Entrepreneurs are a unique breed. They’re always striving to do better, make significant sacrifices, and work every hour that life throws at them to achieve their dreams. Part of this means they’re always thinking about work in some way, shape or form.
Apart from the day-to-day running of their businesses, entrepreneurs have to consider many other important factors if they want their ventures to succeed. Here are just some of the key considerations they must make.
Technology has always changed and disrupted different industries and entrepreneurs must keep an eye on this ever-evolving landscape to be sure they’re not being left behind.
Throughout history, new technological developments have created new ways to compete, allowed for entirely new industries to form, and helped agile businesses to find innovative ways to serve their customers.
In the mid-nineties, new technology allowed companies to begin developing ways for the public to play card games over the internet. By the early 2000s, this technology had evolved to make it possible for a whole host of different online casino games to be made accessible in many parts of the world.
Entrepreneurs that were paying attention to these technological developments back then have reaped the rewards over the last two decades, building large brands with billions in annual revenue.
While many entrepreneurs may be motivated by things other than money, their company’s finances are something they still need to stay on top of. While profit and loss accounts, balance sheets, and cash flow forecasts might seem boring, they’re essential for business success.
Companies that don’t make a profit will fail eventually, while those that don’t have any cash will collapse very quickly. Therefore, entrepreneurs must know their profit margins and understand what their overheads are. The only way that they can achieve this is by paying close attention and ensuring that they’re tracking all the right data.
Successful entrepreneurs will often also be thinking of ways to make their operations more efficient, which can, in turn, help cut their running costs. The 2016 movie The Founder is a dramatisation of Ray Kroc’s approach to this. The founder of McDonald’s was ruthless in his approach to maximising the speed that could be achieved in his kitchens, to the extent that he made mockup kitchens in a car park to test ideas.
Another reason to stay on top of your finances is that you’ll need it to secure business financing. No matter whether you’re looking for a loan, investment, or grants, you’ll be left penniless if you can’t demonstrate a viable business model and a strong grasp of your fundamentals.
Businesses don’t operate in isolation, they are almost always forced to compete with other companies that try to sell the same products to the same customers.
Therefore, all entrepreneurs will keep an eye on their competition to understand what they’re up to, monitor their product developments and sales techniques. However, only the most successful business people will know how to respond to moves made by their competitors.
Some may choose to react whenever a rival makes a move, copying a new product, undercutting their price, or completely pivoting their approach to reach customers in a different way. Except, when you take such a reactive approach, you will always be on the back foot.
Instead, successful entrepreneurs will be constantly monitoring their competition but will often choose not to make any changes, knowing that their business has a different strategy and may be seeking to target a slightly different market or demographic of customer.
A really basic example of this is petrol stations located on either side of a motorway. They’re so close that customers could wave to each other from either side of the road, but these two businesses are not in competition with each other.
Drivers on the northbound carriageway can’t buy fuel from the company on the southbound carriageway and vice versa as they’re physically cut off. Of course, they could drive to the next junction, turn around, fill up, drive another junction, and then turn around again, but that’s going to extend their journey by quite a bit. Therefore, if the southbound petrol station lowers its price, the owner of the petrol station on the other side of the road has no need to react since his customers still have no other choice. By copying his supposed rival, the northbound owner has cut into his profit margin with no prospect of increasing sales.