I’ve been asked by a website called Brazzlebox if I would write a short post for my blog sharing the absolute first three things any budding entrepreneur should do when starting their business. Here are mine. These are in no particular order of importance, they all need doing at the beginning. Get used to juggling, People!
Run Your Idea by Someone Who Knows
Run your business idea by someone who knows, someone who’s been there before you. Let them ask you the hard questions about how many of your new thing you need to sell to pay your bills. As I like to say to my clients, “Show me the money!” I need to see a route to you being able to sell a whole bunch of whatever your thing is, be it product or service, in sufficient numbers to make your business work. Seek advice, ask opinions but be sure in your own mind too. This is your thing but it can also be confidence-building and reassuring to get the endorsement of a brutally honest mentor who will get you to think about things you’d rather not.
Prepare the Ground Financially
Slash and burn your budget to as low as you can go. Run lean, you’ll never regret that for as long as you are self-employed. Every $1 you don’t have to earn or spend is time in the bank for your start-up. You might have to make some hard choices about what’s important to you. Will you give up such things as a car, gym membership, holidays? What’s vital when you had a day job probably isn’t now. Matching this new lean monthly overhead from profit on sales of your entrepreneurial thing is your first monthly target. Then you are in financial integrity and you don’t have to waste any energy worrying about lack of money to pay your bills. Before you get to that place you might be going without things you could never previously imagine.
Get a freedom fund in place before you start. It could easily take you much longer than you think and much longer than you have patience for until you become financially viable, so give yourself some freedom from money worries by stashing enough to pay your bills during the first phase of your business.
Clients have been known to do this by a variety and combination of:
- A part-time job, no more than 2-3 days a week otherwise you won’t have time to work on your biz
- Inheritance, redundancy, savings; they’ll run out, guaranteed!
- Your other half pays the bills for as long as it takes.
- 0% credit card but only if you are confident you can keep getting access to zero-cost finance otherwise that’ll bite and bite hard. I wouldn’t recommend this one, but people do it.
- Get a business plan and investors who believe in you.
Allow up to three years for your business to hit a rolling boil, where the phone just rings assuming you’ve done everything right. Know too that this freedom fund is a double-edged sword in that if you feel too financially comfortable you may not do what needs to be done to launch. The bigger the fund the longer the launch runway and the smaller the fund the more scary the ride. Which do you choose?
Ask for the Business and Be Visible
Offer your thing to people in return for cash. Strangers are best. Friends of friends next. Friends will be too nice in an attempt to encourage you, you cannot build a business out of sales to friends, and they cannot afford to buy stuff from all the start-ups they know. Be careful with family, they will err on the side of nasty in a mis-guided attempt to keep you safe and in a day job like them. They love you, they don’t want you taking risks.
Learn about marketing (educating the world your product or service exists) and sales (exchanging your thing for cold, hard cash) and make sales before you give up the day job. If you cannot sell your thing to strangers for money, you haven’t got a thing. Don’t give up the day job until you’ve proved that works and that you can do it. Remember the new lean monthly target. Can you sell enough in a month to meet that target? How easy/hard is that? Did you love it? Ka-ching!
Get orders. Makes sales. Collect the money due to you. There’s no substitute for these and if you haven’t got the stomach for it (or the team), then the sooner you know that the better. I’m not sure you can build a business without coming to love both marketing and sales.
Got a great name for your business? Grab the URL, the Facebook Page and the social media profiles in that name but don’t make them beautiful or waste time getting all these ducks in a perfect row – yet. Beautiful ducks are expensive in time and money and completely unnecessary if your product/service is any good. Under no circumstances wait until you have your website and your business cards ready before you ask for the business, this is just vanity and procrastination and faffing about. You care more about this than any of your customers ever will and there’ll be plenty of time for beautifying all of this later. Do not allow this to get in the way of asking for the business.
Decide on a marketing strategy. How are you going to tell the world you and your business exists and how your products and services help people? In 2016 people want to be entertained or informed. Does your thing do that? People will invariably buy what they want before what they need, so your job is simply to create desire and you can’t do that if not enough people know about you and your thing. Be visible and make it easy and delightful for people to pay you so that they may enjoy your stuff too. Make the world a better place.
#1 Read, read, read, study business books and stand on the shoulders of giants. Ask me if you’d like a recommended reading list. Listen to podcasts too.
#2 Join a community of your new peers, other people just like you who are trying to make a go of it in the entrepreneurial world. They’ll help you settle in and feel your new “normal”, and you’ll be supported and understood, and you can get vital ongoing feedback.