CA Aniruddha Phene is an entrepreneur at heart and is a keen observer of various trends and patterns in the marketplace. He is an avid reader and is always updated about the smallest of the things that take place in the commerce world. He is a keen observer of the stock markets, consumer market trends, political environment, government policies, laws, taxation, education industry trends and business news.
School is a place where a person spends most of his growing up years. This is the place where the foundation of a person’s personality is laid. Unfortunately, schools fail entrepreneurs every day. They train you to study hard and get a good education, so you can land a good job. They don’t prepare you to start your own business and how to manage it.
First generation entrepreneurs are people who are first in their family to start their own business. They lack a business background. There is no one in their family to guide them. Most of the time their families don’t support their business ventures. Business is a passion that doesn’t allow a person to work under someone’s authority. It is a calling that has to be answered with a risk-taking appetite. Businessmen are a different breed. They want to start something of their own. They don’t like to work for someone. They have a certain amount of careless confidence in their own abilities. They know in their subconscious that they can do something that is against the tide. They don’t like to do things that everyone else is doing. They are trendsetters. First Generation Entrepreneurs have to struggle much more than a next generation entrepreneur who has a family business to back him up. A first-generation entrepreneur has to learn from his own mistakes and avoid making those mistakes again.
Here are seven things that a first-generation entrepreneur needs to know:
- Once you take a leap there’s no looking back
Many businessmen focus on the exit strategy. Remember it’s a one way traffic. There’s no going back. Once you decide that you want to do a business you have to keep going. There might be times you think that you made a wrong decision, but always know that this is part and parcel of the businessman’s life to think so. You are not alone. You have to survive your worst days.
- Manage your finances well
Money is always short and it will never be enough. But you have to pay the bills. Focus on your monthly finances. See to it to have adequate cash for the next month to pay all your expenses for that month. If you have excess cash, don’t keep it idle. Invest it till you need it. You have to keep investing your surpluses. These investments will help you get through the bad periods.
- Be debt free
As far as possible don’t take any debt capital. Don’t take loans to run your business unless there is no other option. Use your cash flows to run your business. Key is to increase your monthly cash flows. If this happens you won’t need any debt. Expansion plans also should be debt free. Remember borrowers make their bankers rich and not the other way round.
- No fast expansion
Many successful businesses failed because they expanded too quickly. Don’t make that mistake. You have to build a solid business before you can expand. Your current business might be on a small scale but the key is not to make it large scale as fast as possible but to sustain it over a long period. The longer you are in business the more invincible you will become. That is when you expand.
- Avoid Fund Raising from Venture Capitalists
Nowadays every startup is looking for an investor to fund their businesses. This sounds cool but is definitely not. You lose control of your business when you take on an investor. Then it is all about managing the investor’s expectations and keeping them happy. If you have a good business idea, try to grow it on your own. If you want funds you can raise them from your family & friends. Give them a small stake in your company. They will be happy & you will be in control. It might take longer to scale your business but at least it would be yours. When you have built a solid business, you can think of raising funds through the capital markets to fund your expansion plans.
Businesses survive on profits. One of the mistakes entrepreneurs make is they focus on profits from day one. In the initial years focus on the revenue. Try to increase your sales and keep your costs low.
In the first 3 years of your business don’t look for profits, but try to grow your cash inflows. Avoid unnecessary business expenses. You will start making profits sooner than you expect.
People do business with people they know. If people don’t know you, how will they buy from you. Marketing your business on the right platforms will give you a brand presence. Not every post on your facebook page needs to get you a lead. People should keep seeing your business name. They should know that you exist & what are your offerings. They will come to you eventually. And ultimately your customers will get you more customers if they are happy with your service. Nothing beats a good reference. And good references are always shared.
Business is like a jungle. Here only the fittest survive. You have to be strong & smart here. The best business education is not in the business schools but in observing and learning about things happening around you. A person has to be a good observer to do a good business. He needs to learn new things every day to stay ahead in the game.
It is a hustle that never ends. But it is the hustle that takes you places.