According to a recent study released in May 2017 by Kauffman Index, the Startup Activity Index, in 2013 was at its lowest point in the last 20 years. Nowadays, it reached close to the peak before the drop of the Great Recession going up 3 years in a row.
While things may be different on a collective note, it is quite interesting to see that the number of female entrepreneurs in America is increasing faster than the number of male entrepreneurs. The Golden Age for women entrepreneurs has been starting since 2007 where the number of white-women owned businesses has increased by 10.1% whereas the number of companies owned by female Asian entrepreneurs has increased by 44.3%.
The National Women’s Business Council owned by Carla Harris is celebrating 10 million strong this month.
With 9.4 million firms, women now share 30% of total national firms in the US.
On the other hand, the small businesses are increasingly becoming popular in Southeast Asia. It is not a matter of gender-based differences but a matter of becoming an opportunist. Cities including Houston, San Francisco, New York City, Washington DC, San Antonio, Dallas and Atlanta have introduced various women empowerment schemes in recent years under the term ‘Mompreneurs’.
It is not that every fresh entrepreneur becomes successful. There are many Dos and Don’ts which you need to learn to become a part of the successful group of American entrepreneurs. Here is what you should do and what you should refrain from.
Don’t Expect Instant Success – Do Stick to the Business
Justin Kan from Justin.TV believes that 90% of start-ups fail because the entrepreneurs don’t stick to them. They are discouraged, attracted to other things, or start feeling less interested with time. According to Justin, start-ups commit suicides when their owners lose interest in them. For him, a dark today represents a brighter tomorrow.
It is important to stick to your business, establish small goals, and keep achieving them to win over the big goals one day.
Don’t Ignore the Roles – Do Take Guidance
When Dijiwan Company was folded, one of their leaders said this.
‘A good product idea and a strong technical team are not a guarantee of a sustainable business. One should not ignore the business process and issues of a company because it is not their job. It can eventually deprive them from any future in that company.’
Dijiwan had a good team, good products for the market and a strong strategy to beat the competitors. Why did it fold then? Companies fail when they ignore the ‘boring’ roles even if they are fully equipped with all essential tools.
A majority of the companies have different roles for different responsibilities. For example, the sales team is responsible for sales only and the manufacturing team looks into product manufacturing. But departments are integrated in the form of network of Managers and Heads of Departments.
The case of small businesses is different. You need to take responsibility of all jobs including interesting and boring ones. Since you cannot be a master of all trades at once, you need to seek guidance from experts. There are many small business communities to help you like National Women’s Business Council, which helps fresh female entrepreneurs.
Don’t Let Investors Dictate to You – Do Your Own Research and Prepare a Strategy
A majority of seasoned entrepreneurs who take investments from venture capitalists, investors, and commercial banks tend to have a love-hate relationship. On a frank note, both are being reasonable from their perspective.
The investor wants revenue as he is the one pouring money into your business. But you, as an entrepreneur, may be looking forward to establish a prominent position in the market in the next ten years. Investors also want a profitable exit for which they want you to rapidly spend the invested amount. Problems occur when the goals of investors and entrepreneurs collide.
‘Slow and steady wins the race’ is how you can define a small business that would last forever. So, it is important to be wary of the moneyman and make sure that the investor doesn’t dictate business decisions to you.
There are two ways to do this. Firstly, you should approach an investor with a clear business strategy and convince the investor that nobody other than you can understand the field of your business. The second option is to sign the contract with a condition that YOU will be the authority to take business decisions.
The first step to prepare a good strategy is to do some research about your idea and products in the current market.
Talem Advisory is a New York based start-up consultancy enterprise. Einas Ibrahim, the founder says that a majority of fresh entrepreneurs make mistake by working on a business idea without looking into its market demand.
Market research will also enable you to find out the most suitable type of investor. Ibrahim says that if the worth of whole market is less than $500 million and you want to establish a multi-million dollar business, then it is not worthwhile to seek investment from a venture capitalist.
Don’t Dream Out of the Box – Do Make Decisions Before You Have to Make Decisions
Dreaming big is good unless it starts affecting your business. Many small business entrepreneurs feel discouraged just at the beginning of their business because they are unable to achieve their million dollar plan they dreamt before starting the business.
Quote taken from the book, ‘Success Notes from a Maharishi’
In simple words, your final destiny is your big dream but to put your business on track and make it run, you need to focus more on small goals. For example, if you have just started a small side business with $1000, then focus on making $10 profit daily instead of $100 or $1000. This way, you will recover your invested money in 3 months and 10 days and then you can think of stabilizing your business or expanding it with more investment.
Leonard Green, the entrepreneur of The Green Group believes in having a plan about how the business will run before starting to run it. He says, ‘It is a form of making decisions before you have to make decisions.’
The most important business decisions are the ones you make while making the strategy. For example, The Green Group is a New Jersey based consulting, tax and accounting LLC firm. Leonard green tells that from business structure to compensation policy, he had already taken decisions about everything in advance.
Again, make sure that the investor’s decisions don’t affect your business decisions. For investor, sales may be more important but for you, covering rents, paying bills and giving salaries may be the priority.
Don’t Skip Calculations – Do Savor the Journey
You may not be a math fanatic but calculations are necessary when it comes to a successful business. Calculations include everything from your initial investment to taxes, salaries, bills, machinery, insurance, revenue, compensations and profits.
For every business, there is another type of calculation i.e. estimating the success rate. A Wall Street Journal blog starts by saying that Start-up companies are born to die. Not really. Every successful company was a start-up company once. The blog continues and tells that measuring your success can save your business from dying, we agree!
To measure the success of your business, there are different techniques.
- Firstly, you can render services of a business accountant to estimate the success with respect to your business goals.
- Secondly, you can calculate the success by manually discussing business elements with an expert, which does not always result in reliable results due to difference in opinions.
- Finally, you can take help from online software like Odds of Success Calculator.
The success of a business is also explained in terms of the time you invested. As a start-up entrepreneur, you have limited resources, limited time, and big goals to achieve so should you work 24×7? Actually, no!
Successful business owners savor the journey by maintaining a balance between business responsibilities and personal life and invest limited time and limited resources to derive results. They don’t feel discouraged this way.
A careful assessment of all your plans and actions in the light of given tips will help you establish and grow a sustainable business. Remember that although 90% of businesses fail, there is a good number of (10% to be exact) businesses which become successful. Set your goal to be a part of the elite 10%.
Success and all power to you!