JIB101 Intro to being a good entrepreneur

I thought today what would a good entrepreneur act like? What would be some of the golden rules that he/she would abide by? What am I telling you here is no Rocket Science, but it may be the foundations from which I build further on. I faced most of these obstacles while creating my own business. I wish that somebody would have told them to me earlier, so that I could avoid doing some of these mistakes on my own skin…

I wrote with these advices from the top of my head, suggestions that I believe constitute good tips for any new entrepreneur. I hope that when I finish my Master’s Degree, the list would be a lot bigger.

1. If you want to start your business from ground 0, it is ideal to have an idea that was never done before and it is hard to imitate. Also some experience in that field/industry would be a plus. Of course, in many cases this utopia will never happen.

2. Don’t imitate, unless you can do it better. Best to find a niche on which to expand. Take the more develop countries as a hallmark. See what they have and your region doesn’t. Then see if that idea could be feasible in your country.

3. I do not advise you to start copying, unless you have an Ace card up your sleeve. I advise you this because the players that are on the local market already have their know-how, their clientele and their market share. If you want to enter the existing market, bring something new. If you think that money will solve absolutely everything, you are wrong. In many industries huge investments in technology or capital won’t return the desired market share.

4. If you cannot come with anything new, spy on the competition. This is not the most Christian thing to do, but imitating the winners sure is less expensive than investing in your own R&D. Have your loyal friends pose as “customers” and make them pay some visits to the neighbors across the road. Try to observe as much as possible how does the competitors cut losses, attract customers and what marketing strategies do they apply. It will cost you less and the results are pretty fast. But considering the most optimistic scenario, this strategy will only bring you up to the same level as the competitors and not more. In order to be No.1, you need something extra. Remember that the competition can and will do the same to you.

5. If the market is saturated by same type businesses, it is vital to differentiate yourself. Have a core competence that makes you different from the rest. Low price is not always the sure thing. Some customers look not only for the cheapest price! Plus, this strategy will surely not make you rich, unless you manage to attract a huge market share, big enough to counterbalance the losses in profit. But if customers do not look explicitly for low prices, you just lost a bit of consumer surplus with every customer - extra money that could have easily been yours.

6. Treat your employees fair. Reward hard work but also punish absenteeism or low productivity. I can give an example from my Work and Travel experience in the States: one of my employers offered bonuses consisting of one additional dollar above regular wage for every hour worked in a week IF the person was punctual during those 7 days. As a result, from the 14 weeks which I worked at that establishment, the bonus was lost only twice, for being late 3 days during two weeks. On the other jobs, where this rule was not properly enforced, I used to be late al least once per week

7. Motivate your staff. Offer them contests like “Best worker award”, organize collective meetings (collective dinners, picnics, make reservations for a big table in a fancy disco for your young employees). Part of these costs can be put under business protocols and deducted from gross profits, so bare that in mind also. Ease the atmosphere at your workplace. Put a quiet background music that will make time pass faster, and decrease the level of employee tension. People are not productive under stress and will dislike the work they are doing short time after. Take care of your team! Remember that an old employee is more valuable than a new one due to all the money and time you have invested in him/her (e.g. know-how of the business’ secrets, agenda, plans, training expenses, etc)

8. Look a good accountant and a good manager. They can save your skin in many unpredicted events. Reward them accordingly

9. Leave an open door everywhere you go, even if this will take part of your time and money. You never know who you will bump into in your future plans.

10. Treat every customer with respect, even those who will not bring you any income. Many of the businesses in Romania classify customers by the size of their wallets. Do not make that mistake! All are equal and all should deserve the same amount of time and attention from you. A huge, short run, boost in sales made by a rich customer is not as valuable for you as a loyal, long run, regular client that returns for new purchases because he/she knows he/she is be treated fair and amiable.

11. Always try to improve your business. Work with the manager, accountant and employees in order to increase efficiency. Encourage feedback. Don’t ever have the impression that you are the smartest person in that firm and that you know it all. Be open to change, but think twice about every new transformation you make. Even if some might appear good in the short run, they might harm the company in the long run.

12. Find as many suppliers and customers as possible. Expand in these two segments as much as possible in order to reduce the bargaining power of these two parties. Find new market segments, develop your product or service to cover as many segments as possible, but continue this as long as you can control these tasks. Allocate sufficient time to every activity. Don’t haste. Bare with what you started at least till the project becomes stable. Then leave it to other people, like your manager for example.




…To be continued