People want the freedom that comes with working for themselves. According to The Hill, more than 582 million people worldwide are in the process of starting or running their own business. And in today’s technology-driven society, it can appear that just saying you are an entrepreneur means you are one.
Having a title and creating results are two separate things. Behind every entrepreneur is a story of patience, sacrifice, and dedication. Real financial success takes a combination of time, strategy, and focus. But the reward can be massive: 62% of all billionaires are self-made.
Most entrepreneurs take a large financial risk to launch their product or idea. This capital might come from savings from a previous job or an inheritance. And in most cases, the passion to bring an idea to fruition far outweighs the start-up costs.
Unexpected expenses will arise as you grow your idea, even if you are an excellent planner. Many of the world’s most successful entrepreneurs operated for years before turning a profit. It’s estimated that new businesses take around three years to become profitable.
But there are things you can do to help generate income from your business idea. If you believe in your concept and there is a market need, there’s no reason you shouldn’t be able to achieve success. You just need the right dosage of optimism and hard work. So as you plan how to grow your business this year, here are a few tips to apply to make sure you thrive financially as an entrepreneur.
1. Have a clear business plan.
To thrive financially, you need a business plan that streamlines your visions and goals. It might not be the most exciting part of the job, but it will give you some solid ground to start from as the journey winds and turns along the way. A well-thought-out business plan will also help you get investors (which we will talk about later). Knowing where you want to go and having accurate data to back up your decision-making is incredibly important. You need to understand your core values, analyze your profits and losses, and have a road map as you continue to build. If you don’t want to commit to a full business plan, at least create a strategy map.
2. Invest in both traditional marketing and paid social marketing.
The world is on the internet, and over 87% of purchasing decisions begin with online research. While there is likely an audience for your idea, there is also too much competition for you not to be strategic in your marketing efforts. Make sure you understand your target market (which you will have identified in your business plan) and think of unique ways to get in front of them. Also, note that not every audience actively uses social platforms in the same way. Know where your demographic lives online and how they behave. It will inform how you spend money and provide you with a higher return on investment.
Be sure to tie offline marketing efforts into your overall strategy. As a small business, it’s important to concentrate on your local market in the beginning, including using local SEO. People make purchasing decisions based on how a product or service will integrate into their everyday life. Traditional marketing techniques will allow you to connect offline with customers who will be more likely to genuinely connect with your business and, in turn, help drive sales — 92% of people trust referrals from people they know.
3. Find your superfans.
This concept has been trending in music marketing for some time, but it should also be adopted by entrepreneurs. The idea was articulated by Kevin Kelly, the founding executive director of Wired magazine. It states that to be a successful creator, all you need is 1,000 true fans. A true fan is someone who will buy anything that you produce. If they spend $100 a year on your products and you have a direct relationship with them, then you will make $100,000.
While your dream might be to have profits in the millions, your initial goals should be to build a customer base and turn a profit. Once you’re able to make a sustainable income and build long-lasting relationships with true fans, you’ll understand what is and isn’t working with your business. Then you’ll have something you can really expand exponentially.
4. Know when to let go.
This is one of the most difficult things to do as an entrepreneur, but since you are your own boss, you also have to be your toughest critic. Not every idea is worth investing in, so be smart about when to say no. You should always conduct a SWOT (Strength, Weakness, Opportunity, Threat) analysis of every idea.
This will provide some clarity about its potential. Knowing when to abandon an idea will help you thrive financially because you’ll be working toward goals that have the potential to yield a profit. Make sure you have someone who can help you decide when to say no if this is something you don’t think you’re good at.
5. Understand your value.
Because our business ideas are often our passion projects, we can forget to put the appropriate value and pricing on what we are doing. Make sure you charge enough money for your product or service so that the margin is high enough to create a profit. Don’t oversell, but make sure you don’t undersell. Having positive cash flow will allow you to think more clearly about what it is you want to achieve and give you the funds to get there.
Working with other entrepreneurs is a great way to reach new clients and customers, especially as data continues to make it harder to reach people outside your niche market. Partnering with like-minded individuals who are paving their own path can open your business up to an entirely new audience.
Collaboration boosts innovation, and will also provide you with fresh sources of inspiration as you see the way others conduct their business. This process will enhance your mind-set, present new marketing opportunities, and connect you to others who are committed to this journey of entrepreneurship.