Those were among the tips offered up to entrepreneurs by Denis Breen (@profitpal_denis) at this month’s Entrepreneurs Anonymous meetup.
Managing Director of ProfitPal (@profitpalie), an accounting and tax advice firm, Breen was passing on advice gleaned from his own experience and his company’s dealings with entrepreneurs.
Understand what your customer is buying: Are they buying your “widget or gizmo”? Or are they really buying something like productivity, cost savings or peace of mind?
“What you are providing may be a stepping stone for what they are trying to achieve,” Breen said.
Brand: “You need a competitive edge, you need a brand,” he told the group. Customers who like your product and who talk about it are a huge boost there, Breen said.
The newest and smallest startups should start building their brand using early customers. “Even tiny, little sales stories are still stories,” he said.
De-risk: Economies and markets are unstable. Breen gave the example of a recruiting firm whose revenues were “lumpy and unpredictable.”
The re-examined their capabilities and realized they were good at finding people, he said. As a result, they became a recruitment, HR and training company with a healthy recurring revenue.
“De-risk all the things that could shut you down,” Breen advised. And don’t ignore non-fatal threats to materialize and drain resources.
Startups should be ready to pivot. They are nimble and usually overlooked as competitors, Breen said. “Ninety percent of companies don’t react to a threat in their marketplace.”
Think growth. “Think of growth and how you will exit your business,” he said.
Tech startups usually have such plans. They want to see what will work in the marketplace, and will quickly discard what is failing in the marketplace.
Have your stuff together. Breen said he can usually tell what entrepreneurs will ultimately be successful because they are focused and self-aware.
The ones who are drifting or taking it all on are likely to fail, he said. Successful business people overcome this by building structure and delegating.
Cash is king: “Sell it, make it, collect it,” Breen said. You have to do all three for a business to work.
“You need to learn how to ask for money,” he said. The cheapest source of financing is off a paying customer. Better yet if it can be built in to a recurring revenue stream.
Breen also said businesses should understand their cash cycles.
Learn to sell: “Selling fixes everything,” Breen said. “It fixes every single thing in a business if you can learn how to sell.”
Sales are often viewed as a mystery or an art. But selling is a process, he said.
Ask for help: Find experts trade groups such as Entrepreneurs Anonymous to get your questions answered.
Think like an athlete: An athlete’s mental preparation revolves around performance. “They are all trying to match their personal best or improve it,” Breen said.
They are not picturing winning otherwise they get distracted by thoughts of trophies and podiums during the game.
In a business, the performance measures are cash flow and profitability. “Everything else is nice,” he said.
Know noise: This relates to cash and customers. Know what is important. Know how is it measured. If you don’t have any outputs there, you are “flying blind,” he said.
Images from ProfitPal’s Twitter page.