First Steps to Business Startup.Why do you want to start your own business, anyway?
What's does starting a small business need to be about, then?
How do you plan to go about starting a business?
When do you want to start your own business?
What do you expect to get from your business?
Why do you want to start your own business, anyway?
Be very clear what your motivation is. If you do this, then you are less likely to fall on your face at the first hurdle. You will want to be tough on yourself by asking difficult questions. Ask "why?" more than once!
Being clear about your purpose in life must come first. If you don't know what it is - search for it before you get launched into the business; it will guide you and your actions. Don't forget that it will be something far greater than your body, mind, ego—or wallet!
Committing to a vision for your business is how you will know if you are on the right track
as you start your own business and as you develop it. Remember the Japanese proverb, "Vision without action is a daydream. Action without vision is a nightmare."
Being passionate about your small business idea is vital. Loving what you do will be one of the big reasons for your success. If there's no love for the business, it will be almost certainly doomed to fail. Steve Jobs says, "You've got to find what you love."
Having a clear intention for how to start a small business and banishing doubt will leave space for the realization of your business dream. Believe in what you're doing and feel its presence right now.
If your number one objective is to seek wealth, it will probably mean that a business startup is the wrong means of achieving your goal. You do better to learn about the stock market, the real estate business and other means of becoming wealthy. The Art of The
Start is a very different way to go. You do not have to lose your shirt and you need Never Bet the Farm. In fact, if you do, you will probably not survive in business. You'll probably be looking for money in which case, consider possible Investors in Your Backyard. You may be seeking other things, like autonomy and the belief that what you are setting out to offer is better than anything that is currently available. As
a consequence, financial reward may flow.
Be able to describe your business very succinctly. If you were telling the in-laws, what would you say? Can you get it down to 30 words? Sounds easy, doesn't it? Actually it's more difficult than taking 30 minutes to deliver the answer. Some people call it an 'elevator pitch'. Make sure it is focused on the user and the benefits. Here's mine:
"Six million people in the US are thinking about starting a business at any one time. I'm a business startup counselor who helps people get their businesses to start sooner, develop stronger and last longer. I work with them on personal and business development. Can I help you?"
Where's the business going? Do you aim to stay independent or do you want to build a saleable operation? What's your timeframe? How is the business going to get there? What are the stepping stones and signposts? Can you identify the critical success factors? How will you know if you've got there and when?
I'd like to encourage you to read a very short Guide to Creating Your Own Good Fortune: Setting Standards for Business Success that I wrote for the work.com site of 'how-to' guides. You may also want to take a look at Savvy Business Planning. I also recommend that you take just over half an hour to watch Guy Kawasaki talk about the Art of the Start—you won't regret it and it'll save you a lot of time. You might also want to try the Startup Business School from Fresh Tilled Soil. You can try three of their (short) modules for free; if you find it helps then you can sign up with SBS—it's run by entrepreneurs just like you, with experience building businesses from the ground up. Their expert advice and simple step-by-step process will save you time and money.
What does starting a small business need to be about, then?
Start a business where you have experience. Avoid picking a business from a catalog. You need to have knowledge of either the product you are going to sell, the market for it, the process of getting the product to the market or the technology involved. Otherwise you are going to waste valuable resources.
Of course you won't know everything, so be a sponge—in the market, the wider environment and in the world of ideas. Read and surf widely. Talk to people in the know and above all find out what customers want in your line of business.
Determine your business model. Ugh! What's that? It's the way you intend to generate revenue and profits as well as how you plan to serve your customers. It's how you
New business models demand creativity, respect and honesty. Here is a tool for you to use:
Savvy Business Model Planner
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Criteria |
Characteristics |
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Value Proposition |
what customer problem is to be addressed and how will the customer get value from the solution to be offered? |
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Resource Allocation |
what resources are needed and how will they be they configured to optimize delivery of value? |
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Market Segment |
what is the potential market segment and how specifically can it be defined? |
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Value Chain |
what role is to be played in the chain of value from inception to consumption? |
| Distribution Chain |
what means of promotion and direct and/or indirect distribution will be used to reach the market? |
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Revenue & Margins |
what method will be used to generate revenue (e.g. fees, leases, subscriptions) and how are margins determined? |
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Market Position |
what place is to be obtained in the market relative to what is or has gone before? |
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Differentiation |
what will make the offer special and distinctive in the eyes of customers? |
| Branding | what is the character of your business, the heart of its products and how does the customer experience them? |
You're going to need to offer your customers more in use value than in cash value. Think about it. Of course, there will be payment, but the transaction needs to be a pleasure, not a pain. If not your business is not going to delight you or the customer and it's long term health will be in question.
