At Kona Impact, we love working with entrepreneurs! We love to see someone take an idea and make it a viable, sustainable business. We love to see people get rewarded for their innovation and hard work. It is, after all, what has built this country.
We have worked with hundreds of businesses and have completed thousands of projects over the years. We have worked with teenagers and retirees, PhDs and non-high school graduates, multi-millionaires and people scrimping to buy groceries. We like to think we have seen it all.
I was talking with a young entrepreneur the other day about business and doing business in Hawaii. He was inquisitive and seemed to be searching for ideas, so we spent some time going through the basics of business. Here are four ideas I shared with him about becoming a successful entrepreneur. Based on what we have seen in our ten years of business, they are important.
Get a Good Understanding of Business Law
I’m not saying you need to become a lawyer, nor do you need to hire one for a lot of your business decisions and day-to-day operations. You do need to understand what licenses you need for your business to operate, a proper business entity to register, your tax obligations, and you need to have an understanding of contract law.
I see a handful of businesses a year that seem to want to create their version of basic contract law. At a simple level, there is “offer” and “acceptance.” For example, if you come to Kona Impact and discuss a project and we offer a specific product, and you accept the offer verbally or in writing, you have entered into a contract. When that product is delivered or produced, you are responsible for paying for it. For certain, there are many nuances to this part of business law, but it’s important to have a fundamental understanding of the “offer-acceptance” nature of business. There is nothing that will turn off suppliers or partners more than a client or customer that is unreliable and is operating under flawed reasoning about legal responsibilities.
Here’s a pretty good primer on business law. It’s just a start; you need to learn more!
Don’t Get Caught Up in the Manini (the non-consequential)
A business owner will make hundreds of decisions a day, some of them of great consequence to the business and many decisions of less importance. Focus on the three things you think will drive sales, innovation or productivity and spend as little time as possible on the things that don’t add value to your business.
If you’re spending hours on a business card, you are wasting time. If you spend a substantial amount of time on social media checking out what your friend’s had for dinner last night, you’re wasting time. If you find yourself putting off sales and marketing tasks while working on polishing the silverware, so to speak, you need to stop and start doing the hard work of the business.
Know What You Know and Be Willing to Admit What You Don’t Know
The most successful business owners I know in Hawaii are masters at doing what they do best and hiring good people to do other tasks. Seldom do I see an entrepreneur who does the sales and marketing, accounting, design, product delivery and customer service work at an “A” level for each. It’s just impossible to be good at all, so why waste time doing a thing for which you are inefficient? If numbers are your thing, hire a salesperson. If you’re a people person, and you would rather get a root canal than do the accounting and payroll every month, hire an accountant.
I see a lot of sole proprietor businesses where the owner is trying to do it all, and in the end, does nothing very well. Sadly, these micro-managers also tend to over-focus on the unimportant, robbing their business a true chance of success.
Starting or running a business is tough, and despite the best planning and intentions, a lot of businesses die due to running out of money. They might have survived over time, but the owners ran out of funds too early.Watch Full Movie Online Streaming Online and Download
At Kona Impact, we tell new entrepreneurs to have a year of operating capital when they begin. They should keep half their marketing budget for the second half of the year. We like to say, “you don’t know what you don’t know,” so have enough reserves to get through the unexpected.
If you want to bias your business for failure, make bad legal and contract situations, focus on the inconsequential, try to be a “know-it-all” and start your business under-capitalized.
Want bias for success? Read up on business law, focus on the big issues, delegate, outsource and have reasonable financial expectations and resources.