Updated: Sep 25, 2020
Business is great! it is true relationship between you and your customer and your end consumer. Business is building a relationship. In business you provide value and get paid. You got to have followers and fans and subscribers. If the business is designed right and you are lucky, you can be highly profitable. You have a money making tree in your house - you can get money anytime by just working.
IF you have a working business and relationship with your customers, you can turn your craft into money, and you can move products within your channel - you can enjoy huge gains and the joy of relationship. But business is hard for first time inexperienced entrepreneurs.
Business is easy, except for first time entrepreneurs.
However, there are risks especially for first time entrepreneurs (FTE). You may underestimate the difficulty and competition. and you do not understand the competition landscape or the cost of acquiring customers, even if you have a great product.
Here are four general advice:
There is no vacuum in business. There is no smart perfect ideas. You must investigate in the market.
If you have never done business on your own, you must acquire the business mindset of service, value, customer leading, and learning by experimenting.
Social media is a place to conduct business, not a place to build a business. It sounds low cost but it is really lean.
Just building a product or a solution is not automatically business. People may not want to buy. You must also operate and manage the store. A business is buy and sell. Making unique things to sell is not necessary to have a business going.
The top three reasons why business fail after 1, 3 and 5 years are:
You do not have enough capital;
You are under prepared but you did not know until after you start;
Experienced and dirty competition sneaks in.
Business risks are invisible and never told. Just because you don't perceive does not mean they are not there.
The biggest risks for profitability:
Customers don't want to buy your offering;
Customers do not come in large enough numbers for you to be profitable.
Your business can not expand based on cash flow.
Three critical elements of business mindset people:
they recognize competition;
they are humble and yet confident. They work hard to wait for luck.
they don't take anything for granted.
A special reminder for FTE entrepreneurs - if this is your first time in business alone, you need to calibrate your shots and don't expect too much. Business mindset is earned, like riding a bike or going into a pool for the first time. For your first startup, first in real business (instead of on a job or at a position), try to factor in a possible failure after 3 years. You will only know you have failed after three years.
About the author:
Chang Liu is passionate about entrepreneurship and teaching entrepreneurship . When he was a full professor at Northwestern University, he started teaching entrepreneurship to engineering graduate students in 2012 - it was a great hit with smart engineering students who were never exposed to business. Liu put everything in practice. He successfully started six companies (NanoInk, NanoSphere, Integrated Micro Devices, SensicFusion, TeenSharks startup school, and Seven Parallel Consulting). He has experience in product innovation, marketing, and end consumer store management. He is the author of four textbooks on both technical and entrepreneurial topics. He earned a PhD degree from the California Institute of Technology (Caltech) in 1996 in Electrical Engineering. He lives in Chicago, IL, United States.
TeenSharks.us Startup School: Free Entrepreneurship Guide and Startup Resources
SevenParallel.com Startup mentoring and consulting