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This post was written by Athan Slotkin, CEO of The Shadow CEO.
Corporations are having a hard time filling jobs after the global health crisis left millions unemployed, in addition to completely redefining workers’ idea of job security and ultimately, the meaning of living and working. Instead of working for big company contracts, many want to launch their entrepreneurial dreams or dabble in the freelance world. Paralleling the uncertain economy that’s driving people towards self-employment, young grads who can’t find work also have a unique opportunity to delve straight from student to entrepreneur or business owner. Where do business beginners get started and what businesses are needed right now?
Tip 1: Pick a business that has large profit margins.
Margins translate to profit. Profit is why you run your business, even though you of course want happy customers as part of that. However, as business owners, things always happen: a surprise cost, an increase in price from a distributor, a change in cost of goods or services. Equally, overhead is always a part of every business, including employees, contractors’ rent, and other expenses. As a startup, you don’t have the luxury of having a high-volume, low-margin business. It will take time to get to scale and even then you may not be in a volume-centric industry. So before you do anything, make sure that every unit you sell has more than enough margin to get your business towards overall profitability.
Tip 2: Pick a business that you are an expert in or willing to become an expert in.
Core competencies are what will drive your business. However, as a leader, it’s extremely valuable for you to understand the nuance of your business’s operations. Therefore, you must either have the knowledge of your business or be willing to become an expert in the business. In the beginning, you will have to do a lot of it yourself. There will be fewer people and you’ll have to take on more as a leader and fill those gaps on the team. But even when you do grow and have more team members, people might step away and you will once again have to step in. You need to be able to do that and avoid missed opportunities, unhappy clients, or sleepless nights. However, most importantly for all of this, it will make you a more effective leader. Whether it be a technology business or automotive shop, if you know the technicals of what your team is doing, then you’ll be able to lead more effectively and make better business decisions. You’ll also be able to promote the company passionately and intelligently, giving your team the drive and determination you desire to make your company thrive.
Tip 3: Think mid-to-long term.
Building a business is not a sprint, it’s a marathon. Your job is to start with an “unscalable” foundation and then figure out how to scale what you’re offering more effectively. It will take time to get to the scale that you want. There’s no such thing as an overnight success; even those that look like overnight successes took a lot of work to develop and build. Be patient.
Tip 4: Know your numbers – financials, including “unit economics” – inside and out.
Unit economics refers to how much revenue and how much cost you have with selling one unit of your product or service. It’s the lifeblood of your business and finances. You must know this and your company’s numbers inside and out. You need the capacity to lead efficiently and make impactful decisions on an everyday basis, including how to optimize time, when to start new initiatives, and whether you can afford to hire someone. And it cannot be a thorough exercise each time. In 2021, we, fortunately, have online learning, YouTube, and a host of other resources at our disposal. If you want to be an entrepreneur, numbers are the center of it all.
Tip 5: Utilize technology.
It is your friend. Fortunately, we’re in a time now where everything is accessible online to learn about via YouTube, online videos, and classes. So, if you don’t know now, it’s time to learn. And you can’t afford to resist technology. All businesses — physical and digital — will have automation at the core in these coming years. It’s happening everywhere so it’s crucial you fully understand how automation can fit with your business. The evolution towards business automation is making businesses more competitive and will afford you the opportunity to have better financials, consistency, and margins for your business.
Bonus Tip: You are your brand – get yourself out there!
Understand social media, use it, and shamelessly self-promote. You have to get comfortable showing off your business, yourself, and dig deep into why you created your business and why it’s worth something to the world. If people don’t know about the business/product/service, they can’t buy it.
Taking these tips into consideration when starting up your business will surely benefit your company and help you achieve the success you have been striving towards. You may not be able to make a fortune overnight, but you will be on the track to unimaginable achievements and accomplishments. It is worthy of notice for anyone who is looking to begin a prosperous and everlasting business.
Athan Slotkin is an American business strategist, entrepreneur, and former professional poker player.
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