South Africans don’t like making mistakes; we tend to associate mistakes with failure. But valuable mistakes are well-intentioned errors or failures, and are not always born of carelessness. If you are going to make mistakes, you should aim to make them as early in the development process as possible. Use them as a means of exploring as many options as possible and make them when it’s not going to cost you too much. Short-term failure can yield long-term success. There are valuable mistakes that you can learn from.
Mistakes, failure and imperfection have created life-changing explorations and “happy accidents”. Did you know that mistakes, led to the discovery of DNA, penicillin, aspirin, X-rays, Teflon, velcro, nylon, cornflakes, Coca-Cola and chocolate-chip cookies? A business that makes mistakes is not only trying jolly hard, but is also likely to end up with far more innovation at the end of the year.
George Bernard Shaw said it well: “A life spent making mistakes is not only more honourable, but more useful than a life spent doing nothing.”
That said, we don’t have to make all the mistakes ourselves, we can learn from those who have gone before us. So how do you make sure you learn from the past and the mistakes other entrepreneurs have made?
Here’s 5 mistakes you can avoid:
Starting a business without a market in mind, “hoping” that the market will approve and buy your produce.This is a common start-up mistake. A colleague of mine likens this to a person hearing about a party to be held over the weekend and excitedly spending time and money getting ready for the party (new wardrobe; hair, nails, etc.). Imagine their disappointment when they discover they don’t have the address for the party. Information and research are the key ingredients to getting to know your market.
► Target your market and find that pot of gold
Identifying your target market can be challenging. But there are some general rules and questions to ask of yourself and your business to help narrow things down.
Start by asking: “Who is my ideal customer?” Try to be as specific as possible. Exclude all people who might not make use of your product or might not have the money to do so. If you still find your market difficult to define, ask these questions:
- Do your customers speak a specific language?
- How old are they?
- What do they do in their leisure time?
- Do they have children?
- Where do they live?
- What type of dwelling do they live in?
- How many people in their household?
The answers to these questions will help you draw up a demographic profile of your clientele. Demographics are descriptors used to describe sub-markets. Other categories include gender, income and race. Try and answer the following questions too:
- How much must your customers be able to spend on your product or service?
- What are their common needs and requirements?
- What are they looking for when searching for your product or service?
- Who else might they buy from?
► Look to existing customers
Your existing customers are a fantastic source of information to help you pin down your target market. Straight off the bat you can assume that people with similar lifestyles, interests etc. as your current customers may also want to make use of your product or service.
But remember identifying markets is not always as easy as grouping people based on the sport they play or their age, going through a profiling exercise using the questions listed above will assist you in defining your target market closely. The insight you have into the characteristics of your existing customers will help you better understand your potential target market.
► Ask existing customers the following questions
- Where did they hear about your product or service?
- Did they visit your website?
- What are their demographic profiles?
- Do they fit the common descriptor of the market?
- What is it about your product or service that attracts them?
► Find your focus
Identifying your target market will provide a focus for your business and guide your marketing decisions. It will also:
- Allow you to reach a highly targeted audience;
- Minimise business risk;
- Facilitate the recognition of market opportunities;
- Makes customer acquisition and retention easier;
- Saves time and money;
- Makes it easier for potential customers to recognise and make use of your product or service.
It is said that every management decision has a financial consequence. Saying “that’s not my thing” is no excuse for not doing what is necessary to beef up your financial quotient. If you know you fall short in this area, you should consider doing a short, focused course on finances for non-financial managers.
► Plan, review and adapt
The financial management decisions you make have a direct impact on the efficiency, processes and resource management of your business. According to Gary Epstein, Managing Director at EasyBiz QuickBooks, you can optimise future growth opportunities by ensuring that you have your books in order all year round and have an accurate idea of their company’s expenses, budgets and projections at any given time.
► Know where you are
It is important to remember that businesses go through various lifecycle stages. While the majority of start-ups have to endure a period of negative cash-flow in the early stages, as a business becomes better established, the financial management process needs to evolve.
► Be flexible
With this in mind, you must set reasonable goals and be flexible to adjust these as the business matures. While your initial goal might have been to relocate to a bigger office in three years, for example, profits may be better invested elsewhere when the time comes.
► Keep your eyes open
Keeping a close eye on cash-flow patterns and forecasts play a major role in effectively reviewing organisational objectives and budget requirements or shortfalls.
