Business leaders who have walked the walk say it takes more than an idea and subject-matter expertise to build a successful business.
For starters, your business idea must pass the litmus test: Is there a need? Is there a potential revenue stream?
“People may say they love an idea and think it’s great, but make sure they will pony up for it,” said Donna M. Introcaso, founder/executive vice president women&CANCER magazine. Introcaso speaks from much experience, having served on the executive management teams of iVillage, Newscorp/Fox and Winstar Communications, which she helped to take public.
She said to assess the marketplace and its demand for your product or service. Also assess yourself.
Ask yourself if you are ready to work on a business, and not just in a business, said Erica Peitler, leadership performance coach and chief executive officer of Erica Peitler & Associates, Inc., a leadership coaching firm and author of "Open Up and Say Aaah!".
Before getting started you have to work on you, according to Peitler. A big company name is no longer your instant credibility shield.
“The first thing people are ‘buying’ is brand you,” said Peitler, who was the youngest member of the global management team for a $2-billion consumer healthcare organization prior to starting her coaching firm.
Introcaso and Peitler offered the following tips for would-be entrepreneurs to get “started up” and running:
Develop a plan; don’t just dive in and try to deliver:
Ideally, said Introcaso, start and work the business while you’re still employed for at least three, ideally six months, to get a good idea of whether you can sustain yourself. Create a client list and develop two to three anchor clients so they’ll be on the scene the moment you step out of your job.
If you’re downsized and don’t have that luxury, determine how long you can financially afford to take some time to make a plan, said Peitler. Then work on the critical first step of defining and refining what your business is and how you’ll go about creating value for you clients.
Consider business and leadership coaching. Leaders are developed as much as born:
Coaching will help you develop a business plan, solicit investment dollars or work on your executive presence and communication skills, the last which Peitler rates integral to business success. Using emotional intelligence to build relationships enables you to ultimately apply your subject matter expertise. Peitler said she’s seen really bright people communicate beautiful ideas that get “lost on the floor” because of poor communication skills.
Give clients contracts:
This ensures that everyone has the same understanding of the deliverables.
Barter, but only in the very early stages of the business:
In exchange for a word-of-mouth reference, give products/services to at least some clients free for a month. Then look to them to pay for it, said Introcaso. People value what they pay for.
Ask questions and listen, especially on client calls:
Avoid boring prospects with a lengthy description of your background. Determine their needs and pain points, offer feedback and work to develop “a collaborative understanding,” Peitler said.
Don’t hire. 1099 Them Instead:
Introcaso said this improves revenue and controls cost. It also provides flexibility to call on these contractors as-needed. Consider, too, that people love incentives. Offer heavy revenue generators a piece of the business (stock) for reaching targeted goals.
Need money to run the business. Turn to angel investors, e.g., friends and family:
Introcaso said as a small business owner you should be mindful—do your homework—if and when you go the venture capital route, because you may be in a situation in which you’ll be giving away equity. Pay back is still a requirement of the friends and family plan, but at least you’ll be left with the fruits of your labor.