Explore well-known territory
The most successful businesses are run by people who know their industry. Even if you haven't operated a business in your field, it's definitely helpful to have some insight into the industry first.
Industry experience enables you to avoid mistakes that newcomers inevitably make in areas such as product distribution, marketing or HR strategies.
Entrepreneurs who attempt to tackle a totally new business should arm themselves with information first. There are countless free information sources out there for start-ups.
Get the coaching you need
You can start by building a network of professionals such as bankers, lawyers, accountants and experienced consultants who can help you out.
Many people looking to launch a new venture may lack basic skills such as how to do a proper cash flow projection or handling accounts receivable. As a general rule, if you can't do or learn it yourself, find somebody who can. BDC Advisory Services offers management coaching to help entrepreneurs deal with a full range of management challenges, including financial management, strategic planning, sales and marketing, operations and human resources.
Prepare a well-structured business plan
You can have great ideas but your business needs to have a clear structure before you can get if off the ground. Begin with getting a business plan on paper, which will help you assess your potential, confirm your commitment to becoming an entrepreneur and win the confidence of bankers and investors.
Many entrepreneurs think a good business plan is a voluminous document. However, in reality, as long as the plan is precise, clear and sound, a banker will consider reviewing it. You need to have the right mix of narrative that sells your company together with financial figures and research that back your story.
One of the key factors to success is to be totally realistic about your projections. You're better off showing less optimistic scenarios, demonstrate how you'll perform and consider the various risks that you may face.
Form a strategic alliance
Strategic alliances help entrepreneurs diminish their vulnerability when they first start businesses.
Business owners can consider teaming up with other companies that can help them enter new markets with new products and services, get better prices through bulk purchasing or accelerate research and development by sharing costs and resources.
Focus on what you do best and rely on other companies to offer complementary services. For example, a furniture design company could partner with a manufacturer for the production of its designs.
Establish clear HR strategies
Recruiting and retaining the right people is a challenge for start-ups, as they may lack the financial resources to pay high salaries. Many businesses fail because they can't get a team in place fast enough or lose their people to competitors.
A start-up should focus on attracting the right people through advertising, job fairs, industry association activities and community involvement.
To retain employees, business owners should make sure their benefits are competitive and that they offer employees an environment where they can grow personally and professionally.
Capitalize your business fully
Getting financing for a start-up is a challenging task because you have to prove your worth and good credit to bankers. But many entrepreneurs also tend to "under-finance" because they have poorly assessed their entire range of needs.
Assessing your needs will require you to look at everything, from the cost of equipment and hiring to how you'll finance gaps between sending out your bills and actually getting paid.