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How to Launch a Business When You Know Nothing About the Industry
Those who prefer to play it safe in the business world often preach a "stick with what you know" mentality, but plenty of successful entrepreneurs have operated under the "no risk, no reward" school of thought and come out on top. If you're thinking about starting a business in an industry that's unfamiliar to you, don't let a lack of expertise prevent you from pursuing your goals. Building a company in uncharted territory takes lots of hard work and dedication, but it's absolutely possible. Here's how:
Be honest with yourself about how much you need to learn
When breaking into a new industry, it's important to be realistic with yourself about how much base knowledge you actually posses. Even if you're an expert in one side of your budding startup, you may be completely clueless about other aspects of the business.
Bill Rinehart, who is the chairman, CEO, and founder of DUFL, wrote in Fast Company that figuring out what you don't know is a critical step to being successful. DUFL is a service that ships, cleans and stores business clothing to make work travel easier for busy professionals. While Rinehart and his partners were well-versed in the realms of media and digital technology, they lacked travel expertise. By identifying the holes in their collective expertise, however, the DUFL team was able to set realistic goals and grow accordingly.
Do your homework
Once you've established your blind spots, it's time to start learning. Support Biz explained that the most effective way to gain knowledge is to study potential competitors. Take a look at industry leaders' production processes, marketing and branding techniques, sales plans and distribution methods. This will give you a better idea of industry trends, as well as what business strategies and advertisements you should consider emulating.
Conversely, it's crucial to study the business models of similar startups that weren't so successful. Inc. magazine spoke to Nick Reese, founder of Elite Health Blends, who noted that analyzing failure can be the key to your eventual triumph.
"There can be thousands of factors that contribute to business success, but when a business fails, it's often easy to pinpoint the the reasons...and avoid making the same mistakes yourself," explained Reese to the publication.
And while scoping out the competition is important, make sure not to underestimate the power of good old fashioned literature. Entrepreneur magazine stressed that businesspeople attempting to break into new industries can't consume too many books and trade publications. If you're not sure what materials you should start with, call an industry organization and ask for their recommendations. Take notes while you read so you can consolidate key points into a cheat sheet for future reference.
Get a mentor
Just like you'd hire a tour guide to lead you through an unfamiliar destination, you'll want to find a mentor who can steer you in the right professional direction. Mentors can not only be incredible resources for insider knowledge, but they can also prove essential in areas like networking. Travis Steffen, who founded WorkoutBOX, told Inc. magazine:
"A mentor is pretty much your most powerful asset in any new industry. By finding a mentor willing to work with you, you can learn from their mistakes, accelerate your growth using their knowledge, insight and strategies, and get pre-qualified introductions to big players in your space."
Don't be afraid to contact industry leaders by phone, email or LinkedIn. You can also find mentors by attending networking events and trade shows.
Be open to growth
While you might be confident in your original business plan now, your opinion of it may change as you learn more about your new industry. To be successful, you're going to have to be open to this change. Support Biz explained that successful startups don't operate like they have all the answers - they're committed to figuring out their weak spots and tweaking their original visions so they're more market-friendly. Listen to the advice of industry experts, keep the customer in mind and always try to improve and grow.
Hire short-term employees
You're going to need help if you want to break into an unfamiliar industry, but the lack of certainty surrounding your chance of success means you shouldn't hire a full-time staff just yet. Fast Company explained that the best strategy for startups in sensitive situations like this is to hire short-term staff as needs pop up. More often than not, this strategy helps businesses stay flexible enough to survive while they also build a really solid grassroots team. The people who come on as contractors in the very beginning often end up being permanent employees later on.
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