clearly articulated vision and a well-executed plan are far less taxing to the organization. We now operate off of a 2030 Vision and a well-organized plan that keeps us on track while allowing us to be agile as we learn and grow.

2. Acknowledge uncertainty and risk

It can be challenging for leaders to say “I don’t have all the answers,” but the truth is, we don’t. Disruptive leaders have a vision for what can be, but there is no way to guarantee outcomes. Rather than pretend that the road ahead will be smooth, admit to your team that there will be challenges, mistakes and maybe even turmoil as you travel towards disruption. Admit that the company may have to pivot as new challenges pop up (ahem, Covid), and share with them how the company will handle it by making good decisions, staying focused on problem-solving and being agile and curious.

Related: Why Amazon and Jeff Bezos Are So Successful at Disruption

3. Be transparent and honest

When we changed our business model from distribution to direct sales, we were moving fast, and we didn’t want anyone in the industry to get wind of what we were doing. So, the executive management team holed up in a conference room dubbed “The War Room” and mapped out our game plan. We decided to lock the door at night so no one could come in and see our whiteboards filled with ideas and decisions. We told our employees that this was top secret, and we wouldn’t be sharing the plan until we had it figured out.

The lack of transparency was a departure from how we usually do things. We are an open-book company and share our financials and strategy with everyone in the company. The lack of transparency scared people, and people felt left out and in the dark. In fact, on an employee survey a few months later, someone described feeling like a mushroom, left in the dark and fed poop. Don’t let this happen. Be transparent and honest with your people. You are asking them to do hard things, because disruption isn’t easy. Honor them by telling them the truth and trusting them to help you achieve your vision and plan.

4. It takes time for seeds to grow

It’s challenging to be patient, and if you underestimate how long changing a company or industry takes, you might not let the seeds you planted grow. I made this mistake in the past, changing direction when I didn’t see immediate results, and I had to slow down and backtrack to get the company on the right path again. Operating in line with our 2030 Vision, we now take a long-term view of progress and are more patient as we innovate. The results are remarkable; not only are we disrupting the industry, but we are also having a lot more fun while we do it. People are aligned and clear about our mission. They can see the results, making them feel part of something bigger than themselves. The seeds have sprouted and are developing buds, and we are nurturing the next growth phase.

Related: 6 Characteristics of an Innovative Leader

5. Embrace the paradox of change

The Paradoxical Theory of Change states that the more you try to change by being something you are not, the more you stay right where you’re. Organizations are the same. As you look to disrupt yourself, your company and your industry, don’t forget who you are at your core. Stay true to your company values and your vision. Change happens when you build upon who you are as a company, not when you try to become an entirely different one. At my company, we use our 2030 Vision and what we call the “Recipe For Success,” our core operating principles, to guide us as we assess new opportunities or consider new strategic initiatives while remaining true to who we are as a company. Doing so pays off; we can see where we want to go and feel confident to get there, because we know who we are.

What excites me most as I continue to mature as a disruptive leader is the balance I am finding between long-term planning and living in the moment. The thrill of making an impact can take over your life, but if you are only living in the future, it isn’t easy to enjoy the present. The goal is to find the sweet spot of both being present and enjoying the moment while at the same time setting yourself and your company up for success in the future.

https://www.entrepreneur.com/article/432431?fbclid=IwAR2eW5WTCCBcwPhhHMfGJaKGb3qef0eqgKtx_e1GZsr17p7z72NGx7YJNd8

 

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The Complete, 12-Step Guide to Starting a Business

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Everything you need to know about how to start a business.

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There are no limits on who can become a great entrepreneur. You don’t necessarily need a college degree, a bunch of money in the bank or even business experience to start something that could become the next major success. However, you do need a strong plan and the drive to see it through.

If you’re on Entrepreneur, odds are you already have the drive, but you might not know how to start building your empire.

That why we are here.

Check out this step-by-step guide to help turn your big idea into a successful business.

 

Related: 10 Mistakes to Avoid When Starting an Online Business

1. Evaluate yourself.

Let’s start with the most basic question: Why do you want to start a business? Use this question to guide what kind of business you want to start. If you want extra money, maybe you should start a side hustle. If you want more freedom, maybe it’s time to leave your 9-to-5 job and start something new.

 

Once you have the reason, start asking yourself even more questions to help you figure out the type of business you should start, and if you have what it takes.

  • What skills do you have?
  • Where does your passion lie?
  • Where is your area of expertise?
  • How much can you afford to spend, knowing that most businesses fail?
  • How much capital do you need?
  • What sort of lifestyle do you want to live?
  • Are you even ready to be an entrepreneur?

