5 tips for successfully starting a business
This article was updated on June 5, 2024.
Written by Elizabeth Exline
Reviewed by听Kathryn Uhles, MIS, MSP,听Dean, College of Business and IT
At a glance
- Starting a business means adopting the right mindset. From there, think globally about your competition and what your advantage is.
- From there, you need to understand your customer, build a business plan and create a brand.
- There are many pitfalls to avoid when starting a business, including shorcuts and overpaying.
- Other tips include doing your due diligence and completing the necessary education.
Entrepreneurship is one of those words that can inspire an adrenaline rush of both terror and excitement. There's the promise of being your own boss, doing what you love for a living and, to some extent, finding validation that your business idea is in fact a good one.
But there's also the rather grim data from the听 About 20% of small businesses fail within the first year, and only about half make it to five years.
Ask the experts: How to start a business
According to Rose Lorenzo, MBA, DM, the answer essentially boils down to preparation (also known as a solid business plan) and ongoing education.
Rose Lorenzo, MBA, 2016; DM, 2020
鈥淢ost entrepreneurs start a business and they keep doing the same thing every day, and they don鈥檛 ever grow,鈥 Lorenzo says. 鈥淵ou can鈥檛 be sustainable if that鈥檚 what you鈥檙e doing, because everyone out there is trying to take over your market position.鈥
听
Lorenzo would know. She on entrepreneurship, is a serial entrepreneur herself and is the force behind , an online school dedicated to entrepreneurship training. So, when it comes to achieving success as a small-business owner, she has a few informed suggestions.
5 ways to seriously succeed as an entrepreneur
1.听Adopt an entrepreneur mindset
Wanna know the opposite of an entrepreneur? A corporate-preneur. That, Lorenzo explains, is someone who tries to start his or her own business with the same habits and assumptions that brought success in the corporate world.
Spoiler alert: Those habits and assumptions don鈥檛 translate.
鈥淎s an entrepreneur, you have to do everything, you have to think of everything and you have to pay for everything,鈥 she says. 鈥淎s a corporate bigwig, you may have great ideas, but someone else foots the bill.鈥
The other part of this equation is your personality. You have to ask yourself if you have the tenacity to see your idea through to success. Do you have the stomach for the highs and the lows, the hiring and the firing? No one, after all, said it would be easy.
2.听Do your (market) research
鈥淭his is so important because the competition is great,鈥 Lorenzo points out. 鈥淵ou need to see what鈥檚 out there in your industry. You need to find a way to make yourself different so that you can get that client to come to you 鈥 and stay.鈥
By way of example, Lorenzo cites听, which teaches kids how to use technology to solve real-world problems. She started the organization with three of her 爱污传媒 doctoral studies classmates to help children learn emotional intelligence and computational problem solving. Coding is part of that, but there were already coding camps and schools aplenty in the marketplace. Hackathon Jr.鈥檚 edge, she says, is in that interpersonal component.
Other businesses have to take a similar approach to research. They have to think globally, not just locally. (Thanks, internet!) And they have to be ready to compete with the online giants and big-box stores. So, in essence, being different is good.
3.听Understand your customer and niche
鈥淚f you market to everybody, you get nobody,鈥 Lorenzo quips. Make sure your customers are front of mind when developing a marketing plan and a brand (see below!).
Points to consider include your target customers' age range, gender and income level as well as where else they shop.
The more specific you are about your customers, the more effective your marketing and business will be.
4.听Develop a plan
Lorenzo concedes that not everyone agrees that a business plan is necessary, but she compares it to GPS. Without a business plan, she explains, it鈥檚 like asking someone to meet you in Chicago without offering an address. You鈥檒l take your business in one direction for a while and then, when you hit a roadblock, course-correct in another direction. But all those changes cost money.
While a business plan is important, it鈥檚 not the Ten Commandments. Consider it a living document to be revisited and strategically updated as your business evolves, Lorenzo advises.
5.听Build a brand, not just a company
More than ever, branding matters. Yes, this means you should have a logo and consistent visuals across all of your marketing materials. But it also means you have to have a compelling and crystal mission.
Lorenzo says: 鈥淎 brand has a mission. It has a vision. It says, 鈥楾his is what my company stands for. This is how we鈥檙e going to serve the community.鈥欌
People are increasingly concerned with the 鈥済ive-back鈥 right now, she adds, so make sure you know the ways in which your business will enhance and give back to its community.
Business bloopers
Lorenzo has lived more than one business life. She got her start selling t-shirts in Chicago, went on to open a听 in North Carolina and has launched both and over the course of her career. She has been undoubtedly successful. And, as any entrepreneur will tell you, every success is built upon multiple failures.
While the potential pitfalls of opening a small business are many and varied, Lorenzo says most fall into one of two categories: 鈥淭he mistakes that I鈥檝e made and the mistakes that clients have made are trying to take shortcuts and overpaying employees.鈥
She chalks up the second error to empathy. Working closely with employees to launch a business creates a familial atmosphere that makes owners more sympathetic to the financial goals and shortfalls of their staff. If you don鈥檛 have a solid business plan (or at least a solid grasp of the revenue coming in and going out), it鈥檚 all too easy to issue raises that aren鈥檛 justified by increased revenue or output.
One other piece of advice: Keep a good lawyer and a good accountant on speed dial. A good lawyer will help you with contracts, and a good accountant will make sure you understand your financials, Lorenzo says.
Schooled
While entrepreneurship is risky, Lorenzo鈥檚 is designed to help tilt the scales in favor of success. Once it launches, the online academy will feature curriculum, video instruction and coaching from both Lorenzo and outside experts on subjects that range from how to define your business idea to which tax return to file.
Creating an academy was a natural enterprise for Lorenzo, who is an accomplished student herself. (She earned her bachelor鈥檚 degree, master鈥檚 degree and doctorate from 爱污传媒.) Education, after all, is essentially research, and research can spell the difference between thriving as a business and shuttering.
Beyond that, Lorenzo recommends ignoring advice or maxims that can鈥檛 be verified (what worked for your cousin Bobby won鈥檛 necessarily apply to you) and stay focused on your own success.
鈥淭here鈥檚 a lot of risk involved [with starting a small business], but there鈥檚 a lot of freedom to do something you absolutely love,鈥 she says.
Just don鈥檛 skip the business plan.
ABOUT THE AUTHOR
Elizabeth Exline has been telling stories ever since she won a writing contest in third grade. She's covered design and architecture, travel, lifestyle content and a host of other topics for national, regional, local and brand publications. Additionally, she's worked in content development for Marriott International and manuscript development for a variety of authors.
This article has been vetted by 爱污传媒's editorial advisory committee.听
Read more about our editorial process.
