Year-1 of entrepreneurial venture: Experiences
Somebody on linked-in recently sent me an email asking as to “what is the worst mistake that I did in my entrepreneurial business”. It was a tough question to answer as I believed that the worst mistake is yet to be done as we still are in business.
However, it prompted me to write my first ever blog where I wanted to share my experiences and things that I believed are a must to survive – particularly in year-1 of entrepreneurial venture.
My idea’s should be seen in context of our venture – IT Product Firm in a highly price sensitive market – India.
Some of these things that I am about to write may sound as cliché. Further, my unfamiliarity with the blogging culture will be visible via my ‘inappropriate’ use of English language – but bear with me.
Here I go in contributing my two cents into what certainly should be done in the first year of business:
1. Manage Cash – As has been said by many people. We are a self funded firm applies equally well to us. Think Twice before spending. “Cash is hardest to come by to you when you need IT the most”.
2. Never work for free – People may be there available in market that will want to take your advantage. They will want that you work for them for free as give big brand to your resume. Be wary. Your expenses are constant & many of them [employee salaries] can’t be deferred. So a paying – less reputed client – is better than a non-paying big brand name.
Further, making payment implies that client is serious about the assignment & hence a signal of his committment. Ask for advance – this is important – as this cashflow help you keep going.
However – there may be a scenario where some of your resources are under-utilized – so keep engaged the big branded client asking for free lunch for this period.
3. Sales is all about building credibility & trust – In any sales cycle – the person purchasing your goods/services is looking in for an assurance that work will be done & support in case of further enhancements. This credibility can be generated in a number of ways as
A. Clients – you have done similar things before for similar or bigger firms.
B. You yourself – You have to act & say that even though you are not coming in from a big brand, you as a person have credentials to execute work – this can come from your experience/ educational back-ground etc.
C. Board Members – if you are in a position to get good famous people on your firm’s board – it helps. Their credibility & stature helps you build the credibility required for sales. Remember – Any one who has build his reputation, will be cautious of putting it at stake for your venture.
4. Leverage Social Network – my alumni from my IIT-Roorkee were of great help to us. They will open doors for you in small manner in their departments – you have to grab these occasions & perform.
5. Performance has no substitute – Go slow on the first few projects & don’t get into the syndrome of taking too many jobs on which you can’t deliver. In these first few projects – ensure you don’t get into cash-distress type of situation & ensure that product / service delivered is good.
6. Client Satisfaction implies listening & responding to client – Even we try to give flawless product/services it may not always be possible. Accept the same. But ensure that when the client needs you – you respond. Your response matter more than anything at that juncture.
7. Manage Balance between family, society & business – you will require a huge support & peace of mind to focus on building the organization. It’s imperative that family front is secured. You don’t want too many hassles as you already have too many of your own. After all in what you are doing – family is also making sacrifices. Do take a break when required. Family comes first.
8. Have courage & differentiate between audacity & stupidity – some times we have to take decisions – say setting up of an office in a new geography or hiring extremely talented people. Do take them.
One definition of entrepreneurship includes “Person who is chasing an opportunity without any knowledge of funding options.” Here the management philosophy will be not of much use.
You have to evaluate yourself, trust your judgment & take decisions. Note – the difference between the above as suggested & stupidity is your actions & implementation acumen.
9. Create Leaders to manage growth – Early in your venture you will need hands – reliable enough to deliver. Resources will be scare – both human & financial. You will have to get the most of the available ones.
To have more earning hands – particularly for operations delivery, sales & marketing, you have to institutionalize the processes. Initially, you will have to do all the above. Trained people from the market will be prohibitively expensive.
At this juncture, as a leader, you deliberately take a back-seat in the project execution domain & put to front your trusted talented new team-members. Keep an eye as these people, being young may make mistakes.
Your young team will learn a lot about your business on the job & will become dependable assets for you. Afterall, your model is to replicate what you have done till date multiple times. You should focus more energy in strategic initiatives as new offices, new territories, new products, sales & business development & should try to get out of the routine business where the process takes care of the deliverables.
10. Regard Sales & Marketing an Investment & not Expenditure – Sales help you grow & earn the cashflows necessary for the organization. Though I may have just over-emphasised the role of sales but sales as a process should be institutionalized as soon as possible along with delivery early in the venture. Opportunities will not come easily to you.
The greatest challanges that one faces is knowing as to specifically with which firm – the opportunities lies. So regards sales as an investment into building a firm & putting all the other resources that you have created. Part-time sales people will not work out. Full time employee will be required but they should be incentivized by good bonus upon closure of deal to align their incentives with those of your business.
Google & online forums as Capterra are good sources but as we are yet to get to the level where we are able to reap these new media sources to our advantage.
My two cents.
Ritesh Tripathi
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