8 Lessons You Should Know Before Starting a Business

8 Lessons You Should Know Before Starting a Business

April 16, 2024 | 2:53 pm

Turning your dream business into reality? Many entrepreneurs need proper guidance when starting a business to avoid costly mistakes. Mastering these 8 crucial lessons equips you to navigate challenges and set your venture on the path to success.

Whether experienced or starting out, every entrepreneur benefits from insights when launching and running a business properly. From finding your “why” to maximizing efficiency, it's the knowledge you wish you had before launching.

Dive deeper into these 8 game-changing lessons and embark on your entrepreneurial journey with confidence. We’ll show you how to not just survive but excel in the exciting world of business ownership.

Important lessons to know before starting a business

#1 Know your “Why”

Before starting a business, you must ask yourself, "Why are you doing this?" Your answer to this question will become your inspiration and compass throughout your business journey.

The "why" can be as simple as wanting to make more money, have more freedom of time, or follow a personal passion. Meanwhile, some are more philanthropic, such as wanting to serve specific groups in society or change the world.

If you haven't figured out your "why" yet, take the time to reflect on and articulate the driving force behind your business. Your "why" will inspire and guide you through strategic decisions that shape your business.

How do you find and understand your why?

Finding and understanding your why involves identifying the problem your business wants to solve and ensuring it’s relevant to your target market. These solutions could fill a market gap, ease a pain point, or improve people’s lives.

The ability to solve a real problem for their audience separates profitable and successful companies from the rest. Customers are also more attracted to supporting businesses that serve a greater purpose.

Start understanding your why by diving into these questions:

  • Why: Identify the overarching purpose or reason your business exists.
  • How: Think about how you plan to achieve or realize your “why.”
  • What: Show your audience that your products or services align with your main vision.
This is an image of a golden circle, which is a good guide for finding “why” you want to start a business and how you will achieve it.

Regardless of your "why," what's important is that it motivates you in your venture. The early stages of a business can be pretty challenging, and having a solid "why" reminds entrepreneurs to keep going and pushing through.

#2 The power of mentorship

Another essential tip for business owners is looking for a good mentor who can guide and advise them while running the business. Ideally, mentors are people you look up to in the industry and are seasoned or have extensive experience.

Benefits of a good mentor for SMEs

Don’t underestimate the power of a good mentor!

Here’s why a mentor is your key to overcoming business challenges and achieving goals:

  • Firsthand experience: Mentors share firsthand experiences - something you don’t easily find in a book or on the internet. The challenges they overcame can give you valuable insights on what to do or not to do.
  • Advice and guidance: Your mentor will be your go-to person when you need business advice on improving your value proposition, marketing, financial management, and more. They can help you set goals and develop plans to achieve them.
  • Emotional resilience: As an entrepreneur, you need to survive all the highs and lows in the business. But when things get extra tough, having a mentor as a listening ear and a shoulder to lean on can keep you pushing through.
  • Networking: Tapping into your mentor’s extensive connections can open doors for your business. Meeting more people through your mentor could help you find potential clients or investors who could grow your company.

How to find a business mentor?

Finding a business mentor is about building a strategic partnership.

The first step is to identify your business goals and desired path. Then, you can narrow down which entrepreneurs or experts have career or business paths that align with yours.

A mentor should also be someone who inspires you and can advise on things specific to your business industry.

If you can’t think of anyone instantly, don’t worry! You can start by networking through LinkedIn or in-person events, like conferences. Make sure to get to know them genuinely to foster a connection built on trust and shared aspirations.

#3 It doesn’t have to be perfect

An image that says It does not have to be perfect. You just have to START.

One of the most common mistakes aspiring entrepreneurs make is waiting for their business to be perfect before launching it - having the perfect logo, website, marketing materials, and product or service.

When new business owners wait too long for perfection, they stall their progress and lose opportunities to grow the business further.

It may seem counterintuitive, but launching your business even when it isn’t perfect helps you identify critical areas for improvement and move closer to the “perfection” you want to achieve.

Dropping the perfectionist mindset doesn’t mean it’s okay to be sloppy or hasty in making decisions—it simply means you shouldn’t let imperfection stop you from taking the first steps.

Furthermore, remember that mistakes are simply feedback you can use to improve.

Many people have brilliant ideas, but the thought of them needing to be perfect prevents them from getting started. Separate yourself from the rest and just do it.

#4 Don’t do everything alone

It may be tempting to do everything on your own, especially when you’re on a tight budget.

However, when it’s too much, and you’re spreading yourself thin across many functions in the business, you should start asking for help and delegating tasks.

In business, one of the things entrepreneurs should learn is to let go. Look for trusted experts and delegate tasks to them that you don’t enjoy or are outside your expertise.

This way, you free up time to focus on things you’re good at, which would further grow your company.

Getting help from others also lessens the risk of burnout, slowing the business’s progress.

Why SMEs should outsource tasks?

Taking on all business tasks by yourself can be exhausting. At the same time, hiring full-time employees straight from the bat might also be expensive.

A good middle ground to keeping business expenses low and business productivity high is to outsource to professionals or contractors instead.

Outsourcing tasks is a real game-changer. It lightens your load and lets you concentrate on tasks that highly impact revenue generation, such as product ideation or improvement and increasing customer satisfaction.

For example, outsourcing business registration allows you to focus on your passion, not paperwork. Finding an expert who can register your business and all the legal requirements quickly and accurately means you can get right to what matters most: building a thriving business and serving your customers.

OneCFO's popular offering is Business Incorporation Services, which include end-to-end business registration in the Philippines.

