Valuable lessons from entrepreneurs

In the past 15 years, I have had the privilege of meeting and interacting with over 200 business owners or senior executives within a business or organisation.

Many of them were pure start-ups, some were established in mid-sized businesses and others held “intraprenerial” posts within organisations.

The level of interaction differed, from meeting at an event or competition to intensive involvement through coaching or incubation inputs. It is particularly in the past seven years that I have shifted my focus to what makes for building sustainable businesses and resilient entrepreneurs and that is what I want to focus on in this article.

What did these men and women do differently to position themselves strongly?

Here are some lessons which can be gleaned from them:

Successfulentrepreneurs have differentiated their product.

They have taken considerable time and invested energy to clarify what makes them special, what makes them unique and different, or, in the words of author and speaker Malcolm Gladwell, “What makes them a purple cow?”

It appears as if successful entrepreneurs have narrowed their target market focus, rather than trying to please everyone.

In fact, assuming “the more, the merrier” when it comes to defining whom you are targeting is one of the biggest marketing mistakes an entrepreneur can make. A lot of time and money is wasted on marketing campaigns that try to be all things to all people.

Conversely, the target market cannot be too small either, as the startup needs enough customers to sell to without saturating the target market within its first months of operation.

Start a business with an existing market in mind.

Those businesses that have gone past significant milestones appear to have this attribute in common.

They started with an existing market in mind and considerable interest in the product or service they were going to sell.

“Market research is always a good idea, whether launching a new business or embarking on a new product line,” says Jayshree Naidoo, ex-head of Standard Bank incubator and a 20-year entrepreneurship industry veteran.

Unfortunately entrepreneurs are not doing enough of it, which results in a high failure rate.

It could be beneficial, therefore, to drill down with these questions on your market opportunity before you start:

What is the unmet need? (What problem are you solving?)

How big is this opportunity? (Is there a substantial market?)

Who else is trying to meet this need? (Is this business over traded, with many competitors?)

Successfulentrepreneurs refer to having a strong support base as an essential ingredient. Whether from family or friends, or from institutions like accelerators or people like mentors.

There is a lot of support available to the aspiring entrepreneur in the Western Cape. The budding entrepreneur may find support in the form of access to catalytic events (competitions); free or sponsored business advice and even be eligible to be a part of the accelerator/ incubator ecosystem.

Funding is also an area of great concern to start-ups. They are often ill prepared in approaching providers of funding or they simply don’t know who and where to go.

This daunting task may be made a bit easier through accessing the free website of Finfind at www.finfindeasy.co.za Finfind brings together the providers and seekers of small and medium-sized enterprise (SME)finance.

There is a well-known phrase from American businesswoman, Mary Kay Ash, that goes: “Ideas are a dime a dozen. People who implement them are priceless”.

Entrepreneurs who continue to succeed seem to be action oriented and implementers.

It is not too difficult to come up with an idea, but is it a great idea?

What constitutes a viable idea? How can you develop a good idea into a great one?

Here are three tests to see if your idea is great.

The Grandma test: Are you able to easily share your ideas with say your grandmother?

If your idea is easy to understand, chances are it’s more likely to succeed with customers.

The viability test: Does your idea offer real solutions to real world problems, and will people be willing to pay for it?

All new businesses need a sense of purpose. Are you trying to improve people’s lives in some way? What are the core differentiators of your business that set you apart from the next person trying to build a similar business?

The talk test: Have you tested your idea with both friend and stranger? Have you been willing to engage with those who think your idea soars and those who think it sucks?

Not talking to your potential customers raises your chances of failure substantially, so head out the door and start talking to people as soon as you can.

When I consider the reflections of successful entrepreneurs, networking appears to be an essential skill. When used consistently and purposefully, it can seriously increase your impact; raise your income and extend your brand awareness.

Here are some tips to building a growing network.

Aim to connect, not to sell.

People don’t attend a networking event to buy products or services. Uppermost in their minds is how can they build relationships and connect with others who may add value to their business and vice versa. Making this key mistake could alienate you at the event and leave you with the impression that “networking doesn’t work for me”.

Identify what you want to achieve and who you want to meet.

Another mistake that is made is to focus on quantity rather than quality. Most events last two to three hours with the networking section restricted to 45 minutes. Rather than distribute and collect business cards, aim to focus on six to eight new people or connections. These you need to leverage.

Follow up promptly. I have “discovered” business cards from events some weeks after the session. This is way too long to follow up in a meaningful way. It may be helpful to send a short, yet sincere email within 48 hours of the event.

Steve Reid is the manager of the Centre for Entrepreneurship at False Bay College. Email steve.reid@falsebay.org.za or visit www.falsebayincubate.co.za for more about the CFE.