Be brutally honest with your answers. This will create a foundation for everything you do moving forward, so it’s better to know the truth now than later.

Related: 15 Free Online Learning Sites Every Entrepreneur Should Visit

2. Think of a business idea.

Do you already have a killer business idea? If so, congratulations! You can proceed to the next section. If not, there are a ton of ways to start brainstorming for a good idea. An article on Entrepreneur, “8 Ways to Come Up With a Business Idea,” helps people break down potential business ideas. Here are a few pointers from the article:

  • Ask yourself what’s next. What technology or advancement is coming soon, and how will that change the business landscape as we know it? Can you get ahead of the curve?
  • Fix something that bugs you. People would rather have less of a bad thing than more of a good thing. If your business can fix a problem for your customers, they’ll thank you for it.
  • Apply your skills to an entirely new field. Many businesses and industries do things one way because that’s the way they’ve always been done. In those cases, a fresh set of eyes from a new perspective can make all the difference.
  • Use the better, cheaper, faster approach. Do you have a business idea that isn’t completely new? If so, think about the current offerings and focus on how you can create something better, cheaper or faster.

Also, go out and meet people and ask them questions, seek advice from other entrepreneurs, research ideas online or use whatever method makes the most sense to you.

 

And, if you’ve exhausted all your options and you’re still stuck, here are 55 great business options you can start.

Related: 63 Businesses to Start for Under $10,000

3. Do market research.

Is anyone else already doing what you want to start doing? If not, is there a good reason why?

Start researching your potential rivals or partners within the market by using this guide. It breaks down the objectives you need to complete with your research and the methods you can use to do just that. For example, you can conduct interviews by telephone or face to face. You can also offer surveys or questionnaires that ask questions like “What factors do you consider when purchasing this product or service?” and “What areas would you suggest for improvement?”

Just as importantly, it explains three of the most common mistakes people make when starting their market research, which are:

 
  1. Using only secondary research.
  2. Using only online resources.
  3. Surveying only the people you know.

Related: How to Start a Business Online

4. Get feedback.

Let people interact with your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people will become your first brand advocates, especially if you listen to their input and they like the product.

One of the easiest ways to utilize feedback is to focus on “The Lean Startup” approach (read more about it here), but it involves three basic pillars: prototyping, experimenting and pivoting. By pushing out a product, getting feedback and then adapting before you push out the next product, you can constantly improve and make sure you stay relevant.

 

Just realize that some of that advice, solicited or not, will be good. Some of it won’t be. That’s why you should have a plan on how to receive feedback.

Here are six steps for handling feedback:

  1. Stop! Your brain will probably be in an excited state when receiving feedback, and it might start racing to bad conclusions. Slow down and take the time to consider carefully what you’ve just heard.
  2. Start by saying ‘thank you.’ People who give you negative feedback won’t expect you to thank them for it, but doing so will probably make them respect you and encourage them to continue be honest in the future.
  3. Look for the grain of truth. If someone doesn’t like one idea, it doesn’t mean they hate everything you’ve just said. Remember that these people are trying to help, and they might just be pointing out a smaller problem or solution that you should look into further.
  4. Seek out the patterns. If you keep hearing the same comments, then it’s time to start sitting up and taking notice.
  5. Listen with curiosity. Be willing to enter a conversation where the customer is in control.
  6. Ask questions. Figure out why someone liked or didn’t like something. How could you make it better? What would be a better solution?

Also, one way to help you get through negative feedback is to create a “wall of love,” where you can post all of the positive messages you’ve received.Not only will this wall of love inspire you, but you can use these messages later when you begin selling your product or service. Positive reviews online and word-of-mouth testimonials can help make a big difference.

Related: 12 Mind Tricks That Will Make People Like You and Help You Get Ahead

5. Make it official.

Get all of the legal aspects out of the way early. That way, you don’t have to worry about someone taking your big idea, screwing you over in a partnership or suing you for something you never saw coming. A quick checklist of things to shore up might include:

  1. Business structure (LLC, corporation or a partnership, to name a few.)
  2. Business name
  3. Register your business
  4. Federal tax ID
  5. State tax ID
  6. Permits (more on permits here)
  7. License
  8. Necessary bank account
  9. Trademarks, copyrights or patents

While some things you can do on your own, it’s best to consult with a lawyer when starting out, so you can make sure you’ve covered everything that you need.

 

Here are some questions you can ask when looking for a small-business lawyer.

