3 signs you’re ready to open a business
The EC Accelerate team has perfected a product launch framework over the past 10 years – they’ve used their framework more than 60 times with a 100% success rate as founders, investors, and mentors. After hosting a seminar with them for the Neat’s network of entrepreneurs a couple months ago, we’ve invited the team to share some additional insights on what entrepreneurs actually need to focus on when evaluating when to open their business.
The sad truth is most founders spend their time, energy, and capital doing the wrong work at the wrong time and they get the wrong result – a failed business.
You should have already validated a few key factors of your business before you decide to invest in the rest of the business costs. If you don’t, then this is on you as an irresponsible founder. This is what we’re going to cover today.
After helping hundreds of entrepreneurs launch their businesses successfully, we believe only after you confirm the below three factors is it time for you to take the next steps in officially incorporating, opening business accounts, etc. and launching your business.
1. Paying/ready to pay customers
Paying customers: The oldest aspect of business, yet the one the great majority of founders are scared of or don’t want to figure out until the end.
And you wonder why 95% of “entrepreneurs” fail the first time they start?
We were the same.
Inevitably, we learned this the hard way our first few attempts at starting a business. We had everything “ready to go,” i.e. incorporated business, logo design, patent, copyrights, etc. were all set and paid for. Thousands of dollars in the bank. We opened our virtual doors… and no one showed up. Ouch!
The one definitive thing you need to determine when you think you’re ready to open your business (and honestly at any stage) is this: “Are my ideal customers willing to pay me or not?”
You may do this in numerous ways which validate to different levels, e.g. survey, email confirmation, verbal confirmation, in person confirmation, and of course people actually taking money out of their wallet or credit card and putting it in your hand (bank account, Paypal crowdfunding campaign, etc.).
If you have identified customers who are willing to pay for your product or service this is a key sign that you’re ready to open your business.
2. Growing/passionate niche
Are you targeting a specific, growing, passionate niche or are you trying to be “everything for everyone?”
Most founders do the latter and they wonder why they end up being nothing for no one.
Here’s the key: before you open your business, the point is not to start thinking about TAM/SAM/TOM or the “millions of potential customers.” The goal is to think about a market that is in its early stages, i.e. vegan protein, remote work accessories, etc. and figure out how you can solve the pain/problems for the most passionate 20% of this niche audience.
“Niches make riches.”
Think of ANY big brand/business today, Nike, Apple, Facebook, etc. and think about how they started. It wasn’t with a “product line” or a gamut of services. They did one thing the BEST and they focused on this for their earliest stages of business. This is also how you have to think.
If you can confidently say that your business will cater to a specific audience, you’re in good shape to open your business.
3. Sustainable business model
There is nothing worse than a successful rise only to be followed by a swift fall.
This is the sad reality for most founders who can always gain momentum (still no easy feat!), yet are never able to sustain it for the long haul. This is normally because they always want to do “too much, too fast, too soon, for too many.”
In other words – KEEP IT SIMPLE, STUPID! By “sustainable business model” I mean this: It’s not about doing everything but more about doing one thing the absolute best.
Let’s use Enter China as an example.
- We validated point 1 by tapping into our network of “wantrepreneurs” to see if they’d be interested in a coaching program we’d run. They said yes.
- The world is growing more connected and more people are starting their own online businesses than ever before. We’ve now validated point 2.
- We built our program from scratch, ran it from A to Z, figured out where we can replace ourselves with talent we trust and what systems or tools we can use to automate certain parts of the process, and have since done so. We have a hungry global market who we can plug into our program and we’re able to continually grow our business without having to grow operations.
I guarantee if you analysed how businesses created a sustainable model the fastest, it’s always going to be by focusing all your time, energy, and effort on where they provide the most value and not get distracted by all the opportunities that start to come your way once you’re successful.
I know sustainability isn’t the sexiest word when it comes to business. However, other words such as “growth” or “new product launch” or “suite of services” should only be considered once you’ve actually achieved a sustainable business model.
Are you ready to open your business?
I hope you’ve found these 3 signs useful and insightful to see if you’re ready to open a business or not!
If you’d like more guidance on launching your business successfully, be sure to check out the top-notch resources and programs from Enter China.
And for those looking to incorporate your company in Hong Kong, Neat has an incorporation package, that’s fully digital (of course) and also includes opening a Neat Business Account. Check out our incorporation package here!