At the same time, realize that your own business startup is going to need to be effective. The process of getting your customers must be efficient. If it costs you too much in time or money, you're less likely to fix your gaze on strategy. You'll need to make a good gross margin on sales. Not to profit at the expense of your customers, but
to allow for your own mistakes—you won't win every time. You need to think
about how new customers will
become long term ones. Getting new ones is always more costly than serving old ones. Satisfied customers will come back for more and tell their friends. Make sure your actions live up to what is spelled out in your marketing plan.
Now you may want to take a look at Savvy Business Planning, Savvy Marketing, Savvy Business Finance or Savvy Business Organization.
Welcome to WorkSavvy / Entrepreneurship & You / First Steps to a Business Start / Savvy Business Planning / Savvy Business Finance / Savvy Marketing / Savvy Business Organization / Savvy Web-biz / Sustainable Business Startup / Savvy Business Resources / About WorkSavvy! / Lift Off newsletter / Contact WorkSavvy : will @ worksavvy.ws
How do you plan to go about starting a business?
Have you prepared yourself mentally for the challenge? What impact is your new business going to have on your personal and family life? This does not need great study, but you will simply need to be aware that your lifestyle will be different. You'll be preoccupied. Priorities will change. You'll need to decide whether the changes are worth it to you and those around you. Ask yourself—and them, how will their roles change?
Have you thought about when and where you're going to start? This sounds like a pretty basic question, but what things do you need to attend to before you launch your small business startup? Once you get going, you don't need the additional stress of things that have been left undone. Are you going to start the business on the kitchen table, a garage or are you going to need premises?
What resources are you going to need? Is your computer, a credit card and a phone service enough? Do you need money from somewhere else, and if so, how much from where? Can you start your own business on your own? Do you need partners or staff? Will you survive for long enough with reduced or no income?
How can you best structure the business? Can you start as a sole proprietor, do you need to register a business name? Do you need to incorporate—as a limited company, a partnership or a corporation? What are the costs, benefits and process.
You'll hear two messages about the merits of a business plan. One says don't write one - just get on and sell. The other suggests the full you should prepare the full version. The first is likely to lead to problems and lack of focus. The latter is probably only necessary if you are going to seek venture
capital investment. But a plan will be necessary, however simple. The
process of preparing it will mostly benefit you, as it helps to refine thinking, spot pitfalls and open up the opportunities. I would not know how to start a business without one.
You're likely to be bubbling with ideas at this stage. I have a suggestion: have you ever heard of Affinity Diagrams? It's a very effective technique and the only equipment you need is stickies. If you click Affinity Diagrams - Organizing Ideas Into Common Themes, you'll find a very good description.
For a look at small business startup from a completely different perspective, read my article, Taking the Helm: What business startups can learn from dinghy sailing.
When do you want to start your own business?
What's stopping you making a start right now?
Nothing, but...
... and goodness knows how many other excuses you may offer yourself.
None is valid! Not one!
Here's why:
1 Compound knowledge. The sooner you get selling, the sooner you'll get feedback from customers, the sooner you'll know what they want, what features of you offer are missing. In other words everything will be conjecture until you get knowledge from customers and compound your knowledge. Accumulated knowledge comes from your experience in business, too. How does the invoicing work, what are the delivery glitches, what costs had I forgotten? The greater your knowledge—in principle—the better prepared you are and the more likely that you'll made good decisions. Knowledge is a form of wealth. "Like wealth, it provides dividends if it is invested. Over a long period of time, those dividends compound." So says Michael Masterson of Early to Rise.
2 Compound interest. Three factors here: the first is that money today is worth more than money later, by the simple effect of inflation and the fact that you can use today's money to invest in tomorrow's revenue. The second is that when you are selling nothing, you are still spending, so your resources are dwindling without replenishment. The third is that if you actually save any of the revenue, you'll be amazed at the effect of interest on interest. Here's a little grossly simplified example: if you start with $1000 and your money grows at 12% (what savvy stock market investors expect) you'd have $3106 at the end of 10 years. Just imagine the other way round if you are borrowing and the interest you have to pay is compounding! Click the moneychimp if you want to do a real calculation.
3 Compound Procrastination. Putting off the start date will be cumulative. I knew someone who kept saying, "I'll just do one more prototype and then..." He'd overlooked the fact that the mayor of his village was a prospective client (the mayor was a senior manager in a big company) and if offered a prototype for free, could have provided user feedback saving masses of time and a good reference for future sales—"... and my client at Mega Corp found that he...". Over any period, one economic indicator may improve, but the chances are that another will turn against you. The time will never seem to be right—so the start will never happen. You are going to succeed by being creative and looking for opportunities, not problems.
