As any founder knows, lessons learned early on in the business startup journey can pay dividends at a later stage. Those valuable learning points and light bulb moments also make useful tips and advice that can be passed on to help other new entrepreneurs as they embark on their business ventures.
Prepare for customer remorse, and deal with it.
Small businesses are often told to chase the money and forget about the value. As a portrait artist, John Bentley knows that for many clients his services are a luxury purchase. This year, having photographed over 800 people, families and pets, he started analyzing why they invested in his remarkable work.
“Many paid a reduced session fee and got a discount on their prints,” he says. “In reality I was only giving good value because it was a reduced cost. Others would ask the price and balk at the £129 ($167) session fee: what if they didn’t like the pictures?”
When a friend of Bentley’s pointed out that ‘you wouldn’t expect to pay to view a new car, or a new house, so why would you expect people to pay a session fee to have their portrait taken and then pay more to purchase them?’ he knew he had to rethink his approach, and to eliminate buyer remorse from his business, scrapped the session fee.
“Clients now pay a fully deductible deposit if they order, which is fully refundable if they don’t,” he says. “We give them an amazing studio experience, complete with drinks and chocolates; they have a great time, which creates great memories. Their images are presented to them as printed proofs; memories they can see and touch. I no longer discount anything, and instead add more value to what they are purchasing. No more buyer remorse.”
Be fluent in financials.
Doing the accounts is a task that many business owners dread; something that just has to be done when they can find time in their busy schedule. However, Sian Lenegan, founder of digital agency Sixth Story, believes that entrepreneurs who take that approach are missing out on valuable business opportunities.
She says: “Rather than seeing it as a chore, business owners need to see their accounts and finances as a story, one that can help them uncover opportunities for growth if they spend some time getting to grips with the numbers. There are resources out there that can help, and I used evirtualFD, a virtual FD service for small and medium businesses.”
Embrace outsourcing and automation as early as possible.
In the early stages of starting a business founders can often feel stretched to breaking point; doing more than they thought humanly possible and juggling plates like a circus performer. But as Karlene Agard, senior risk and value management consultant at ARAVUN, discovered, once you have a consistent flow of clients, you’ll find that you’re repeating a number of tasks regularly. This is the time to start embracing automation.
She explains: “I started a YouTube channel and wound up working eight hours for a client, traveling for over three, recording and interviewing over half an hour and then transcribing and uploading it for over an hour. I was exhausted.”
Her decision to outsource to an assistant freed up her time and enabled her to focus on things that could create greater revenue for her business. “Time is the only resource we can’t get more of, so treat it with care,” she says. “Automation and outsourcing will enable you to work on your business and not just in it.”
Identify your North Star metric.
The North Star metric is the metric that best captures the core value your product delivers to your customers and should be closely tied to your company’s overarching vision.
“You need to define your North Star metric as early as possible and use it as a basis for all of your major business decisions,” says Sami Benchekroun, cofounder and CEO of Morressier, a platform for early-stage research. “I wish someone had told me that before I started my career in entrepreneurship. Having this metric in mind now helps me to keep a clear head when the going gets tough and to make rational decisions for my company instead of relying on my emotions.”
Innovation does not mean invention.
This is a concept that has caused much confusion among owners of new businesses, as they invent and then seek others to determine if value has been created.
“Innovation says that the market, the competition, the customer base and the business challenges and opportunities are all understood,” says Bill Holtz, President and CEO of web security solutions company Comodo CA based in New Jersey. “Innovation within this context is paramount to ongoing success and business existence. If a company is not innovating, it just means that there is a huge opportunity for an existing or new competitor to enter and cause discontinuity in the market.”
Debt is not your friend.
A lot of new businesses carry debt in the belief that they will make enough money in the future to pay it off, but as Nicholas Rumble, founder and CEO of Curaizon points out, for many this is always the case.
“You have to manage debt carefully and be clear about how it will be serviced and when it will be repaid,” he says. “In many new businesses debt can snowball out of control, so unless you can justify taking on the debt using all the factors discussed here, then don’t. Debt makes you vulnerable and reduces your ability to adapt or cover unforeseen circumstances.”
Attention to detail is no small detail.
First impressions matter and that unquestionably includes the impressions created via written communications, says Carolyn Crandall, chief deception officer and chief marketing officer at Attivo Networks, a cybersecurity startup based in Fremont, California.
“In today’s 140-character and text-based world, it’s easy to fall prey to sacrificing grammar or professionalism for convenience sake,” she says. “However, every message you send will reflect on you and the quality standard that you hold for your business.”
Misspellings and lack of attention to detail can be a turn off, and a hasty reply on mobile will not only reflect poorly on you and your standards, it could also cost you the business outcome that you were seeking, she adds.