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6 factors to consider before starting entrepreneurial journey

Updated: Apr 3

Throughout the years I have observed many of my peers & colleagues start their businesses as an impulse that was triggered by various reasons. Some grasped an opportunity, some utilized their best skill & some even got bored with their day jobs. At the same time, I have founded and managed both successful and unsuccessful ventures. One thing is for sure – the entrepreneurial journey never lives up to your expectation of that hypothetical “ideal world”.

Entrepreneurs who embark upon that journey with clouded judgments and unrealistic expectations usually experience the struggle of surviving the one-year mark and then the five-year mark. According to Forbes only about half of businesses survive passed the five-year mark, ranging from 45.4% to 51% while 75% of businesses fail in the first year. The most common case is limited knowledge of how to build a business & manage day-to-day operations successfully. I have experienced the same situation when reality was not even close to my expectations, due to misjudgments & miscalculations.

There is nothing more tempting than to start a business if you feel stuck at your day job if you feel pressured by financial needs or if the opportunity is just there in front of you. Therefore things I would consider at the idea stage of the business are as follows.

1. Purpose- the why, the what & the how

Regardless of your initial trigger or temptation to start a business, the bottom line should be the creation of a product/service that will appeal to the potential customer. However, most importantly you need to figure out what is the “why” factor, what kind of values you represent & what differentiates you from the competition. Following that, you should analyze what will you be delivering to the market and how. You should focus on not only the physical delivery of the product/service but also on the message it will be accompanied by, which at the end of the day will become your company’s identity.

2. Understand the business

What I mean by this headline is, not only to understand what you trying to create but also to understand and evaluate the market & the competition. Even if your genius business opportunity does not see or project any validated competition, it is worth understanding why previous players have failed in this field or why this market is untapped to this day. Long story short, research and data is the key! In this modern world your research should be backed up by data & information, it should not be solely comprised of brainstorming sessions and discussions with people in the relevant fields. Sometimes your area of research may end up so small that, the “minimized sample size” may provide you with false data, false expectations & incorrect understanding of the ecosystem.

3. Dont be a one-man show

In my personal experience, I have always tried to pick the best teammates possible. I used the services of headhunting firms to relocate chief operating officers from Eastern Europe, chief financial officers from India, and executives with degrees and MBAs from the best universities in the UK & Europe & successfully attracted the best technical team Azerbaijan can offer. However this might not be the case for each and everyone of you. The team you build regardless of its size or partnerships you engage regardless of the equity division should be complimenting each other. Every team member must add value to the organization it is part of. Moreover, those added values should compliment each other. For instance, if you are building a startup and no one in your team has an understanding of digital marketing or finance, then you should definitely reconsider your actions and strategy to fill that gap. While we are on this topic I would like to thank each team member who is or was part of ATL Group, I have learned a lot from you and I am proud to be part of such a talented team.

4. Roadmap

Simple and easy. Identify what you are going to do to and achieve in years 1,2,3,4 & 5. Make them realistic and achievable. Cross-check it with your research and benchmarks. Subsequently, if the risk is worth taking, go for it.

5. Risks & execution challenges

Now that we have mentioned the risk factor. You should be aware of the possible risks you may encounter with. Furthermore, after you launch your business it might need some changes or “brush-ups” along the way, which may be generated from customer experience and expectations. In this sense, you need to be agile & elastic if you need to be. Remember you always need to listen to the customer and comprise your data, do not cling to your own initial setup/idea if it pulls you down.

6. Funds

Before starting a business it is important to clearly understand your financial position & evaluate the source(s) of funds you are going to allocate to the business. If you can attract investment that definitely is a good idea but you have to evaluate the outcomes of that approach very precisely. Firstly the evaluation stage has to be very professionally calculated & finally, any partner you onboard to your business has to add value one way or another.

Moreover, you have to keep in mind that, you need to have certain liquidity for at least 6 months of operations, whilst understanding that you are not going to be generating revenue or becoming profitable right away. This part of my advice must be approached “by the book”, you must utilize all standard financial calculations and formulas to evaluate and create projections of your financial decisions. Furthermore, keep in mind that being passionate about entrepreneurship alone will not be sufficient to convert your dream idea into a scalable business. Starting a new business needs more than passion & integrity. Once the entrepreneurial journey has been taken, measured risk-taking abilities and understanding of the clear picture set apart the successful entrepreneurs from their peers, as they scale up their idea into a fruitful business venture.

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