4 Compound Sales. The customer to whom you sell today potentially becomes a repeat customer tomorrow—at much lower cost than acquiring another new customer, provided that your service exceeds expectations. The sooner you can build a client base, the better. Customer loyalty can build exponentially. Of course you have to do other things right, but each new customer adds more than the cash value of his purchase to you, too. You've no product to sell yet? You can still start selling! Meet your prospects and see what they need; qualify them; pre-sell; use sales as market research.
5 Compound Success. Chances are that you're a person already concerned to achieve more. If so you'll be looking to find ways that you can change and adapt. Those ways will be ones that fit your own being. However I suggest two books that might set you on a good course. the first is The Strategy of the Dolphin: Scoring a Win in a Chaotic World by Dudley Lynch & Paul Kordis; though published in 1990, it's as valid today as it was then. You don't need to think of yourself as a shark in business. You are smart, ambitious, and want to succeed. You can use your dolphin abilities: adaptability to change, capacity to search for the elegant solution to every kind of problem, as well as your desire to work with the system and with others toward a common end. Strategy of the Dolphin will enable you to develop your creativity, break through obsolete thinking, and act upon your own compelling visions. Of course dolphins like to win, but they know that others don't have to lose at their expense. The other is The Power of Intention; Learning to Co-create Your World Your Way, by Wayne Dyer. He explores intention—not as something you do—but as an energy you’re a part of. We’re all intended here through the invisible power of intention. The book looks at intention as a field of energy that you can access. I have taken the lessons to heart and use the associated deck of cards as a daily reminder of the messages.
If you intend to start a business, nothing will get in your way.
Welcome to WorkSavvy / Entrepreneurship & You / First Steps to a Business Start / Savvy Business Planning / Savvy Business Finance / Savvy Marketing / Savvy Business Organization / Savvy Web-biz / Sustainable Business Startup / Savvy Business Resources / About WorkSavvy! / Lift Off newsletter / Contact WorkSavvy : will @ worksavvy.ws
What do you expect to get from your business?
Here's the kind of things you'll get:
Self-actualization
If you give life to your own creativity through your own business, you will most likely feel good. Tired maybe, stressed too perhaps, but sensing that you are contributing something. Yes, of course you'll enjoy some of the other rewards to do with money or relationships, but they are likely to propel you higher up the hierarchy of human motivation.
Maslow's Hierarchy of Needs: A Theory of Human Motivation,
by Abraham Maslow, published in 1943.
Transcendence
When considering the psychologist Abraham Maslow's work, some people these days add a level above Self-actualization. They call it the 'Transcendent' level - the spiritual level beyond the normal or physical human experience. You first need to satisfy the most basic needs, before you can move up the scale. The business creator will inevitably aim high. You will experience delight through service. Offering tangible or intangible things to others, that meet their unmet needs or wants. I have no idea about your own personal belief system or spiritual adherence. We haven't met. However, I would like to recommend two short books to help you on your way. The first is The Seven Spiritual Laws of Success: a Practical Guide to the Fulfillment of Your Dreams by Deepak Chopra. I have it near me and refer to it frequently to remind me of my purpose. The other is even shorter: The Law of Success: Using the Power of Spirit to Create Health, Prosperity, and Happiness by Paramahansa Yogananda. The book is very inspirational and gives guidance on highest achievements and lasting success.
A very handy checklist for business startup can be had at my partner bizfilings website by clicking here.
Three books to read and then keep close at hand:
Which are the best countries to start and run a business? According to the World Bank report Doing Business in 2006, the top ten countries where it's easiest to start a business are Canada, Australia, United States, New Zealand, Singapore, Hong Kong (China), Puerto Rico, Romania, United Kingdom and Jamaica. The top ten countries for ease of doing business are New Zealand , Singapore, United States, Canada, Norway, Australia, Hong Kong (China), Denmark, United Kingdom and Japan.
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Welcome to WorkSavvy / Entrepreneurship & You / First Steps to a Business Start / Savvy Business Planning / Savvy Business Finance / Savvy Marketing / Savvy Business Organization / Savvy Web-biz / Sustainable Business Startup / Savvy Business Resources / About WorkSavvy! / Lift Off newsletter / Contact WorkSavvy : will @ worksavvy.ws
William Keyser • WorkSavvy LLC • will @ worksavvy.ws