Related: The Top 7 Legal Documents for Every Startup

6. Write your business plan.

A business plan is a written description of how your business will evolve from when it starts to the finish product.

As angel investor and tech-company founder Tim Berry wrote on Entrepreneur, “You can probably cover everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, management resumes and other details. If you’ve got a plan that’s more than 40 pages long, you’re probably not summarizing very well.”

Here’s what we suggest should be in your business plan:

  1. Title page. Start with name the name of your business, which is harder than it sounds. This article can help you avoid common mistakes when picking.
  2. Executive summary. This is a high-level summary of what the plan includes, often touching on the company description, the problem the business is solving, the solution and why now. (Here’s what you should include in the summary and how you can make it appeal to investors.)
  3. Business description. What kind of business do you want to start? What does your industry look like? What will it look like in the future?
  4. Market strategies. What is your target market, and how can you best sell to that market?
  5. Competitive analysis. What are the strengths and weakness of your competitors? How will you beat them?
  6. Design and development plan. What is your product or service and how will it develop? Then, create a budget for that product or service.
  7. Operations and management plan. How does the business function on a daily basis?
  8. Finance factors. Where is the money coming from? When? How? What sort of projections should you create and what should you take into consideration?

For each question, you can spend between one to three pages. Keep in mind, the business plan is a living, breathing document and as time goes on and your business matures, you will be updating it.

 

Related: How to Start a Business With (Almost) No Money

7. Finance your business.

There are a ton of different ways to get the resources you need to start your business. Angel investor Martin Zwilling, whose business Startup Professionals provides services and products for startups and small businesses, recommends 10 of the most reliable ways to fund your business. Take a look and consider your own resources, circumstances and life state to figure out which one works best for you.

  1. Fund your startup yourself. Bootstrapping your business might take longer, but the good part is that you control your own destiny (and equity).
  2. Pitch your needs to friends and family. It can be hard to separate business from personal relationships, but if you’re considering asking for a loan, here’s a resource you can use to make it as straightforward as possible.
  3. Request a small-business grant. Start by checking out our guide to small-business grants. Then, head over to Grants.gov, which is a searchable, online directory of more than 1,000 federal grant programs. It might be a long process, but it doesn’t cost you any equity.
  4. Start a crowdfunding campaign online. Sometimes power is in numbers, and a bunch of small investments can add up to something major. If you think your business might be a fit for something like Kickstarter or Indiegogo, you should read up on 10 of the best-crowdfunded businesses ever or check out the most popular crowdfunding websites.
  5. Apply to local angel investor groups. Online platforms such as Gust and AngelList and local networking can help you find potential investors who relate to your industry and passion.
  6. Solicit venture capital investors. VCs typically look for big opportunities from proven teams that need a million dollars or more, so you should have some traction before approaching them.
  7. Join a startup incubator or accelerator. These companies are designed to help new or startup businesses get to the next level. Most provide free resources, including office facilities and consulting, along with networking opportunities and pitch events. Some, also provide seed funding as well.
  8. Negotiate an advance from a strategic partner or customer. If someone wants your product or service bad enough to pay for it, there’s a chance they’ll want it bad enough to fund it, too. Variations on this theme include early licensing or white-labeling agreements.
  9. Trade equity or services for startup help. For example, you could support a computer system for office tenants in exchange for free office space. You might not get paid for this, but you won’t have to pay for an office, either, and a penny saved is a penny earned.
  10. Seek a bank loan or line of credit. Here are 10 questions you should ask before applying for a bank loan, including whether you will qualify. If you do meet the requirements, a good place to start for loan opportunities is the Small Business Administration.

Related: 7 Seed-Stage Funding Sources That Might Finance Your Startup

8. Develop your product or service.

After all the work you’ve put into starting your business, it’s going to feel awesome to actually see your idea come to life. But keep in mind, it takes a village to create a product. If you want to make an app and you’re not an engineer, you will need to reach out to a technical person. Or if you need to mass-produce an item, you will have to team up with a manufacturer.

Here is a seven-step checklist — including finding a manufacturer and pricing strategies — you can use for your own product development. A major point the article highlights is that when you’re actually crafting the product, you should focus on two things: simplicity and quality. Your best option isn’t necessarily to make the cheapest product, even if it lowers manufacturing cost. Also, you need to make sure the product can grab someone’s attention quickly.

