DJ Muller, President, WebLink International
I started my first company when I was 14 years old selling student-scheduling software that ran on the Apple IIe to school systems around the U.S. Within a year, I had sold about 30 copies at $69 a pop – which is good money when you are 14 and your biggest expense is getting your mom to take you and your friends to a movie.
I can distinctly remember receiving a call from my largest account one day, a school district in Dallas, Texas. I was instantly caught off guard when a very upset woman informed me that the school district was no longer going to use my software. She exclaimed, “I am most upset because the school district is spending more than$100,000 on a new system, and your system is better!”
This was the moment I realized that I needed help before I could really run a profitable business.
While at the time my personal strengths resided in innovative software programming, I lacked something of critical importance: business experience. I was clueless when it came to formulating and executing a business strategy that would successfully allow me to market and sell my product. So, after graduating from high school I decided to study business and computer science at St. Cloud State University in Minnesota.
After college, I looked for a small, successful company where I would have the opportunity to interact with executives who had first handedly made a mere idea profitable. Fortunately, I was able to work for not one, but two, great companies within my first six years of graduating. Each of these companies had endured challenges and overcome obstacles in order to gain traction in the market and ultimately, reach the point of profitability. It was during my time working for these businesses that I learned what it took to take on entrepreneurship.
Thanks to the experience that was passed along to me by the founders of these companies, I can now share my knowledge with you. Here are the top six things entrepreneurs must do before quitting their day jobs and going it alone:
1. Write a business plan. What problem does your product or service solve? How will you support your customers? How will you market your products and/or services? Make sure to answer these questions, write a plan, and find anyone who will listen and have them review it – it will help you sharpen your focus and your message.
2. Get happy, paying customers. Customer service and experience are crucial to success. If you don’t have customers, then you aren’t selling product, and you are not making money. If customers aren’t happy with your product, then they won’t tell others about that product and you will lose potential profit.
The bottom line? Create a unique customer experience and offer superior customer service- it will only benefit your company.
3. Know your competitors. Before you penetrate the market, you must analyze the competitive environment. Who are your competitors? How big are they? What percentage of the total market do they hold? What is your differentiator? If you were your competitor, how would you compete against yourself? Asking yourself each of these questions will help identify your innate strengths as well as potential areas of weakness.
4. Know your numbers. Understand the numbers that drive your true, fixed and variable costs, and gross and profit margins. Additionally, know how to accurately prepare an income statement.
Tips for success: Include the minimum salary that you need to live off of in the income statement. Then, calculate the sales in units and dollars you will need to generate in order to breakeven.
5. Hit your plan three months in row. Set up a three-month forecast of sales and expenses. If you can consistently execute each month against your plan, which includes paying your own salary and bills, then this is a strong indicator that you are ready to begin your entrepreneurial endeavor.
6. Find a good mentor. A good mentor will take a sincere interest in your success and can help guide you around and over the many obstacles you’ll face in growing your business.
I took this advice to heart when I started my own software-as-a-service company, WebLink International. As a result our organization continues to thrive in a market full of opportunities. I hope they help you do the same in your endeavors.
About the Author
DJ Muller is president and founder of WebLink International, the creators of WebLink Connect™ the innovative, insightful and intuitive association management software with superior customer support. WebLink empowers hundreds of trade and professional associations and more than 500,000 small and medium businesses to help them acquire and retain more customers. Learn more at weblinkinternational.com.