5 Core Principles for Starting a Business
March 6, 2019
One of the best things about the United States is that virtually anyone can start one. Business is what drives the United States’ economy and keeps the nation strong. Considering how accessible starting a business is in the United States, many new entrepreneurs dive straight into opening a startup the first chance they get. However, several key principles must be known before one can successfully start a business.
Here are five key business principles crucial to starting a business.
1. Always Have a Clear Business Strategy
Not all businesses have a clear business strategy, which will expose its weaknesses for a variety of reasons. Implementing proper strategies will help assess current and future risks and produce ways in which they can be avoided. Core business strategies can be broken down into three different categories:
- General Strategy – A general strategy refers to how a given objective will be achieved. An objective can be anything from making a specific amount of money in profit to acquiring X amount of new loyal customers before a given date. Once an objective is properly identified, the tactics used to reach that objective are considered the “how”; thus, are what make up the general strategy.
- Corporate Strategy – A corporate strategy refers to the choices and commitments made regarding markets, business and the nature of the company itself. A corporate strategy clearly outlines the choices and commitments one will make to execute their business strategy successfully.
- Competitive Strategy – A competitive strategy refers to business competitors and the nature of competition itself. A competitive strategy identifies competitors, the cost of leadership, the business’ focuses and differentiation. A good competitive strategy creates a long-term plan that will allow a business to gain a competitive advantage over its competitors. Also, a sound competitive strategy will ensure the business will keep its market share during tough times while positioning itself to gain ground within the marketplace as competition struggles to adjust.
2. Understand the Industry
Before jumping into an industry, one must ensure they completely understand that industry inside and out. The more that is known about an industry, the easier it will be to create excellent business strategies. It becomes easier to identify what is missing from an industry. In addition, a businessperson who understands their business’ industry will find marketing much easier.
Marketing requires one to be fluent in not only the economic or technological trends of an industry but the psychology of its consumers as well. Consumer behavior is a core element to any business industry, as, without a consumer, there is simply no business. Those who understand how their customers shop and how their customers think are able to market their business successfully more often than those who do not.
Understanding an industry may even result in one choosing to leave it. There is a countless amount of industries that flourished in the 1900s but cease to exist today. Technology has advanced quicker in this life-time than any other, and those leading the technological revolution have no interest in slowing down their technological development. If it’s clear an industry will quickly become obsolete, those considering to enter it will likely reconsider.
3. Always Try to Focus on What Makes the Business Unique
While it can definitely be easy for one to become fixated on how their business is ranked in terms of performance, focusing on what makes a business unique from its competitors should never be forgotten. Markets can become quickly saturated with any specific product or service, and it typically leads to businesses that fail to differentiate from one another fighting for survival. The best way to ensure a business comes out on top in a competitive market is to prove to consumers they won’t find such a product or service from anyone else.
Focusing on what makes a business unique goes hand in hand with understanding the industry itself. It’s crucial for a businessperson to understand their industry in order to successfully identify what that industry is missing. Businesses that offer unique products or services that an industry lacks are more likely to be remembered as one that revolutionized the industry.
The worst thing one could do is copy everything their competitor is doing. Peeking at competitors and how they operate is a great way to get started with a business, but a great business person focuses on what they can do better and what their business has that their competitor’s business does not. The attention span of a consumer is short, and businesses will have to offer something new if they are to remain relevant.
Learning from the Smartphone Industry
The best example of a company that is struggling to be unique would be a company that develops smartphones. Global smartphone shipments decreased in 2017 from 1.473 billion units to 1.465 billion after constant growth since 2009. In 2018, it decreased even further by 61 million with 1.404 billion units being shipped worldwide. One of the biggest drivers for this decrease is a saturated smartphone market.
Many find the technology available on the market today is lasting much longer than the technology available in 2009. In addition, key figures in the smartphone industry such as Apple and Samsung are having trouble developing something new when it comes to their flagship smartphones. Apple is famously credited for redefining what a smartphone is with the release of their iPhone in 2007. Today, many critics complain each model released is no different than both its previous generation and every other smartphone available on the market.
With that said, consumers do not feel incentivized to run out and purchase a new smartphone each year, as it’s essentially the same as the one they already own. Critics and analysts strongly emphasize Apple and Samsung’s need to diversify and “do something different” in order to grab the attention of smartphone consumers today.
4. It’s Okay to Say “No”
The business world is a fast-paced one that can be challenging to keep up with. It’s easy to understand why an entrepreneur starting a new business would turn to their competitors and even other successful businesses not directly related to theirs for guidance. Understanding when to say “no” is key to building a successful business.
Trends quickly come and go, and businesses must choose whether or not they can successfully profit during its lifecycle. While it may seem like every business around is participating in a particular trend, sometimes it’s okay to sit that one out.
A great example of this would be businesses engaging with the latest trending memes. In some scenarios, this can work out perfectly. A great example would be the fast-food chain Wendy’s posting content relevant to trending memes on their official Twitter account. Their Tweets have managed to make people across the Internet laugh and appreciate Wendy’s brand more.
— Wendy’s (@Wendys) January 3, 2017
In others, this scenario can actually hurt
Saying “no” to the current trends on the Internet may save a business from embarrassment, public shaming, etc., and should always be considered when deciding how to operate a business. It’s also true that choosing to remain out of a trend could potentially cost a business a considerable amount of traffic – but it ultimately depends on the business and trend itself.
5. Reach Out for Help
It’s almost impossible for one person to build a successful brand all by themselves. Businesses are a team effort, and the most successful businesses reach out to others for products and services they cannot create themselves. Whether it would be purchasing materials necessary for production, commissioning a web designer for a great branded website, or seeking consultation services to better market their business, reaching out for help is one of the most important things any business person could do.
The Next Step
While this article was able to explore five core business principles that every businessperson should know, the amount of additional principles and techniques out there is seemingly limitless. Building and managing a business that is successful takes time, dedication and an innovative mind that can quickly adapt to the evolving market. Entrepreneurs seeking to start their first business and managers seeking to lead theirs to the top should always be ready to collaborate with others and learn something new.
Apex United Corporation focuses on business and support solutions that cannot be found anywhere else. By offering premium marketing services at an affordable price, Apex United is able to save clients money and grow their business. Business owners start their businesses with the goal of earning money, and Apex United makes it infinitely easier for them to ultimately achieve and exceed that goal.