When you are ready to do product development and outsource some of the tasks make sure you:

 
  1. Retain control of your product and learn constantly. If you leave the development up to someone else or another firm without supervising, you might not get the thing you envisioned.
  2. Implement checks and balances to reduce your risk. If you only hire one freelance engineer, there’s a chance that no one will be able to check their work. If you go the freelance route, use multiple engineers so you don’t have to just take someone at their word.
  3. Hire specialists, not generalists. Get people who are awesome at the exact thing you want, not a jack-of-all-trades type.
  4. Don’t put all your eggs in one basket. Make sure you don’t lose all of your progress if one freelancer leaves or if a contract falls through.
  5. Manage product development to save money. Rates can vary for engineers depending on their specialties, so make sure you’re not paying an overqualified engineer when you could get the same end result for a much lower price.

To help you have peace of mind, start learning as much as you can about the production, so you can improve the process and your hiring decisions as time goes along.

This process will be very different for service-focused entrepreneurs, but no less important. You have several skills that people are willing to pay you for right now, but those skills can be hard to quantify. How can you establish yourself and your abilities? You might consider creating a portfolio of your work — create a website to show your artwork if you’re an artist, writing if you’re a writer or design if you’re a designer.

Also, make sure you have the necessary certificates or educational requirements, so that when someone inquires about your service, you’re ready to jump at a good opportunity.

Related: 105 Service Businesses to Start Today

9. Start building your team.

To scale your business, you are going to need to hand off responsibilities to other people. You need a team.

Whether you need a partner, employee or freelancer, these three tips can help you find a good fit:

 
  1. State your goals clearly. Make sure everyone understands the vision and their role within that mission at the very start.
  2. Follow hiring protocols. When starting the hiring process you need to take a lot of things into consideration, from screening people to asking the right questions and having the proper forms. Here is a more in-depth guide to help you.
  3. Establish a strong company culture.  What makes a great culture?  What are some of the building blocks? You can see our list of 10 examples of companies with great cultures, but keep in mind that you don’t need to have Google‘s crazy office space to instill a positive atmosphere. That’s because a great culture is more about respecting and empowering employees through multiple channels, including training and mentorship, than it is about decor or ping-pong tables. In fact, office perks can turn out to be more like traps than real benefits.

Related: 10 Online Careers You Can Start Today With Basically No Money

10. Find a location.

This could mean an office or a store. Your priorities will differ depending on need, but here are 10 basic things to consider:

  1. Style of operation. Make sure your location is consistent with your particular style and image.
  2. Demographics. Start by considering who your customers are. How important is their proximity to your location? If you’re a retail store that relies on the local community, this is vital. For other business models, it might not be.
  3. Foot traffic. If you need people to come into your store, make sure that store is easy to find. Remember: even the best retail areas have dead spots.
  4. Accessibility and parking. Is your building accessible? Don’t give customers a reason to go somewhere else because they don’t know where to park.
  5. Competition. Sometimes having competitors nearby is a good thing. Other times, it’s not. You’ve done the market research, so you know which is best for your business.
  6. Proximity to other businesses and services. This is more than just about foot traffic. Look at how nearby businesses can enrich the quality of your business as a workplace, too.
  7. Image and history of the site. What does this address state about your business? Have other businesses failed there? Does the location reflect the image you want to project?
  8. Ordinances. Depending on your business, these could help or hinder you. For example, if you’re starting a daycare center, ordinances that state no one can build a liquor store nearby might add a level of safety for you. Just make sure you’re not the one trying to build the liquor store.
  9. The building’s infrastructure. Especially if you’re looking at an older building or if you’re starting an online business, make sure the space can support your high-tech needs. If you’re getting serious about a building, you might want to hire an engineer to check out the state of the place to get an objective evaluation.
  10. Rent, utilities and other costs. Rent is the biggest facilities expense, but check out the utilities, as well, and whether they’re included in the lease or not. You don’t want to start out with one price and find out it’s going to be more later.

Once you know what to look for and it’s time to start searching for a place that fits all of your qualifications, these four tips can help.

  1. Think on your own timeframe. Landlords are starting to offer shorter-term office rentals. Don’t get stuck in a long-term lease if it doesn’t make sense for your business.
  2. Play the whole field. There are all sorts of places to use — co-working spaces, office business centers, sublets and more. Keep your options open.
  3. Click around town. You might be able to find the perfect place by using online resources.
  4. Do the deal on your terms. Again, you have options. Don’t get roped into something that makes you uncomfortable.

After you have a location, you can focus on the aesthetic. You can check out a few design ideas here.

Related: 5 Best Online Businesses to Start This Year (Infographic)

11. Start getting some sales.

No matter your product or industry, your business’s future is going to depend on revenue and sales. Steve Jobs knew this — it’s why, when he was starting Apple, he spent day after day calling investors from his garage.

