I wanted to share with you a portion of Financial Bin’s recently released book called Entrepreneur Intervention: Triumphs & Failures of Entrepreneurs. The part included below is written by Chris Sonjeow, founder of LoveBook. Chris talks about what he has learned since starting his company and I think it is something we can all benefit from.
Over the past 3 years these are the things I‘ve learned to help make a business successful:
1. Find Smart People.
Always surround yourself with smart, talented people. If you do not know any, join a networking group and find them. Being an entrepreneur is a series of highs and lows. You need to surround yourself with people who understand that when it gets low, it is not the end of the world. It is just an opportunity to grow.
2. Always Have a Plan.
The plan is not set in stone, but you need guidelines and a revenue model. I always get approached by people asking me about a business idea they have. The first thing I ask them is: “Who‘s writing you checks?” If they cannot answer that right away, I know they do not have a revenue model. That is not to say that all business ideas need one at first, but would-be entrepreneurs should not mix “hobbies” with business.
A good plan should take you into multiple years and show growth and revenue generated. This will help you understand how diverse your products or services should be. You will be able to do the rough math to figure out how many products you need to sell or services you need to complete before you hire your first employee. And do not worry if plans change, they always do. They are strictly a guide to keep you from going too far off the original concept.
3. Ignore friends and family.
This was a lesson I learned in art school. Your friends and family will lie to you. It is not because they want you to fail, it is because they may not be experienced in business. They may give you their advice based off of their own experiences. What you need to do is bounce your idea off of people that have had multiple past experiences — in business.
Be prepared though, you may not like what a real business owner has to say. Some business owners have a pessimistic outlook toward businesses they are not educated in. Nevertheless, any negativity will actually help you uncover possible problems that you may not have thought of.
We had many people who, to this day, still cannot believe that people would buy our product. Our 100,000+ users would disagree.
4. Don’t Quit.
An entrepreneur cannot quit. They cannot give up. When things are difficult, I always say this phrase to myself – “How many other people quit at this point?” It pushes me to think smarter, work smarter, and accomplish more. I do not want to live my life saying, “If I only would have…”
In the end, our team has worked two full-time jobs for over three years before the idea was stable enough to allow us to work solely on LoveBook. Even to this day, the work load has not let up. We still continuously put in 70- to 80-hour workweeks in an effort to stay on top of the technical side of the industry.
5. Always check the numbers.
Most entrepreneurs are good at a few things, but the most important, and probably the most overlooked, is money management. I cannot stress enough how important it is to understand the formula for profitability. You always need to keep a close eye on where money goes and how it comes in.
This includes your marketing budgets. Every drop of marketing has to be accounted for. Since I am the Chief Marketing Officer (CMO), I can go on for hours about strategies and positioning — but that is for another book. We are certainly no exception when it comes to making mistakes.
A year ago, we had a few advertisements running on a cost-per-click (CPC) site that we thought was doing pretty well. We had about a dozen different ads going at one time. Most of them were doing really well and we did not think to check each one individually. After we broke down each ad individually, we found that we spent almost $10,000 on an ad that was barely producing any sales. We quickly removed that ad, saved money, and still maintained great sales through the site.
From then on, we have maintained a good track record of keeping the ads that do well and dumping the ads that do not.
I promise you that being an entrepreneur is not for the faint of heart. It will be the most difficult work you will ever do, but it will be the most rewarding too. Just keep learning, keep networking, and keep evolving.
David T. Domzalski is the founder of Financial Bin, a media company focused on personal finance and entrepreneurship education. Check out their first book, Entrepreneur Intervention: Triumphs & Failures of Entrepreneurs, available now on Amazon and CreateSpace.Subscribe to the Podcast