We all want to be an overnight sensation when we build a small business. We all want to have a business like Papa John’s or Apple. Many of us know, however, that that kind of success is pretty rare. But while being that successful as a small-business owner is unlikely to come in a short amount of time, it is not impossible at all to becoming a successful entrepreneur within a few years with the right business, hard work and a dedication to outstanding customer service.
Oh, and cash, too. Every successful business takes money, but I would never suggest you start taking out business loans as soon as you decide to convert your little garage-hobby into a full-fledged business. Nowadays, though, it seems that business success isn’t just measured by the profits; it’s measured by the interest of those investors featured on the ABC show “Shark Tank.”
“Shark Tank” is the very popular business-investment show, where upstart entrepreneurs approach the panel of five business investors and ask them to invest money in their particular business. Sometimes none of them will bite; sometimes one will bite; and other times two or more of the investors will partner up to help, depending on the viability of the business model and idea.
Some businesses turned five-figure profit the previous year; others turned seven figures in one year. To even be featured on the show and have a chance to gain investment money, each business has to have a unique concept or model and the owner must or should have an idea how to continue to grow the company and in what ways.
As you can see in the below infographic, the Sharks invest in all sizes and types of businesses and many times, those businesses become much more successful.
While you may have your own profit goal, the measure of success nowadays is whether the “Shark Tank” investors want to hear about your idea. And that may be the ultimate for any business. If you get investment capital from a Shark, that means you have arrived and a very smart man or woman believes in what you are doing and will put faith in you.
But how do you get there, in the Tank, from your humble little garage? Here are some suggested steps to growing your small business properly and becoming a successful entrepreneur.
Becoming A Successful Entrepreneur: 11 Tips To Guide You
#1. Make A Realistic Budget
Launching a business effectively will take money, but you still want to earn a profit or something close to it to maintain viability before you explode in consumer consciousness. To do this, you should first compile a budget each month for what your income is and what your expected outgo will be.
At the start, you should very much consider going cash-only and not taking out any business loans until you know you have the profitability to afford the loan payments on an accelerated schedule. Many companies have grown cash-only; it just might take you a little longer to be successful. Patience is truly a virtue here.
#2. Make A Business Plan
At the start, this plan doesn’t need to be more than one or two pages. But later, when you actually do look to “Shark Tank” or other potential investors, your business plan will need to be fleshed out in greater detail, especially the part about financing and cash flows so potential investors can see if they will get return on their investment.
#3. Get Registered
Every business has to be licensed sooner or later in order to operate. A key step for becoming a successful entrepreneur is to check for the steps to get licensed at the local, county and state level so you are in compliance if and when an issue comes up with a local vendor or client. With the license in place, you can then go to any financial institution or credit union and open a simple checking account for your business, so you can keep business and personal expenses and taxes separated much more easily – which then helps bookkeeping.
#4. Put The IRS On Notice
Really. When you are a licensed business it might be a good idea to contact the Internal Revenue Service to get an Employer Identification Number (EIN). Even if you do not plan to hire any employees in the coming year, having the EIN in place will just eliminate any future headaches, especially if your business takes off faster than you think and you find yourself moving up your hiring schedule by a few months. Not having that number can make the IRS paperwork and tax forms take longer to fill out.
#5. Get Online
Most businesses reach high potential when they get out of their local area and join the Internet. You can start simple by developing a business e-mail account at first, and then expand that to buy a domain name for your business (for an annual fee), and then eventually build a website (the domain and website don’t have to go together; it’s important to buy the domain first so you hold it for when you are able to launch and maintain a website, which could get expensive depending on the complexity).
And while it might be tempting to take to Twitter, Facebook or Pinterest to spread the word about your business, it is much better to tie social media to the actual website after it is launched, not before. Before, you can use the business e-mail, your name and a summary of your services on a simple business card, and go from there.
#6. Shake Hands
While an online presence is great, there is nothing like face-to-face connections with potential clients. This is where networking is important. In many places, networking is more effective at becoming a successful entrepreneur than any other skill.