All of us have the gift of 24 hours at our disposal, yet we don’t necessarily use our time effectively. Brian Tracey, bestselling author of Eat the Big Frogs First, gives streetwise wisdom on how to keep focus on the big challenges and avoid distraction. Look up a four-minute video called Do the big rocks first for some great tips.
Morné Stoltz, MiWay Head of Business Insurance, offers the following tips to help you keep your day on track:
►Set a basic time schedule, and prioritise tasks.
The first thing is to understand exactly what needs to be done – sometimes this is harder than it sounds – and then work out when you will do each thing. Part of the exercise will involve prioritising tasks, and many commentators advise doing the most important ones first. This approach also gives one a sense of accomplishment that can provide the motivation to get through less vital, but still essential tasks. In this way, you will use the time you have wisely and establish a sense of control. It is also wise to set time limits for tasks – only spend as much time as the task warrants.
► Create optimal work conditions.
Having established what needs to be done when, make sure you get through the work. Focus is essential, and you can help create it by reducing distractions. Basic techniques would be to put your cell phone on silent, close down unnecessary tabs on the PC, close the office door. It’s not possible to eliminate interruptions entirely, but unnecessary ones are very destructive. Similarly, keep your workspace clutter free: the appearance of order is soothing and conducive to orderly thinking.
►Work smarter, not harder.
As part of prioritising tasks, spend some time regularly looking at what you do and eliminate processes that are unnecessary, or streamline others. A related technique is to learn how to say no – entrepreneurs are by their nature people who see opportunities, and these can be distracting. Remember what is important and keep focused on that. Another technique for working smarter is to group similar tasks together. Get all the work related to figures done at once, and then make the shift to another mode of thinking, rather than trying to switch between unrelated types of tasks.
► Make the most of time.
Focus is critical, but take a leaf out of many top achievers’ books and start your day early, when your mind is fresh and there are fewer distractions. And why not use some precious weekend time sensibly. While weekends are important for recharging, it’s surprising how just an hour or two of work on a weekend can reduce the pressure for the following week.
► Habits can be great tools, or great hindrances.
Consciously identify things you need to do regularly, and turn them into habits. There are techniques for doing this. Once something has become a habit, it seems easy and quick to do. More difficult, identify bad habits that waste time, and set out to change them.
►Look after yourself.
If you are not physically and mentally at the top of your game, all the time management in the world will be in vain. Get enough sleep (seven to eight hours is needed), exercise regularly and eat healthily. It is also important to find activities that recharge your mental and spiritual batteries through periods of quietness. For many, this can be combined with exercise in a pleasant, natural setting – but finding time to be still within oneself is very important.
We can become too focused on getting things done, but life is to be enjoyed. Think of how to do the things you need to do in a way that is fun.
Starting a business that you are not passionate about is a big mistake. The journey of an entrepreneur requires a strong dose of passion to counter the many challenges you will consistently face. Webster’s dictionary defines passion as “an intense, driving or overmastering feeling of conviction” or “a strong desire for or devotion to some activity or concept”. Passion needs to ooze from your every pore. This passion translates into infectious enthusiasm, which ultimately feeds the energy and drive of every employee. Most importantly, this passion is the glue that holds the company together and gets it through its most difficult times. Steve Jobs asked the question: “What makes your heart sing?” What is the passion that will make your heart sing, and enable you to weather challenges?
Ask a group of successful entrepreneurs why they have achieved so much and they will come up with a range of answers. Some of these answers are to be expected; seeing opportunities and acting on them, perseverance and persistence; passion and commitment and so on. But one factor that comes up time and time again is a strong supportive environment. Whether this comes from your spouse, family, friend, a coach or mentor, don’t underestimate the amazing value of support. But, what if you struggle to find the support you need? Intentionally seek for organisations whose core business is exactly that supporting entrepreneurs.
Becoming an entrepreneur is risky no matter how you look at it. However, by seeking mentorship from seasoned entrepreneurs you will empower yourself to unleash your full potential. The more you know, the less you have to fear.
Steve Reid who heads up the Centre for Entrepreneurship for False Bay College and launched its Rapid Incubator Hub in 2016. Contact him at firstname.lastname@example.org or visit: www.falsebaycollege.co.za to find out more.