Luigi Franciosi Shares 4 Difficulties of Running Your Own Business
In many ways, it is easier now than ever before to become an entrepreneur. When you have an idea for a business, you can add it to an investment platform like AngelList or Kickstarter to market it to a larger demographic to generate funding, interest, and even to hire staff. There are options when you don’t have the funds to purchase office space, like special co-working spaces or teleworking.
The truth is, however, that running your own business still presents many challenges and because there are so many entrepreneurs, it can be difficult to come up with business ideas that stick.
Luigi Franciosi of Coquitlam, British Columbia has been able to convert his pharmaceutical expertise into a profitable consulting business, but it hasn’t been easy. He identifies the four most common arenas where entrepreneurs struggle.
Understanding “The Numbers”
For most business owners, understanding and crunching the numbers is not the most exciting thing about running a business. However, says Luigi Franciosi, knowing how to maintain financial statements is often the single-most important skill that leads to business success.
If you feel less-than-proficient with accounting software or spreadsheets, seek the help of an accountant or bookkeeper.
In a cash flow statement, you can keep track of all the ways that money enters (sales) and exits (costs) your business. Usually, a new business’ costs exceed sales at first, but you should be able to watch your sales overtake your costs fairly quickly.
Another important financial tool to use is the break-even analysis. Your “break-even” is the exact sales figure that pays all your business costs. It tells you how many units you need to sell in order to pay your bills. Anything above break-even is your profit.
The leading problem that entrepreneurs have is getting the funding that they need to launch or grow their business, says Luigi Franciosi.
Newer businesses have a more difficult time securing funding than existing businesses. Nevertheless, startups can take advantage of SBA loans or unsecured personal loans.
For existing businesses, you can submit your company’s financials to your bank in order to qualify for funding.
Some businesses seek help from investors. In order to acquire investor funding, you typically need a full business plan and strong presentation skills.
Knowing the Customer
Too many entrepreneurs make the mistake of assuming the wants and needs of their customers. It is not enough to have a great product — your business needs to address a pain point in the lives of your customers.
You will not be able to understand the pain points of your customers without collaborating with them. The most effective entrepreneurs work hard to speak with and listen to what their customers have to say.
Knowing your customer requires patience and emotional intelligence. But in the end, it can make the difference between success and failure. The best customer relationship is one where it’s a ‘win-win’ for both the customer and the business. The customer gets the product or service they wanted and the business gets a sale and possibly a repeat customer in the future.
Scaling the Business
Scaling a business is somewhat different than simply growing a business.
Some business owners make the mistake of growing their business by increasing their workload. According to Luigi Franciosi, the trouble with this approach is that you only have so much time and energy in the day.
The key is to make ongoing investments into your business that allow you to do more with less. These investments include adding critical software/technology, hiring capable staff members, and finding ways to lower operating costs.
Final Thoughts from Luigi Franciosi
Despite the risks and difficulties of running your own business, it can also be highly rewarding. It can be fulfilling to work for yourself and run your own empire. It is important to remember; however, that just like with anything else, it’s not for everyone.
Luigi Franciosi is an Adjunct Professor of Pharmacology at The University of British Columbia and owner of Franciosi Consulting Ltd. As a PhD graduate of UBC, Luigi has over two decades of experience in clinical research, drug development, operations and project management as well as a decade of experience in seniors care industry.