Entrepreneurship: balancing big dreams with hard realities | 5 Lessons by UMAIN
In the dynamic world of startups and scaleups, change is the only constant. While it's essential to have a strong vision, you also need to stay practical. Success often depends on balancing these two aspects. That means it is crucial to surround yourself with partners who both understand your vision and help you face challenges realistically.
With their motto “it's all about U,” accountancy firm Umain emphasizes putting the client at the center. They offer extensive services to help startups and scaleups from the initial idea to further business growth. Olivier Verhaege, director at Umain, shares his five key points that will help startups and scaleups ensure they stay successful and relevant.
1. Where is the money
When thinking about funding, people often focus on external investors to find money. However, Olivier suggests looking internally first, especially in the early phase. "Often, startups overlook internal resources. Founders go hunting elsewhere for the money, while it may well be right under their noses.
Are margins correctly set? Are invoices issued on time? Do customers pay promptly? If not, who is going to chase them and when? These are primary funding sources that often get ignored. You know, the so-called low-hanging fruit. All to often the focus is on working, getting new customers, ensuring your product or service is scalable. But meanwhile, the basic work of ensuring your startup is solid gets overlooked."
Entrepreneurship is about dreaming big, but also having the courage to face the harsh reality.
2. Spend your money wisely
Money makes the world go round, but especially in the early phases, it goes in one direction only: out. It's all too easy to get sucked into making costs that later on often don't turn out to be essential. Bootstrapping, avoiding unnecessary expenses by being smart and frugal, lets you avoid unneccesary expenses and frees up means to make crucial investments.
Olivier advises evaluating all costs critically. "We see it all the time: the entrepreneur is hurting for cash, while making many costs that are not or not yet necessary in the early stages of the startup."
"Consider insurance: are they all necessary, or can some be adjusted? If not, which ones can we cancel? Rent is another expense where there tends to be a lot of room for improvement. Assess your rental space: is it too large or unnecessary in the early stages? Be really critical: do you really need the space, does it make sense to move or to sublet part of your office space? Does this location really bring additional value to our business?
Car costs, expenses made for sales & marketing, some general overhead costs are thought of as self-explanatory and as a result, are not looked at critically enough. Especially in the early days, when the first turnover is generated.
Bootstrapping really is the key here. Examine all expenses, even small ones, as they add up. Get together with your accountant, comb through your expenses and determine each and every one is really necessary. The reason behind each cost should be justified and clearly understood".
3. Know your customer
Customer knowledge is key to success. It is of crucial importance to truly know your customers, not just to build relationships but to explore new opportunities within your existing customer base.
Olivier says, "It is so important to really know your customer. First and foremost to establish the relationship, of course, but also because there is a massive untapped potential market among your existing customers. Before seeking new customers, look for those business opportunities.
With new customers too, you have to be really precise about determining who gets to be your customer. Sometimes you have a potential lead where you sense the perfect match with your product or service just isn't there. Before you know it, you're going full steam ahead in the wrong direction. Be strict and clear about which market segment is your customer base and which isn't.
Always ensure there's a good match between your product and your target market, even when you need funds. Especially when you need funds! Always keep your vision front and center and remember: entrepreneurship is a marathon, not a sprint. "
4. Fail fast
Always face reality head-on, and as quickly as possible. Direct and open communication is vital. "Address issues head-on, and don't shy away from addressing difficult topics. Especially here in Flanders, we often see that people are much too nice for eachother. This doesn't help you as an entrepreneur," Olivier notes. "It's better to have a clear view of what is going on, so as not to lose precious time with things that are left unsaid. As a result, conflict is avoided, but so is business growth."
"An objective third party, like an accountancy firm, can provide a clear, unbiased view of your financial situation. Having someone go over the numbers with you, with a strict and objective view, can be very helpful. All too often the founders need to take off their rose-tinted glasses and face reality. Avoid creating a false sense of success and ensure you adapt your product based on market feedback. Entrepreneurs who spend too much time trying to take an untested MVP to the market are wasting precious time without any updates to the product nor any market research.
Instead of trying to gain new insights, they're constantly looking for reassurance that they're doing the right thing. That is not the way to do business: entrepreneurship means chasing your dreams while facing the hard reality. That combination of dreaming and having a sense of reality is what allows you to grow."
5.Do hard things
Founders often focus on what they enjoy doing and/or what they are good at, while neglecting necessary but less enjoyable tasks. Olivier stresses the importance of addressing these challenges, either by tackling them yourself or by involving specialised partners.
"The things the founders like doing, that they're passionate about, these always work out well. Because these are the areas that get most attention, because the founders know they are good at it, like doing it, are passionate about it. When things go wrong, it tends to be due to tasks that they aren't good at or don't like doing. Yet ignoring tasks you dislike can lead to problems. These are the tasks to address first. Either handle them yourself or find someone who can. Because what matters for your business is that things get done, not how passionate you are about doing them.
Actually, the areas that are less enjoyable to you have a higher chance of success. You don't get lost in your own momentum and vision on how it should be, so you take a more objective view and don't let things slide.
The biggest possible mistake is to get caught up in a vicious cycle. You don't like doing it, so it gets cast aside. And it remains an open issue, gradually annoying all parties involved. So, get on with it, do the things you love, definitely also do the things you don't love or find someone who can do them for you. For areas like accounting and finance, consider getting external help like Umain. Then you can tell us 'hey, I'm running into this issue' and we can help you make your dream, vision, or idea a viable business prospect."
Balancing dreams and reality
An entrepreneur's journey involves constant evolution. Your dream may tell you where to go, but reality determines which steps you take to get there. Balancing dreams with reality ensures sustainable success. By embracing these principles, entrepreneurs can turn their visions into reality with a solid foundation.