At some point in the first five years 90 percent of all start-ups fail. Launching a business for an immigrant entrepreneur is different and definitely more challenging.
Here are some things to consider to achieve business success.
Know the four Cs of underwriting: Character, Credit, Cash Flow and Collateral. Using alternative sources of investment capital is certainly a solution for many potential borrowers. Working with a lender to get a first loan and a rigid repayment discipline will set the stage for higher levels of funding. Persistence is the number one criteria needed to acquire the capital needed to launch and grow a new enterprise. Lenders have heard hundreds of pitches for financial support. Don’t give up. There is a lender out there for every sound business plan.
Research your initiative. Use the Business Model Canvas (www.strategizer.com) to begin the research needed to assure that you have identified the problem to be solved and that there are customers who will pay for your solution. Begin with your Value Proposition (what need, want or desire is being fulfilled?), Customer Segments (for whom is the solution aimed?) and Channels (how will the customers be reached?). Then validate the idea with potential customer segments. Not friends or family. Understanding the market, its dynamics and why its customers buy is fundamental in building a new business. A business plan is a must to act as a guide to achieve success.
Ask for help. Another active ingredient in small business success for the immigrant community is to seek outside help. Because there are so many moving parts in giving birth to a small business, looking for and finding a mentor to guide the process is sound advice. All beginners make mistakes, but they can be avoided by having subject matter experts guiding the launch and growth making those mistakes less likely to be expensive.
Reach beyond your comfort zone. Small business ownership is a lonely proposition for anyone especially when venturing into a new frontier that is outside of one’s comfort zone. That is why programs like incubators and accelerators are so valuable especially for immigrant populations. Getting advice and counsel from mentors at SCORE or from cohorts at EforAll work to break through the comfort barriers.
Adopt a goal-oriented mindset. Goals and objectives are critical to being successful in launching a startup, followed by measuring those goals and objectives. Hard work is not enough. Passion for the mission through focused, time oriented, quantified goals and objectives is the driver for starting up a business in a new culture and economic environment where the language may even be different. Any new business must identify the problem it is solving and stay focused on that mission.
Become part of the community. Knowing the market is fundamental, but understanding the preferences and buying behaviors of the people in the immigrant’s new community helps understand how to sell and serve it. Learning the language, joining the local chamber of commerce, networking group or Rotary Club are ways to become part of the local culture. This is the way new immigrant businesses comprehend how to sell to their target customers.
Immigrant business success depends on capital formation, assimilation into the community and differentiating their offerings, but most important is being customer focused. Listen to everything the customer says about the business and how it performs, then act on what is heard. Leadership needs to be a lifelong learner so that every day the owners learn something new to assure that their launch becomes a growing profitable enterprise.
Marc L. Goldberg is a Certified Mentor, SCORE Cape Cod & the Islands. More information here, or call 508-775-4884.