Get involved in networking groups like a chamber of commerce, small-business organization, Lions Club, or any other entity where you get to meet other business owners or professionals who just might be able to use your product or service, or would know someone to whom you could be introduced. But don’t just join; be and stay active. Community engagement is an effective marketing strategy.
#7. Show Flexibility
As you shake hands and mention your product or service offerings, you could get a vibe as to whether what you are offering is what the market needs. If not, see and understand where the market is; maybe your innovation is so radical that it’s too much of a leap. Find a step in between.
The point is, to be a successful entrepreneur, you have to be humble to understand your market and adjust your business to meet where the market is without being the same as everyone else. Find that spot where you stand out, and adjust your business model to exploit it.
#8. Underpromise, Overdeliver
The companies that do well and build their brands are those that serve their customers well. This means don’t promise to be over the top in service and meeting deadlines; actually deliver. When you don’t tip your hand early and focus on execution, that comes across as exceeding expectations, which puts a smile on your customer’s face and leads to positive referrals and more business.
This is probably the most overlooked tips for becoming a successful entrepreneur. If you can exceed your customers demands, you will be around for a long time.
When the business grows to the level where you just don’t have time in the day to even sleep, much less have dinner with your family, it’s time to hire people and delegate tasks to them.
Determine what parts of the business you really don’t like, or not as good at or find are the most time-consuming for you, and hire someone to fill that role.
If your business will grow faster with you out in front, then hire an accountant or bookkeeper. If you are better at watching the money and doing the administrative, then hire a front-line sales person to delegate that part of the business.
You can always start small with part-time work, but if you need to hire a full-timer right away, then you are essentially too late in expanding. “Shark Tank” investors won’t always like someone who is too conservative. Entrepreneurship is inherently risky, so you have to be willing to take risks, and maybe that means investing in an employee or two earlier than you might otherwise, but if it’s for the longer-term health and growth of the company, that move would be worth it.
#10. Know Your Expansion Plan
As part of your business plan, even if it’s not written explicitly, you should at least have mileposts in your business that trigger certain actions (when to hire new people, when to buy new equipment or supplies, when and where to get new clients, etc.). If you are going to ask the Sharks to invest in your business, they will want to see that any growth you have had or are anticipating is accounted for in your plan – that where you are in success is not a surprise and what comes next will not be a surprise.
Investors like to see that you knew the idea would be successful and that they know you have a grasp, and even some control, over when and how the company will grow in future years.
Sharks do take risks, but they are calculated, and if they sense that you are surprised by the success and you’re not sure how exactly to deal with future success, then they won’t invest because they don’t trust you.
As your business reaches certain milestones, be specific in what you are doing next to continue growing the business. When do you hire new people? When do you expand social media? When do you lease a bigger space?
#11. Know The Costs Of Expansion
Especially when it comes to leasing a bigger space because you need it, or if you are ready to open a new restaurant or a new location for your product, you need to know the cost involved. Often those brick-and-mortar decisions are expensive, so you will tend to be conservative in making those determinations.
However, if you just can’t grow anymore without a bigger space or a second (or third) location, then this might be where you consider the Sharks. At this point, you should have a good foundation of success that the Sharks can see for themselves. They then should see that you have done the homework to make sure your bigger space or new location is in a financially viable location and that you have the cash on hand to hire the people necessary to maintain that space or location and you have accounted for all the related expenses in terms of equipment and training for the location.
If you get to this point and you are very reasoned and specific about what you need and why, there is a decent chance the Sharks will ask you to present to them.
Putting It All Together
While there are some small details contained within each of these steps, this should at least give you a road map to get your business to the level where it can be an investable asset for the “Shark Tank” investors.
You have to be patient, creative, work hard, and be specific in each of your goals and expectations for your business. And maybe, just maybe, you can catch the eye of a Shark, and not be the chum.
Becoming a successful entrepreneur takes a lot of work and long hours. It’s not all glitz and glam. Small business owners are the hardest working people you will meet. So before you decide to jump in and start your own business, take the time to really think things through, so that you don’t end up a statistic, regardless of the size or type of business you are trying to create, even if that includes starting your own blog.