Reaching entrepreneurial success takes dedication
Anyone who has ever launched a tech startup, a retail store, or even a published book knows that entrepreneurial success is a rewarding path but one that does not come without challenge. Each tale is different, as is the destination, but of the few companies that ever make it past idea stage and even fewer that succeed, there are some methods common to all that helped pave that path.
To that end, we asked Hotels.com Co-Founder Bob Diener what you should know about the path to entrepreneurial success because Diener not only co-founded one of the top online booking sites, he then went on to found Getaroom.com, his second venture, where he’s continued his record of success. With thousands of hotel partners joining in just the first three months of 2013 and 70% growth since 2012, Getaroom.com is a testament to Diener’s entrepreneurial fortitude.
“Many entrepreneurs dive into starting their business prepared with not much more than an idea,” Diener said. “The idea itself might be fantastic, but they think that alone will drive in customers, revenue, and eventual long-term success. It takes careful planning, an understanding of market forces, and a heavy dose of realism to get a company from concept to a viable business.”
10 tips for improving the odds of entrepreneurial success
Diener says there are proven ways to improve the odds of success when starting and managing a business:
- Establish a real value proposition. Conduct research to be sure your core offering is valuable and not readily available for free. The goal of your business is to earn money.
- Focus on uniqueness. You need to stand out in some regard, especially from any company that offers your product/service for free. It doesn’t matter if it’s your delivery method, actual product or service attributes, or price-to-value is your unique attribute, as long as it’s real and easily promoted.
- Utilize the experience of others. Seek out mentors and other individuals who can guide you on the merits of your business. They can help you determine if the benefits of your company are easily explainable.
- Set realistic goals. Carefully consider the type of business you have and its industry. Look at other successes in your space and try to gauge where you fit in. Don’t assume your product or service will become an overnight hit.
- Gauge the competition. Are you competing directly against entrenched firms or is there a niche play where you can capture dollars?
- Look at the market size. Lodging is a nearly $500 billion dollar business. If you can grab just one hundredth of one percent of that total, you have a $50 million market potential. Stay away from businesses that operate in tiny markets with thin margins.
- Don’t overestimate the benefit of advertising. Most traditional advertising fails to bring in enough business to justify the costs. Word of mouth referrals and non-traditional channels will likely generate results.
- Develop a business model. This is the nuts and bolts of the company that answers the big “how” questions. How will you grow while keeping costs in check? How can you handle spikes in demand? You need to manage the bottom line and keep in check all top line expenses. Some companies fail because of poor business planning, even if the product offering is great.
- Attract customers cost-effectively. A fundamental error is to use $10 in marketing funds to acquire customers that on average spend $5. Use promotions, social media, and other channels to get quality leads at the minimal price. You need to have profit motives from the start.
- Encourage others to talk about your brand. Give incentives for customers to review or profile your brand. Establish relationships with popular bloggers in order to build third-party endorsements.
Diener notes that the devils in the details and that “entrepreneurs that put in the work on the front-end are most likely the ones who will create profitable and well managed companies.”