The Unvarnished Truth: Navigating the Complexities of Entrepreneurship
I’ve heard many people, some even friends and close colleagues, talk about starting a business but fail to grasp the intricacies of what a business truly entails.
Of course, starting a business and threading the entrepreneurial lane can be a daunting experience at the very beginning. They are a lot one is unsure and you never really know how things will pan out.
Well, to get started on the right path, you have to get your mindset right, and one of the ways of doing that is to truly understand how it all works.
Hi there, welcome to #bizcoffee??
In this newsletter series, you’ll get to understand the intricacies of starting up a business and what it truly entails.
This post promises to be short, concise, and straightforward, this way, you’ll have zero dulling moments. Shall we begin:
So, what's a business?
This is a no-brainer question but for sake of clarity, I’ll quickly define it. A straight-jacketed answer to this question is:
“Business is any commercial or industrial enterprise that engages in the activity of providing goods and services involving financial, commercial, and industrial aspects.”
Now let’s look at a deeper definition of how a business is perceived by an entrepreneur.
A business is any activity that:
Going by this definition, if every process or activity is not present, then what you have isn’t a business. Perhaps what you got there is a hobby, an interest, a charity…but most times, not a business.
It doesn’t matter if you’re a solo entrepreneur or you own a startup, all the mentioned keywords must be present before you can boast of having a business.
Understand that every business must have its core elements otherwise it won't survive.
As defined earlier, a business is a collection of interdependent processes and elements that are iterated to produce and create profit for the producer.
For a business to succeed, it depends on various elements which act as pillars upon which every successful business is built.?And for a proper and effective running of the business, these elements must depend on other elements for the business to thrive. These elements are:
Value Creation
Having something of value that people will be more than willing to part way with their money is the first step to setting up a business.
Do you create or have what people need?
Is your product or services tethered to the needs of the market?
Does your product satisfy market demand?
Are there people who need what you are providing? If yes, then are they ready to pay to get it?
Know this, every business is created to provide or satisfy a demand or necessity. All the companies and big businesses have become household names today and became huge successes because they know what the market wants and they not only provide it but also satisfy the need of a large number of people.
By discovering and creating what people need or want, your business becomes value-oriented.
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Marketing & Adverts
A good and proactive business must attract attention, create awareness about its activity and build demand for its merchandise or what they’ve created.
So as a start-up, no matter how good or valuable your product or service is, if people are not aware of them, you will never sell.
To put this simply, any activity, be it paid or free that helps draw attention to the value you are providing is deemed to be advertising & marketing.
I’m sure you’ve seen celebrities and businessmen engage in a fake public feud just so they can bring attention to themselves and their businesses. Those are publicity stunts; they are not illegal.
Sales
Sale is the livewire of all businesses??. Selling means turning prospective customers into paying customers by persuading them to buy something from you
It is that activity that entails getting prospects to buy your products or subscribe to your services.??
After garnering attention to the value your business provides, you just don’t want them to know and leave. Of course not. You want them to know the value of what you sell, get them to buy, and even get them to tell everyone that they should also buy from you!????
So how you go about all this is what will constitute your selling strategy.
Value Delivery
This means exceeding or meeting the promise & expectation you promised on giving your customers and ensuring that they’re satisfied with the product or service rendered.
You say that your fancy footwears are not just fancy but that can last longer than regular footwear. Be sure to deliver on your promise.
Trust and Value Delivery are the adhesive agents that will bond your customers (both old and new) to your business.
Trust me, you don’t want to screw that up!??
Finance
Just as cars and machines need gas and oil to run efficiently, so does every business need money and cash flow to run efficiently.
Every business must maintain cash flow—that is, money must be going out (inventory and expenses) as well as coming in (sales).
If this inflow-outflow dynamic is hamstrung, then the business will be stagnant. It is either the business has finished products that are not being bought or the business cannot carry out its manufacturing operations to make sales possible, either way, it’s bad for the business.
Businesses must continue to remain afloat at all times by being cashflow positive and ensuring that it rakes in enough money and profit to keep it going.
These five elements are the basis of every good business and business plan. If you can clearly define each of these five processes for any business, you’ll have a complete understanding of how it works.
If you’re thinking about starting a new business, defining what these processes might look like is the best place to start.
If you can’t find or create these elements then you should try reconsidering the business idea.
In the next series, we’ll be looking at models a business can take.
If you got valuable insights from what you just read, or perhaps you have a question or contribution to make, please go right ahead and drop them, I’ll be more than happy to hear your opinions and even get to learn a thing or two from you.??
Thanks for reading.
Cheers????