Newly-qualified MBA graduates tend to assume that their piece of paper automatically qualifies them to be a freelance consultant or to run their own business. Think again, says Robert Craven.
Running a business is about action, it is not about theory. What is great in the classroom (because it is intellectually attractive or academically rigorous) is not always relevant in the real world.
Business planning is a great way to make mistakes on paper; but you'll learn even more in the marketplace. The market is brutally honest and gives you real feedback. You will be successful if you provide something that people want - in a way that they want it. The best (and fastest) way to learn is by spending your own money and by paying for your own mistakes. I only learnt about the value of money when I started losing my own!
There is one basic question you need to ask yourself about your new business – why should people bother to buy your product? And why should they bother to buy from you, especially when there are so many other people selling similar products at similar prices? What will make you different?
Do not compete on price. The bigger organisations with bigger budgets and buying power will always beat the smaller player on price. You must compete on everything but the price. Be faster, smarter, slower, nicer, cleverer, more local, ruder - be different.
There are four main skills that every entrepreneur needs. The first is vision – the ability to see into the future, to imagine how things could be. The second is passion – a sheer belief and conviction in one's ideas and actions. Then there's determination – the willingness to persevere, often against the odds, to create something new where there was nothing. Communication/delegation skills are also vital – the ability to muster the skills and efforts of other people to help to create and deliver a dream, to take something from the imagination and turn it into an actual product or service that people will buy. If you possess these skills, you're already half way there.
So, what aspects do you need to consider to set up on your own?
The market: How good is your idea? Test it on friends and strangers. What problem are you solving? Who is going to buy your product? Why? Who are your competitors? How will you be different, better and smarter? How will you make the first/tenth/hundredth sale? You will make no sales if it is a lousy product, or because of your lousy marketing. So throw away Kotler [author of How to Create, Win, and Dominate Markets] and start listening to potential customers.
Objectives: What is the business trying to achieve? What is your motivation? What is your definition of success?
Resources: What do you own and what resources can you use (physical, human, intellectual and financial resources) to make the business idea come to fruition? What will you need in a year's time?
Financials: What do the projected cash-flow and profit and loss forecasts look like? How are prices set? What is the cost structure? The key issues are economic viability, price and profit. Is there someone in the business who actually understands how the finances work?
Ability: Have you got what it takes? How relevant is your knowledge, attitude, experience and character?
Starting your own business isn't easy. Fear is a perfectly natural emotion. What limits have you set for yourself subconsciously? If you believe that you cannot swim then you will not be able to swim. How do you limit yourself? If you aren't sailing close to the wind then you are probably not taking enough risks. Acknowledge the fear and make a calculated decision. Use the adrenaline and energy that the fear creates to work for you rather than against you. Cut the excuses and just do it.
Branding is absolutely crucial. You can't afford to not communicate your brand. Everything about your business communicates something, so ask yourself what it is that you want to be communicating? Less is more, so simplify everything.
Separate yourself from the competition. Make yourself different and sharpen your thinking by spending some time with people who come at things from a different angle. Remember: the best ideas will come from the strangest of places. You should never be afraid to ask stupid questions.
Work on, not in your business. When Ray Kroc started McDonald's, he never intended to work in the business cooking beefburgers; he always intended to work on the business, creating the architecture, the empire.
Don't shy away from passion.
Don't shy away from passion.
Let’s be clear about what I am saying.
What is great in the classroom is not always relevant in the real world. What you need, to run your business, may not be taught in an MBA. This is a sweeping generalisation about the courses and the graduates, I know, but I have met MBA students who are ‘spot on’ when it comes to growing a business; I have met others who are simply not equipped to deal with the entrepreneur’s world. All MBAs are not the same.