A business can help you be your own boss, acquire financial freedom, and attain your financial goals. However, you may face failures or stumbling blocks if you do not first understand the key concepts of entrepreneurship. First of all, it helps if you start a business that you’re passionate about. Here are more insights into how to start a profitable business. ~ Ed.
I was out of money. I couldn’t find a way to pay my bills — my dad had to fund all my expenses. But how long will you ask your dad to pay for everything?
That was in 2011 when I was in college. I was tense as I didn’t have any income. I couldn’t think of any way to make a couple of bucks, so I called my American friend.
“Can you please help me make money?” I said it with a slight tremor in my voice. He could sense my suffering and hired me as his virtual assistant. And within a few months, I was making more money than the professor standing next to me who was teaching me how to do business!
So, you want to start a business and you may be asking yourself: “Do I need to learn everything about “business” before I start?” The answer is definitely “NO!” You can see from my story how I started a business before I even knew anything about it.
Starting a Business
My belief is that entrepreneurship is something that you can’t do by learning from an article or a book. So, why do I still choose to write articles about this topic, something you can’t learn from? Well, I just want to help you learn from my personal experiences so you are better safe than sorry when you land into this uncharted territory of entrepreneurship.
One of the many lessons I’ve learned from interviewing a lot of entrepreneurs is that you should learn and develop a long-term learning habit. It will help you in the long-run.
I’ve spent nine years in business now, and I’ve failed in business more than a hundred times. Failure is not a problem at all. If you don’t fail, that means that you don’t take any action and if you don’t take any action that means you don’t have the option to succeed. Business has taught me how important it is to take action.
4 Steps to Start a Profitable Business
Once you get into business, I recommend that you at least know about these four core concepts, because this is where your business begins.
Mindset
Research shows that ideas pivot, business models evolve, and customers come and go. The North Star in your business, always, is you.
I see many people thinking about how good they think their business ideas are and how they think those ideas will make them money. I’ve been stopping them for a while and asking one question: “Why don’t you just get a job?” If their reason is that they think business will make them rich fast, then I tell them that “… business isn’t for you!” They don’t have a mindset that will see them through the tough times.
“Mindset is everything. Your Mindset is more important than the business you do. A proper mindset will keep you on track to never, ever give up on yourself or your Dream. Remember, everything was in the acorn in the beginning, as it is with everyone,” said Richard Petenaude, founder of Student Billionaire, while giving an interview to me.
In certain situations, people want to do business because they believe those who do business are more successful – and it’s true that business gives you independence, but you shouldn’t forget that it is filled with challenges.
For example, how many businesses are in trouble due to the current pandemic? So, you’ve got to take care of your mindset before you even think about starting a business. That will help you later when you’re stuck in such a situation.
So, before you get into a business, I suggest you first ask yourself if it’s really something you want to do – not because someone else has done it, but just because you want to do it for yourself.
Audience
Now once you understand your mindset, dive in to find your target audience. It is essential to define your target audience before building your product. This is where most people make mistakes. They make a product without knowing their target audience, and then once they are in the sales process, they end up discovering that there is no one interested in buying their product.
Have you ever asked yourself why this happens? I used to ask myself this question often, and I found an answer: we usually create a product caring about ourselves and we don’t give any attention to our target audience needs.
So, most of the businesses care about themselves and their products and you would find them bragging about how good the product. But it is not about you. It is about who you are selling to.
The simple approach to do this the right way is to first figure out how to define your target audience, then see what problems they have, and then build a product to solve the problems you discover.
It’s a matter of solving a problem. What kind of problem would you solve for them? You’d have to do extensive research about it. The best way is to do a survey, but you can also go to different blogs and read the comments to see what problems people are facing. Keep investigating, and then decide what interest you have in making a product that will solve their problems.
Without understanding your target market, no matter how effective a product you’ve made, it just doesn’t matter. Find the target market that will pay for your products by building a product that solves their problems. Don’t forget about it!
Product
For every business, having the right product or mix of products is essential. Without a product to sell, well, you don’t have a business.
A product is the most important part of your business. But can you have a business without a product?
Yes! You can sell others’ products if you don’t have your own. Alibaba and Amazon are the most renowned examples of this. You can either build your own product or sell others’ products by having a distribution business.
It must be something you love doing and have a huge passion for. Running a business is hard, and if you don’t like what you’re doing, then you won’t last. If you lack passion, then you might as well get a job (even if you don’t like it). At least you’ll have more financial security.
Besides being passionate about, when choosing a product or service to start a business, you need to make sure that there is a need for it out there.
There are some key differences between Product and Service businesses. If you’re unsure about which business idea to pursue, or are already thinking about how to expand your mix of products to include both Products and Services, then it’s helpful to understand those differences.
While a product may require much time and money to make the business profitable, the service businesses can be started overnight and be profitable. But of course, a product-based company would be more valuable. The product and services businesses have their own pros and cons.
Business Model
When jumping into the business, many people get lost in the complexity and don’t know what the business model entails.
They concentrate on their products and think more about the innovations that will help them build their products. While the business model is one of the most overlooked aspects of a business, it is more critical than anything else.
Whether or not we know it, we use a business model in every business. A business model is a framework built in your mind that enables you to succeed. It’s about how the business works, how it plans to accomplish its goals – and how it makes profits.
Lewis has simplified this concept as – “All it really meant was how you planned to make money”. You simply make a conceptual structure of your business to achieve your desired goals. It also means how you map the value for your customers.
Business is about making profits, and if you don’t make a profit, then you are out of business. And, to make any income, you have to be determined in your mind to follow your plan to make money.
One of the most persistent problems I see is that many people just jump into business, and only try things. They start a business about coaching, start learning how to build their own websites to save money, and then they get lost. They’re no longer focused on building a coaching business; they’re more interested in a website business!
So, create a business model, a plan for your business to make a profit, and focus on it – it is one of the most fundamental things to do.
Conclusion
You’re not supposed to start a business because you think it will make you a lot of money; instead, do business because you feel a calling for it. Listen to yourself, and don’t try it until you hear that voice inside of you saying, “I want to do business!”
It’s a long journey of rewards and challenges, often both at the same time. And as you are open to your reward, you also have to be as open to your challenges.
It is like your baby, and you have to take care of it in all situations, including good and bad times. Make sure you are clear about your target audience, as they are more necessary than anything else. Then satisfy the target audience by helping to fix their most irritating problems.
And focus on your business model – you’ve got to take care of that, too!
Over to you
Did you start your own business? What is your advice to make it profitable? Do share your tips and experiences in the comments.