You can also tap into specialized talents when outsourcing tasks. An example is bringing in a seasoned fractional CFO to handle your finances. By doing so, you can be sure that they’ll do the job right, and you’ll only pay for the help or services you need, saving you more money.

Know more about how fractional CFOs help SMEs grow their business by watching this video:

#5 Don’t undervalue your products or services

New business owners often undervalue or underprice their products or services because they lack the confidence to demand what they deserve, do not fully understand the competitive landscape, or fear losing customers.

The price of your products and services should reflect your worth and market conditions. Underpricing is a disservice to your business. So, ensure that you are charging a fair and sustainable price.

To set the right price for your products, assess your business goals and conduct market research. Clearly communicate the value proposition to customers by setting prices based on perceived value, not just production costs.

7 key factors in pricing products and services.

Pricing can be tricky, especially for new entrepreneurs. But remember that pricing your products and services is not a one-time thing but should change as the business evolves.

As you gain more experience and feedback, you’ll build confidence in setting the correct prices that are satisfactory to your growth and customers.

#6 Be open to learning

Successful entrepreneurs are open to learning from others—whether they are customers, employees, fellow business owners, or just regular folk.

The voice of your customer matters most. Connect with them directly and gather valuable feedback. Ask about satisfaction, improvement areas, and potential referrals. Their insights can fuel business growth.

Moreover, entrepreneurs can gain crucial insights from their employees, even as bosses.

Set up regular check-ins and ask if they see anything worth improving or changing in the company. Asking employees for feedback also makes them feel valued and increases job satisfaction.

Most importantly, it’s essential for business owners to get themselves out there and network. Meet people at business events or ask fellow entrepreneurs for a quick chat. You never know what you might learn when connecting with others.

Ensure there is demand for your product or service

The entrepreneurial journey involves continuous learning, and market validation is one of the most important lessons.  It’s tempting to jump right in with your brilliant idea, but before you invest everything, take a step back.

Does your product or service solve a real problem for a real audience? Market research helps you validate demand, refine your offering, and avoid costly mistakes.

Studying industry trends, your competitors' offerings, and potential gaps in the market will help you make well-informed decisions about your offerings' viability and how to position them.

Another approach you could take is launching fewer products first to gauge initial interest and gather real-world feedback. Use these reviews to address any issues and further improve your offerings before scaling it fully.

#7 Invest in efficiency

Most business owners hold back on paying for tools or software since they can be expensive upfront. This decision may be okay when you’re in the early stages and only have a few transactions in between. But when you’re gaining traction and spending most of your time on grunt work, it’s time to shell out some money to be more efficient.

Buying or subscribing to software seems costly, but they are an investment that will pay off in the long run. By becoming more efficient, you give yourself more time to work on tasks that require your expertise and eventually improve your customers’ experience.

An example is using all-in-one finance solutions like the OneCFO app to streamline your finance processes. With just a few clicks, you can generate and share financial reports, process payroll and tax returns, organize documents, and securely chat with your team.

User-friendly interface of the OneCFO app - an all-in-one finance solution

#8 Prepare a financial plan

A comprehensive financial plan helps your business prepare for any potential issues and maximize every opportunity that comes your way.

Here are the key steps you can follow in preparing a financial plan:

This image lists the key steps to creating a financial plan for your business.
  • Define your goals and objectives: Outline your business’s long-term and short-term goals and what you’ll need to achieve each of these goals. For example, if your long-term goal is to increase your annual revenue, you might need additional staff or more advanced equipment.
  • Build financial projections: Create financial projections using data from your startup costs, operating expenses, and expected sales. It’s best to have projections for both best-case and worst-case scenarios to be ready for anything and manage your finances accordingly.
  • Factor in potential setbacks: Some examples of business setbacks are delays in product development, fluctuations in supplier costs, and economic downturns. These setbacks can be unpredictable, so it’s best to set aside some buffer for unexpected expenses.
  • Develop financing strategies: If you’re in a cash crunch, you can quickly gather funds in many ways. Before the need arises, it’s best to evaluate your options, such as loans, crowdfunding, investors, and more, so you won’t have to scramble when you require additional capital.
  • Monitor and adjust: Regularly review your financial plan to see if you’re projecting your cash accurately and if it's still aligned with your goals. Adjusting your strategies is essential, especially when new information or issues arise.

Be ready for emergencies

Most entrepreneurs need to remember to set up an emergency fund. This fund helps you weather slow months in the business and pay for unexpected expenses.

An emergency fund should cover three to six months of expenses. This fund gives you more peace of mind, knowing you won’t need to shut down your business when things get tough or scramble for the first job you can find when you suddenly need money.

Building this fund is more challenging than it sounds, so you may also choose to have another stable source of income while still establishing the company. It is best to save up before quitting your day job.

Your roadmap to entrepreneurship

The entrepreneurial journey is an exciting adventure filled with learning and growth. You’ll equip yourself to navigate challenges and build a thriving business by embracing these lessons and fostering a continuous learning mindset.

Remember, even the most successful entrepreneurs make mistakes. The most important thing when building a business is not to give up when times get tough, to keep testing new ideas, to get feedback from people, and always aim to grow.

Furthermore, business problems can be challenging, but having a trusted partner beside you, like OneCFO, will make things more bearable.

OneCFO is your partner for financial growth, providing you with reliable bookkeeping, payroll, tax, and CFO services. At OneCFO, we understand the intricacies of starting a business and are here to guide you through all the financial challenges that come with it.

Don’t let the fear of missteps hold you back. Take the first step today, and watch your business dream become reality.

Visit us at onecfoph.co or email us at [email protected] to learn how we can help you launch and grow your business.

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