 

There are a ton of different sales strategies and techniques you can employ, but here are four tenets to live by:

  1. Listen. “When you listen to your clients/customers, you find out what they want and need, and how to make that happen,” says investor and entrepreneur John Rampton.
  2. Ask for a commitment, but don’t be pushy about it. You can’t be too shy to ask for a next step or to close a sale, but you also can’t make customers feel as though you’re forcing them into a sale.
  3. Don’t be afraid of hearing “no.” As former door-to-door salesman (and now co-founder of software business Pipedrive) Timo Rein said, “Most people are too polite. They let you make your pitch even if they have no interest in buying. And that’s a problem of its own. Time is your most important resource.”
  4. Make it a priority. As entrepreneurial wizard Gary Vaynerchuk said, “Actually creating revenue, and running a profitable business, is a good strategy for business. Where are we that people think users or visits or time on site is the proxy to a successful business?”

But how do you actually make those sales? Start by identifying targets who want your product or service. Find early adopters of your business, grow your customer base or put out ads to find people who fit your business. Then, figure out the right sales funnel or strategy that can convert these leads into revenue.

Related: 63 Businesses to Start for Under $10,000

12. Grow your business.

There are a million different ways to grow. You could acquire another business, start targeting a new market, expand your offerings and more. But, no growth plan will matter if you don’t have the two key attributes that all growing companies have in common.

First, they have a plan to market themselves. They use social media effectively through organic, influencer or paid campaigns. They have an email list and know how to use it. They understand exactly who they need to target — either online or off — with their marketing campaigns.

Then, once they have a new customer, they understand how to retain them. You’ve probably heard many people state that the easiest customer to sell to is the one you already have. Your existing customers have already signed up for your email list, added their credit card information to your website and tested what you have to offer. In doing so, they’re starting a relationship with you and your brand. Help them feel as good about that relationship as possible.

 

Start by utilizing these strategies, which include investing in your customer service and getting personal, but realize your work will never be done. You’ll constantly be competing for these customers in the marketplace, and you can never simply rest on your laurels. Keep researching the market, hiring good people and making a superior product and you’ll be on your way to building the empire you always dreamed about.

https://www.entrepreneur.com/article/297899?fbclid=IwAR03XKKRZ_zG4v74k-nXpwoptBjd0TCiDkAmmSuasNTUGYFyzmCcVNXrp7Q

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3 Super Simple Ways to Understand What Your Customer Wants

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Entrepreneurs share their smart (and sometimes painfully simple) approaches to finding out how to better serve their customers.

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https://www.entrepreneur.com/article/317463
 

Understanding your customers can be tough, but if you want your business to be successful, it’s crucial. Luckily, there are simple things you can do to get a grasp on who your audience is and what they like. To help, these three entrepeneurs chime in.

Related: 10 Reasons Why Good Customer Service Is Your Most Important Metric

Fred Stevens-Smith

Co-founder and CEO, Rainforest QA

Method: Ask for problems

 

When Fred Stevens-Smith and his co-founder, Russell Smith, were accepted into Y Combinator, they thought they had a brilliant idea: Help businesses track (and curb) money spent on Amazon Web Services. But when they got their program in front of beta testers, users shrugged. “It just wasn’t a big enough problem,” Stevens-Smith says. The duo built multiple prototypes to solve other problems for software development businesses, but each time, they heard the same feedback. “Most people were like, “I’d pay $10 a month for this.’ ” The founders needed a larger pain point. At a loss, they emailed their network: “What problem do you have in your development process that you would pay $1,000 a month to solve?” Multiple responses asked for the same thing — a way to test for quality throughout development. The founders dove in, and today their company has raised more than $40 million in funding and has more than 200 customers. Says Stevens-Smith, “We surfaced a need in the dumbest way possible.”

Related: Want More Customers? Get Quality Referrals From Existing Customers.

Joanna Griffiths

Founder and CEO: Knix

Method: “Online creeping”

Method: “Online creeping”

After her mom told her about the incontinence issues many women face as they age or have children, Joanna Griffiths could think of nothing else. “I was 26, so none of that had been on my radar,” she says. While working toward her MBA, she set out to build leakproof undergarments. Griffiths wasn’t sure where to start, so she googled. “I saw the topic coming up a lot in mommy forums and CrossFit forums,” she says. She quietly inserted herself into the conversation, something she calls digital anthropology, or, simply, “online creeping.” “I spent about two months letting people get comfortable with me,” Griffiths says. “I was very up front that I was looking to create this product and wanted to understand the needs.” As people opened up, Griffiths would suggest moving to a one-on-one chat to dive deeper. “Going where the conversation was happening was instrumental in the development of Knix,” she says. The company has seen 400 percent annual growth since launching in 2013. “People wanted to talk, and I was there to listen.”

