If you’re a new graduate, you’re a part of a very special group.
You’re part of a brand new generation of innovators and entrepreneurs who have the potential to change the world for the better or simply get out there and carve your own unique mark.
Whatever your reason for wanting to start a business, it’s important to know that there are certain things which are critical to take into consideration before launching. Not only because building a business is tough but because knowing these things ahead of time can drastically improve your chances of success.
Here are some tips for getting off on the right foot when starting your own business after college:
1. Build a business around passion– not trends or markets
Marketing wizard Neil Patel is known for his ability to break down complex business topics into easily digestible information but he didn’t pick his entrepreneurial direction due primarily to market conditions or trends.
Patel suggests taking time to understand what makes you happy and using that information to inform what kind of business you build.
What do you have a passion for? What are you great at? What do you love to do– interact with people, write, work with numbers, or solve complex problems? These are the kinds of questions you should ask yourself to give you a lead on what type of business you should start.
You can build a business based on opportunity such as an upswing in that particular industry, niching down in a new budding industry, or jumping on a trend. However, when the going gets tough, it’s your passion for and love of what you’re doing that will push you through and allow you to build– and maintain– a successful business.
2. Invest in great communication skills
Communication skills are critical to virtually anything in life given that we are, by nature, social creatures much like honey bees.
However, the ability to communicate effectively in business is even more important.
Of all Warren Buffett’s accomplishments, including a Bachelor of Science in business administration from the University of Nebraska-Lincoln and Master of Science in economics from Columbia Business School, there’s only one document he keeps up on the wall of his Berkshire-Hathaway office: certification from a one-day Napoleon Hill seminar on communication skills he took as a young businessman.
Why? Buffett has said that he believes communication skills are the key to success.
In a 2009 speech to Columbia University business students, Buffett proposed he’d pay “$100,000 for 10 percent of the future earnings of any of you, so if you’re interested, see me after class.”
He went on to say that, “You can improve your value by 50 percent just by learning communication skills–public speaking. If that’s the case, see me after class and I’ll pay you $150,000.”
Take the time to invest in great communication skills to help not only your ability to market your product or service but build valuable business relationships and maintain strong employee and customer relations.
3. Identify a need before ever starting up
According to a study conducted by CB Insights which analyzed over 100 businesses, the most common reason that businesses fail is that the business did not solve a need.
That means the business didn’t at first identify whether there were consumers who needed– or wanted– what they were offering.
If you have an idea for a new software, did the idea come from “oh, that would be cool!” or did it arise from your observations of a particular segment of people who constantly complain about something?
The former is a bad business idea that new entrepreneurs often try and convince themselves is good. The latter is a legitimately good business idea that appears to fulfill a need.
By making sure you check off this one criteria for your business idea, you’ll avoid the single greatest cause of modern business failure.
4. Know how you’re going to fund the business beforehand
So, what’s the second greatest reason for business failure? Not enough funding to get the business off the ground and keep it in business.
When you’re first getting started, your excitement is paramount and it’s all about the big idea and foundational principles behind the business.
However, once the fervor dies down you quickly realize that someone is going to have to pay to get the business off the ground.
If you need substantial capital, you’ll need to put together a business plan and attract investors. However, if you’re like more businesses, a business loan will be the perfect fit.
Most new college grads won’t have the credit necessary to be approved for a bank loan. Fortunately, there are several alternative options now available to new business owners such as unsecured business loans which don’t require significant collateral or good credit to be approved.
5. Understand that failure is chance for growth– not a sign you should quit
Finally, it’s critical that as an entrepreneur you change the way you look at failure (if you haven’t already).
This might seem like an easy point to gloss over, but it couldn’t be more important.
As a business owner, you’re going to face an onslaught of failure. Your first product might not do as well as you expected, your marketing campaign could suffer from a rookie mistake, or you could end up short on funding right before a busy season in your first year.
All kinds of things can and often will go wrong. However, that doesn’t mean your business is doomed to failure.
On the contrary, success for the entrepreneur that learns to see failure as a learning experience and instead can quickly make adjustments and move forward better and smarter than before is inevitable.