Five things you should know before starting your first business

Abby Hardoon presents some words of wisdom to consider prior to setting up your own company.

With the first green shoots of the World Wide Web sprouting at the end of the 80s, few but the most enlightened sages would have ever predicted the dramatic changes it had in store.

In the 25 years I’ve been in the technology business, the world has shifted so remarkably that it is now all but unrecognisable from how it looked before. These days, there are not only fundamental differences in the types of businesses that are being created, but in the way they are being started, the way they look to grow, the global opportunities they have access to, and also the unparalleled levels of competition they face.

There’s no doubt that with great changes come great opportunities but finding and successfully exploiting those opportunities isn’t for the faint hearted and requires a healthy combination of intelligence, foresight, elbow grease and good old fashioned luck.

In my experience, the majority of entrepreneurs, who have devoted themselves to creating and building businesses, wish they could go back and impart some pearls of hard-earned wisdom to their younger selves. Since none of these entrepreneurs have come up with a viable time travel device, the next best thing might just be to pass along some of the biggest and hardest lessons learned to the next generation.

Be the smartest guy in the room

That’s not to say you’ll always be brighter than everyone else you meet, but those looking to start a business, need to know the market they’re getting into inside and out, front to back. Who are the existing competitors, what are their strengths, weaknesses, where are the opportunities, where are the main challenges going to come from.

Educating yourself as much as is possible about the environment you’re looking to do business in, will not only prepare you well for what’s ahead, but instill confidence in all those around you, whether they be potential investors, or key team members looking to join you.

Recruit wisely

The trigger for the creation of a new business is an idea. Whether it comes from frustration with an existing product, passion for a market or a need to innovate and disrupt, once an idea grabs hold, it can set in motion a compulsion to see it through to reality.

Ideas are, however, just that, ideas. While they can be a great catalyst, they do not make a business. Great businesses are created by great people and therefore, recruiting is one of the most important things a business will do.

The truth is, people are multidimensional. They may be many temperamental, antagonistic, belligerent and hotheaded but at the same time, responsible, charismatic and brilliant. They will be a businesses biggest asset or a drain on time, energy and resources. Choose wisely and reward generously.

Be a know it all and make it happen

As well as running one of the most lucrative companies on the planet, Facebook founder, Mark Zuckerberg also happens to be able to sit down and write computer code as well, or better than, any of the highly paid, and highly skilled programmers on his staff.

Knowing how things work in your business from the ground up is as essential as mastering delegation. When you understand exactly what you’re asking another person to do, you will not only command their respect, but quickly be able to correct mistakes from the outset.

My late father once told me; there are three types of people in this world, those that make things happen, those that wished things would happen for them, and those that just don’t know what happened! I’ve always been advocate of the first choice.

Not every decision one makes in the business will be the right one. Learn from bad ones and don’t make them again! All successful people have made bad decisions – it’s having the courage to get up and try again after falling over which leads to the greatest successes.

Always benchmark and react

In order to understand if things are working, it’s essential to implement some form of benchmarking to a business. Understanding the position of the leaders in a market, those your business aspires to be, and regularly comparing your business to theirs, is a good way to start.

KPIs (Key Performance Indicators) should be established as a basis to navigate your rise. The exact nature of these will vary depending on the business but whether they be; new customers per month, numbers of website visitors or income from returning customers, by tracking these results and benchmarking against competitors and past results, entrepreneurs can get a detailed and immediate sense of where they are winning or losing and where a course correction is needed in the business. Once an issue has been highlighted, don’t procrastinate – react to the information you have and act on it!

Love what you do

Small businesses are a beautiful thing. They are agile, unencumbered and fearless. They also demand blood, sweat and tears of their leaders and staff alike. In my experience, it’s imperative that you love what you do. If you don’t, the chances are, you’ll never have the strength and courage to see it through.

Further reading on starting a business

What makes a successful entrepreneur?

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