Keith Krach

Co-founder: Ariba

Method: Put customers to work

Related: 10 Innovative Ways to Excite Your Customers

In 1996, Keith Krach was cofounding a startup called Ariba that wanted to digitize the procurement process. (Back then, it was all done on paper.) Krach’s team was eager to start working, but his VP of engineering refused to build a prototype until they had input from at least 60 potential customers. So Krach rounded up some people — mostly friends of the founders — and asked them what features would be most helpful. The feedback was valuable, so Krach invited the group to be part of an “advisory board” that would meet quarterly and present ideas to the company. Many became Ariba’s first customers; as the company grew, more were added to the board. “People support what they help create,” Krach says. He replicated the idea as CEO of DocuSign from 2011 to 2017. “If you ask someone for help and they say no, you’ve still flattered them. And maybe they’ll come later. Don’t be afraid to ask.”

 

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Authentic Leadership: What Is It and Why is it Important?

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In an ever-changing business landscape, we’re seeing how important it is to have authentic leadership development that is built to last.

By 
https://www.entrepreneur.com/article/424751
 
Opinions expressed by Entrepreneur contributors are their own.
 

In an ever-changing business landscape, we’re seeing how important it is to have authentic leadership development that is built to last. Those who have successfully developed their brands have learned to strategically apply what they know about themselves as individuals to create more meaningful connections with others — connections that ultimately drive business success every day.

Authentic leadership style isn’t hard to spot. Whether it’s Mark Zuckerberg speaking at the Facebook Town Hall in a hoodie, or pajama-clad Jeff Bezos raising awareness of childhood cancer, we can usually tell when a leader is being authentic — and when they’re just showing up in sweatpants or a lab coat or wearing a tuxedo to an event, because it was a condition of entry.

 

To help cut through some of the noise and confusion around these topics, the focus here is on answering two key questions: What is authentic leadership development? And why is it important?

What is authentic leadership?

While the definition of this concept has evolved over time and may take on a different meaning to each individual, many agree that it is simply being yourself — in the workplace and life in general. It means acting consistently upon your core values so you can be trusted by your community.

What authentic leadership is not:

  • Being your true self regardless of consequence (i.e., anger, insults, etc.)

  • Intimidating or taking advantage of people for personal gain

  • Being completely transparent about everything in your life

  • Focusing only on the needs and wants of yourself and pretending that you care for others

  • Presenting an outer image that is incongruent with the inner image

Authentic leadership development begins with building trust and vulnerability between yourself and your team members. To build trust in yourself as a leader, it’s critical that you are truthful — and that includes admitting when you are wrong or do not have all the answers. You must also be able to communicate honestly what you expect from team members while simultaneously listening to their ideas as well as concerns they may have about projects or working relationships within the team.

Related: 22 Qualities That Make a Great Leader

Characteristics of authentic leaders

Authentic leadership characteristics stem from the philosophy of being true to yourself and your principles, which in turn leads to more positive work environments and more effective teams. But what does it mean to be authentic?

  • Self-awareness: the ability to understand your own thoughts, emotions and behaviors.

  • Transparency: the ability to be honest and candid — especially when you’re wrong or make a mistake.

  • Emotional intelligence: self-regulation, motivation, empathy, social awareness and good relationships with others

  • Empathy: understanding what someone else is feeling or thinking (in order for you to be able to help them)

  • Open-mindedness: having an open point of view that allows you to receive different ideas or information without being judgmental

  • Self-reflective: looking at oneself objectively on a regular basis and giving sincere feedback about how you could improve or do things better next time

How do we create authenticity?

When we think about authenticity in leadership skills, we have to ask ourselves, “How do we create authenticity?” That is a great question that can take many forms. How do we create authenticity in our leadership style, in our leadership behaviors? But most importantly, how do we inspire authenticity in our leadership team?

There are many answers to these questions, but the most common unifying theme for all of them is that it takes time, intention and practice. The first step is understanding what authentic means. For the sake of this, I’ll use this definition: Authentic = unfiltered — unfiltered expressions of who you are as a leader. In other words, be yourself. That’s what creates authenticity.

