While many entrepreneurs boast college degrees and MBAs, most will readily admit that the hard knocks received from starting their own businesses were infinitely more valuable. Here are five lessons you won't learn in a classroom:
Businesses can go bankrupt and unsold products can pile up in the warehouse, but every venture is a potential learning experience. Investors get skittish and bail at the 11th hour? You'll know how to better choose strategic partners and negotiate deals going forward. Couldn't successfully expand into Europe? Use the insights gained into international distribution to craft a more viable strategy next time. Clients indifferent to your sales pitch? Maybe you're trying to solve the wrong problem.
Such learning may seem expensive, but ignorance is costlier still. Knowledge gained through failure is directly applicable to future ventures. So try, fail, and try again until you get it right. Just remember: Only a fool makes the same mistake twice.
When exploring new market opportunities or pitching potential clients, remember that situations change. Just because your approach or offer doesn't make sense to a potential customer or partner now doesn't mean that it won't later on. Markets and strategies evolve, internal stakeholders come and go, and enterprises' needs constantly change. Never be afraid to pick up the phone for a follow-up, especially if situations have shifted in your firm's favor.
Ask 50 people at the same business the exact same question and you're guaranteed to get just as many different answers. A single corporate division may include numerous executives, so it's important to find the one individual whose sphere of influence directly overlaps with your inquiry. Don't be afraid to go up the chain and call a high-level decision maker: At worst, they'll ignore the query or say no; at best, they'll direct you straight to the proper point of contact.
Customer conversion rates can be shockingly low for many new ventures. So plan conservatively. Be cautious with prices. Fight your naturally optimistic outlook.
Big contracts and high-profile deals look good on paper, but when push comes to shove, all that matters is leverage. To get and hold onto leverage, you need money in the bank to comfortably meet payroll and expenses while waging legal battles or self-funding new growth. Despite signing on the dotted line, clients and partners may choose to disrespect agreements or contracts out of need, malice, or simply as a negotiating tactic. Know that if your cash flow dries up, you won't have any room to negotiate.