Entrepreneurs go into business for a variety of reasons, yet they all have one thing in common: they are passionate about something. It might be a passion for baking pies, or a passion to democratize the Internet. It is that initial passion that fuels long workdays and sleepless nights. While you would expect the hard work to be over once your product is launched or your business opens its doors, it never quite is.
In fact, growing the business is often harder than starting the business. That is when business savvy really comes in handy, but it is also a time when passion can get in the way. Being so passionate about what they set out to do oftentimes blinds entrepreneurs from what is needed to succeed in business.
Here are 4 rules I have learned to adopt to succeed in business:
- Numbers are Everything
Yes, you went into business because you had a passion, but being in business is more than just following your passion: To really succeed and turn your passion into something greater than a hobby or an interest, you have to be smart about how you run your business.
That is when knowing and understanding numbers can equate to success or failure. When you first start out, numbers may not mean much because you are more concerned about the product or the service you are offering. However, numbers are key to keeping you in business. Whether you are looking to expand your business or deciding on how much you can afford to spend on rent for your retail shop, numbers are critical for marking smart decisions.
As an entrepreneur myself, I have had to make hard decisions based on numbers. Sometimes I realized that what I thought was a great idea made no sense at all when you looked at the numbers. No matter what type of business you are running or looking to start, be sure to understand your numbers from the get-go. Knowing your costs, labor and margins will help you make smart choices.
- Never Lose Money
This one I adapted from Warren Buffet. Entrepreneurs often take great risks to make things work. Yes, risks are necessary at the beginning. You might need to take out a loan or leave a perfectly good job in hopes of making it. Even after you launch your business, you will face challenging decisions that might be financially risky. No matter where you are at in the process of building your business, you should always be taking calculated risks.
As entrepreneurs, it is important to never lose sight of your bottom line. It is easy to get blinded by our passion and dreams. Unless you are funded, staying in the black is key to staying in business. And even if you do lose money, be smart enough to recognize this and turn things around.
I had to make some hard choices to keep a healthy balance sheet. From reducing expenses to cutting services, I needed to determine what decision made the most financial sense. At the end, I am blessed with a business that has been alive and well for over a decade.
Stay focused on your bottom line and you will make it to the finish line. Remember, if you are looking to stay in business for a long time, you should treat it like a marathon and not a sprint.
- Market Like a Shark
Business owners who are just starting out often are too close-minded to see everything around them. “If you build it, they will come” is often the attitude passionate business owners take. After all, you have put in a lot of energy and passion into making a great product or business, right?
This is an ideal scenario. In reality, keeping your business running, whether that means more sales or more customers, requires just as much focus on distribution as the product or service itself.
When I first started my business, I was often baffled by why some customers chose some of my competitors, knowing that I could confidently offer a much better service. I soon realized that it was not my service or customer that was the problem; the problem was that my competition was killing it in marketing and sales.
Growing your business means constantly working on your business. Focus on marketing and awareness just as much as you focus on your product or service and you will see great results.
- Do Not Wait for Perfection
Entrepreneurs tend to be obsessed with getting things right. If we are following a passion, it only makes sense that you want to do everything perfectly. However, I have learned that waiting for perfection can often end up disappointing you. Imagine if Apple had waited until they had a perfect version of the iPhone — we would probably still be waiting.
Whether you are working on packaging, new features or top-of-the-line speed, do not let perfection get in the way of doing business. Jumping in head-first is often more important than having something perfect from the beginning. Remember that you can always improve your product or service as you go along. Why do you think software updates are coming out all the time?
Obsessing over perfection can often hinder growth. Worse, it can let your competition get ahead. Be conscious about what is important and do not fuss over the small details.
Although I have been running my own business for over a decade now, I am just as passionate as I was back when I first started it. Every day I face challenging decisions, but I always keep these four rules in the back of mind. They have helped me focus on making educated decisions that have helped grow the business. And passion — combined with smart business decisions — can only lead to success.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
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