Related: Why It’s Crucial to Walk the Talk as a Business Leader

How to be an authentic leader

Your leadership brand is made up of a complex dynamic — like how you behave, react and interact with different groups or individuals in diverse situations, and how you as a leader interact with others to produce outstanding results.

Authentic leadership skill is a style of leading that emphasizes the importance of being honest and sincere in your dealings with others. It also means being prepared to be vulnerable, keeping your word and admitting when you are wrong.

  • Be honest and sincere: Authentic leaders find ways to convey their genuine intentions through words and actions. They use transparency and honesty to build trust among team members, eventually transcending it to the larger audience.

  • Be prepared to be vulnerable: Authentic leaders, like Martin Luther King and Nelson Mandela, were able to accomplish great things because they were prepared to be vulnerable enough to take risks ahead of their peers in order to make change happen.

  • Be consistent: Authenticity means that you say what you mean and do what you say! Authentic leaders don’t go around telling people one thing and then do another. Authenticity and credibility arise when consistency occurs between what you say and do. Your behavior (actions) should always match your words. If not, correct it and make it congruent.

  • Be clear about your core values: What are the core principles that guide how you live your life? What are the guiding principles for how you work? What matters most in life? When people understand what’s important to you, they know where you stand on certain issues or topics, which helps them better understand your decisions or actions.

Businesses and authentic leadership

In the age of misinformation and disinformation, authentic leaders are becoming the new CEOs, and being authentic is a powerful way to differentiate yourself from your competition. Authenticity brings out the best in others, which means nothing will hold you from achieving your mission. Not only does authenticity make people better as individuals, but it also makes for stronger company culture and greater productivity overall.

Finally, authenticity is the foundation of trust — and if there’s one thing every business needs, it’s to build trust with its stakeholders! This article attempts to help you learn how trust and authenticity outlines some of those benefits here, so they’re top-of-mind when making decisions about how you want your brand represented in any given situation.

To sum it up, it’s also critical to understand that leadership does not just mean being a leader in the workplace. It means being a strong leader who truly makes a difference regardless of the space he or she is in — that includes your family and friends, your community, everyone and everything.

 

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5 Habits of a Highly Effective Coach

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Being a great coach is about more than just mastering technical skills. It’s also about developing the right habits.

https://www.entrepreneur.com/article/424744

By 
Opinions expressed by Entrepreneur contributors are their own.

Whether you’re a business owner, CEO, manager or team leader, coaching is essential to your success. It’s how you develop the people around you. With an effective skill in coaching, you can create a high-performing team that can rapidly increase your growth. It is a leadership skill that is needed in order to achieve greater things in a shorter amount of time.

However, this is only true when coaching is done right. How can you become not just a coach but a highly effective one? Below are five ways to do just that:

 

1. Be a great listener

The number one habit of an effective coach is to become a great listener. In order to coach someone, you need to understand them first. This requires being present and fully engaged when they are speaking. And to truly excel at being a great listener, you should pay attention to your question-to-statement ratio. Are you asking more questions? Or are you making more statements? Your question-to-statement ratio should be heavy on questions and less on statements. There is a reason we have two ears and one mouth. Try to get them to talk and open up about what’s going on. The more information you have, the better you can help them.

Related: The 5 Essentials to Effective Coaching

2. Don’t make excuses

Effective coaches are people who can be accountable for their every action. They take full responsibility for their life and their business. This means that you have to be 100% accountable with zero excuses. We can never escape from mistakes, because it’s a part of being human. We will always have lapses, but it’s how we own up to it that counts. It’s not about covering it up with an excuse. It’s about taking full responsibility, admitting that you’re not perfect and choosing to move forward with a plan. It’s all about choosing to be accountable, not just in success, but also in failure.

3. Practice authenticity

Being an effective coach means that people can trust you and your words. For that trust to grow, it requires you to be authentic. This means that you have to be yourself. You can’t put up a persona and try to be someone you’re not. People can see through that, and it will only create more problems in the long run. In this age, where everything is easily accessible online, it’s only a matter of time before you are revealed for who you really are. It’s important to build relationships with your team members based on trust and respect. This can only be done when you’re being authentic with them. I believe that the formula to building trust is authenticity x time. So, always be authentic and show up as your real self.

4. Don’t forget to be the guide

A lot of coaches forget the reason why they are called a coach. They make everything about themselves and stray too far from their main purpose. They make action plans based on themselves and forget to take into account the people they are supposed to be coaching. An effective coach always puts their team’s growth above everything else. They understand that their success is dependent on the success of their team. This is why they make it a habit to guide people and help them grow. It’s your job as a coach to make sure that they are always moving forward and progressing. If you’re not doing that, then you’re not just ineffective, you are not doing your job as a coach.

