I love working with entrepreneurs in the developing world. They are like sponges, absorbing all the knowledge and insight and advice they can possibly take in. Yet common mistakes prevail among fledgling businesses around the globe; let’s ensure you’re not making them.
1. Big, daring visions are good; starry-eyed delusions can get you into trouble
Entrepreneurs are an optimistic bunch. That idealism serves them well and stokes their success. But they sometimes fail to acknowledge danger signals or choose to look past the warning flags. If that’s you, get someone on your team who’s the worst case scenario watchdog, or at least grounded in reality. With good management they’ll provide a counterbalance and force you to anticipate problems before they become disasters. This is known as astute risk management and it’s imperative for all businesses.
2. Yes, you need a business plan
If you’re a serious businessperson you can’t wiggle out of this one, especially if you’re seeking funding. Of course there are tools like Business Model Canvas and Lean Canvas. They are great for efficiently sifting through and evaluating new concepts and business models, and you should use them. However, they are not substitutes for a full business plan; you can’t submit a canvas to an investor and expect them to fork over financing.
The value of a business plan is not so much the document itself, but the process it pulls you through to develop it. It forces you to dissect and account for all the interrelated aspects of operating a business. I’ve done a lot of them and it’s never easy. Your plan doesn’t have to be elaborate, but sit down and do it. And stop whining.
3. Your business better be something you care about
Your drive for your dream may be the only thing that gets you over, under, around, and through the innumerable obstacles you’re going to face. You’ll need that passion and drive in order to succeed. If you’re not jumping out of bed galvanized to accomplish the vision for your venture (at least most mornings) then go get a J.O.B.
4. Market success in two words: demand and differentiation
You need both. Know your market intimately and establish that there’s a real need for what you’re offering. No, really—do people want what you have? Do some basic research and ask. I often tell startups to find a problem and then solve it. There are many; take your pick.
Then make sure there’s something about your business that stands out and differentiates it from your competitors. I see too many entrepreneurs starting businesses that are just like everyone else’s. They reason that everyone consumes a certain item so they need it, and there will always be a market for it. Besides, other businesses are making money at it. That may be, but you don’t want to be in the arena with everyone else; that makes it too easy for your customers to switch back and forth. Give your clients a compelling reason to buy from you and then stick with you.
There are around 400 million small and medium enterprises in low- and medium-income countries. If anyone has the potential to change the world, it’s you.