Craig Goodliffe, CEO and Founder of Cyber backer.
If you are considering embarking on an entrepreneurial journey because you want to run your own business, then stop. I understand the appeal of being your own boss. There’s a lot of freedom in it—much more than working for someone else—but if you’ve set your sights on running your own business, you haven’t set them high enough.
Starting a business is not the goal you should aim for. Instead, your goal should be starting a successful business.
Forgive me if the distinction seems clear to you. I want to make sure you get started the right way. in 2021, more than 5 million business applications have been filed in the US That’s a lot of entrepreneurs, but there will also be some who don’t succeed. Statistics show that 20% of startups fail in the first year. 50% fail within five years. While there are plenty of possible reasons for a business to fail, many of them boil down to the founder not doing his homework before getting started.
If you want to make sure your business is successful before you start, I’ve got some homework for you. It involves grappling with three questions that I believe all aspiring entrepreneurs should answer before embarking on their entrepreneurial journey.
Question 1: What problem do I solve?
The best companies don’t sell products; they sell solutions. Therefore, before embarking on your entrepreneurial journey, you should ask yourself what problem your product or service is solving. This is a critical question to work through, because if you can’t solve someone’s problem in the end, there’s really no room in the market for whatever you’re trying to do.
As you consider this question, it can help you consider the magnitude of the problem your product or service is solving. In other words, how much consumer pain is associated with not having your product or service available? The less pain, the harder it will be to get people to buy, subscribe, or whatever action step you try to get them to take. The greater the pain, the greater the need. If you have the solution to a problem that is causing a lot of pain to many people, chances are you can use it to build a successful business.
Question 2: What makes my product different?
Sometimes the solution that will launch you on your entrepreneurial journey is something entirely new. The digital camera is an example of this. Photographic film was a problem. It was costly, ruthless and time consuming. Instead of figuring out how to make a better movie, some smart people have come to Kodak created a product that completely eliminated the need for film.
Your product or service doesn’t have to be revolutionary, introduce a new technology or innovate an industry, but it should be different from what is already available. If it’s a new take on a product or service that’s already available, it must be a better new take. It must be unique.
Before embarking on your entrepreneurial journey, you need to know your absolute, true-blue, end-of-the-day . determine value proposition. Without a unique value proposition that sets you apart, it’s too easy to get lost among all the other products and services out there looking to be the solution to the same problem.
To address this issue, price is the first place most businesses go. They set up their value proposition as cheaper than all other options. However, before copying this strategy, keep in mind that a better price is not always what the customer wants. The low price can be an attractive advantage, but is not necessarily a solution. Your ultimate goal should be to provide excellent problem-solving service at a slightly lower cost than your biggest competitors, while also offering much more value than the competitors are offering.
Question 3: How are you going to scale and hire the right people?
You may start your entrepreneurial journey alone, but you can’t go on that long. You need people to help you on your journey, so don’t wait too long to think about how to scale and hire the right people.
The ‘right’ people aren’t just the ones who have the time and the skills. As an adamant entrepreneur who is passionate about something, you have to surround yourself with others who share the same passion.
If people aren’t there because they care a lot about the company, then they’re probably just there to collect a paycheck from you. They’re not the kind of people who can help your business succeed, so don’t waste time building relationships with them. The right people are the ones who connect emotionally with your mission. I’ve seen great business ideas fail because the founder hired people who weren’t involved with the company.
So, there’s your homework. Keep dreaming about owning your own business, but don’t settle for a business that won’t succeed. Make it successful by making it helpful, unique and positioned for growth.