Related: How to Become a Coach That Makes a Real Difference

5. Always lead yourself first

Oftentimes, people try to lead others without leading themselves first. This is a recipe for disaster. How can you lead others when you can’t even lead yourself? You can’t expect others to follow you if you’re not even leading yourself in the right direction. You have to be willing to put in the work and invest time in yourself, because if people don’t see the growth you are talking about, then they won’t believe you. You have to walk the talk and show that you’re willing to do what it takes to grow. Always prioritize your personal growth, and make sure that you’re moving forward. Only then can you start leading others and helping them grow.

 

To become a highly effective coach, you have to understand that being a coach is more than just a job, it’s a lifestyle. Anything that we want to impart to others should be ingrained in ourselves first. We should know that our habits are a big factor that drives our results, and we should make sure that we embody the qualities we preach about. We have to live it. This is how we can become not just a coach, but a highly effective one.

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5 Reasons to Write a Business Plan

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https://www.entrepreneur.com/article/239405
 

In their book Write Your Business Plan, the staff of Entrepreneur Media offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors offer five reasons why someone would want to write a business plan and what they’ll use it for.

Anybody beginning or extending a venture that will consume significant resources of money, energy or time and that’s expected to return a profit should take the time to draft some kind of business plan.

But there are many reasons to write a business plan, including the following five:

1. You want to start a business.

The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many great companies had their starts in the form of a plan that was used to convince investors to put up the capital necessary to get them under way.

 

2. You own an established firm and are seeking help.

Many business plans are written by and for companies that are long past the startup stage but also well short of large-corporation status. These middle-stage enterprises may draft plans to help them find funding for growth. They may feel the need for a written plan to help manage an already rapidly growing business and to convey the mission and prospects of the business to customers, suppliers or other interested parties. A business plan can address the next stage in the life process of a business.

3. You need to determine your objectives.

There are so many options when it comes to starting a business, including the size, location, and, of course, the reason for existence. You’ll be able to determine all of these and so many more aspects of business with the help of your business plan. It forces you to think through all of the areas that form the main concept to the smallest details. This way, you don’t find yourself remembering at the last minute that your website still isn’t developed or that you still have most of your inventory in a warehouse and no way to ship it.

4. You’re trying to predict the future.

It may seem dishonest to say that a business plan can’t predict the future. What are all those projections and forecasts for if they’re not attempts to predict the future? The fact is, however, no projection or forecast is really a hard-and-fast prediction of the future. The best you can do is have a plan in which you logically and systematically attempt to show what will happen if a particular scenario occurs. You’ll use your research, sales forecasts, market trends and competitive analysis to make well thought-out predictions of how you see your business developing if you’re able to follow a specified course. To some extent, you can create your future rather than simply trying to predict it by the decisions you make. For example, you may not have a multimillion-dollar business in ten years if you’re trying to start and run a small family business. Your decision on growth would therefore factor into your predictions and the outcome.

5. You want to use it to raise all the money you’ll need.

A business plan can’t guarantee that you’ll raise all the money you need at any given time, especially during the startup phase. Even if you’re successful in finding an investor, odds are good you won’t get quite what you asked for. There may be a big difference in what you have to give up, such as majority ownership or control, to get the funds. Or you may be able to make minor adjustments if you cannot snare as large a chunk of cash as you want.

In a sense, a business plan used for seeking funding is part of a negotiation taking place between you and your prospective financial backers. The part of the plan where you describe your financial needs can be considered your opening bid in this negotiation. In a way, a business plan is an excellent opening bid — it’s definite, comprehensive and clear.

But you know what happens to bids in negotiations: They get whittled away, the terms get changed, and, sometimes, the whole negotiation breaks down under the force of an ultimatum from one of the parties involved. Does this mean you should ask for a good deal more money than you actually need in your plan? Actually, that may not be the best strategy either. Investors who see a lot of plans are going to notice if you’re asking for way too much money. Such a move stands a good chance of alienating those who might otherwise be enthusiastic backers of your plan. It’s probably a better idea to ask for a little more than you think you can live with, plus slightly better terms than you really expect.

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Navigating inflation in retail: Six actions for retailers

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By Kari Alldredge, Becca Coggins, Ryan Drassinower, and Jesse Nading
https://www.mckinsey.com/industries/retail/our-insights/navigating-inflation-in-retail-six-actions-for-retailers