“Business should be fun. If we don’t think it will be fun, we don’t do it” – Richard Branson
So you’ve decided you’re gonna’ start a business. Congratulations, you’ve taken the first steps towards being your own boss and breaking free from the rat race. If you do this right, you’ll make a lot more money than you have before, but if you do it wrong, you’ll end up worse off than where you are now. So what can you do to make sure you do it right?
Starting and running a business is no easy task, and making it work takes twice the work it takes to advance in your job. If you’re idea of being the boss is to lie in a hammock all day and give orders out, you’re headed for failure fast. There’s an old saying “heavy lies the crown” and like all old sayings that have stood the test of time, there’s a reason for that.
That being said – for those who are up for the challenge, it’s worth it. You call the shots. You steer the ship. Nobody can chew you out for coming to work five minutes late, and if you’re successful you’ll make more money than you believed possible as an employee.
Before you begin, there’s a couple of essentials to consider. If you get these right, you should be well on your way to success in business. Don’t skip a single one of these. A business is a lot like a house of cards, when one falls, the house falls. Fail to pay attention at your peril.
1) What are you offering?
It’s all good to want to make money – everybody wants that. Your potential customers, however don’t give a damn about your bank balance and profit margins, they care only about getting what they want at a competitive price. The key here is this: don’t sell what you want to sell, sell what consumers want to buy.
Thousands of hairbrain businesses open up every year pushing junk nobody wants and products that will only last a few months at most. Guess where they end up? Nowhere. Loserville. Up top of the scrap heap. If you want to avoid the same fate, you had better have a long, hard think about what you have to offer and what your potential customers want. What will they buy from you, but more importantly, why will they buy it?
Richard Branson, one of the most successful business leaders in the world has said that they key is to solve problems for a profit. What problem are you going to solve or need are you going to fulfill for your customer? I guarantee if you get the answer to that question right, most likely you’ll have success.
2) Who’s the competition?
One thing is for certain, where there’s money, there’s someone already making it. No matter what you do and who your customer is, there’s going to be competition, and if there’s a lot of money to be made, there’s going to be a lot of it. Even if you do come up with a completely original idea, as soon as you go to market there are going to be imitators.
There are two things to remember here:
First, you’re going to need a strong and readily identifiable brand to compete. Consumers today are bombarded with millions of messages a day to buy this and try that, 99% of which get’s filtered out. How will you stand out? Why will the customer remember you? How will you offer superior service and customer satisfaction to ensure they remember you, say good things about you, and come back for repeat business?
Second, don’t be intimidated and allow your idea to be stillborn just because there’s stiff competition. That’s what losers do. Winners learn from their competitors and figure out how to beat them with a good strategy, rather than cowering away and saying “I could never beat them”. Most industries are BIG pies, and you don’t need to get the whole pie to get rich. Sometimes, a tiny little slice is enough to make you filthy rich for the rest of your life.
3) What is your marketing strategy?
Marketing to a business is like breathing to a body. If you don’t do it, you won’t survive. A good business should have a well put together marketing plan, which despite common beliefs, does not have to be very expensive.
Depending on the kind of business you start, there are several effective ways I personally have used to get the word out about previous ventures. I’ll outline them now, and you can decide which ones work for you.
Flyers – The old classic technique of flyers works. I personally had 10,000 flyers printed for $150. That’s a good deal! In the beginning I just hired folks to hand them out willy-nilly, and I can advise you not to do this as it will not be effective. If you’re going to hire a team to help you, go out into the streets with them and do the work, otherwise half your flyers will end up in the trash or in the wrong hands. It also helps to think about who your target market is – if you’re advertising expensive language lessons like I was in my first startup, don’t go hand out your flyers in areas where you know people are broke or outside a ladies fashion boutique. Go to where your competitors are, and operate near there. TARGET your flyering for much greater success rates.
Online – Google Adwords can be a miracle. I launched my first website with a $100usd per month budget, and I decided to pay the lowest possible amount per click, 1cent. Within a month I had 3000 unique visitors and at least 50 promising leads. I learned from this that it is better to pay a higher price for quality prospects, but if you don’t have the budget, just try this high turnover method and I guarantee it will lead to inquiries and probably sales.
Publicity – Richard Branson, founder of the phenomenally successful Virgin Group is the master of this. He has received tens of millions of pounds in free advertising over the years, often making the front pages of newspapers with his publicity generating antics. Use your creativity and think of ways to get in the papers, it could be a charitable donation, it could be a prank of some sort (Branson famously drove a tank into Times Square and shot Virgin Cola at the Coca Cola sign) or it could be something unique to your own business. Whatever you do, inform the press and make sure it’s legal. Who dares wins.
Traditional Print – Don’t go down this road unless you have quite a big budget. I recently priced advertising for a full-page print in a popular newspaper where I live, and it cost $8000 per day. This is simply not possible with my current business budget, although I’m sure it would have been effective. There are many other smaller publications with a wide reach I am considering, but it will all depend on price. Think deeply about this and make sure the publication you chose will direct the right kind of customers to you. Again, don’t advertise computer parts in a magazine about sports.
Freebies– Everyone loves something for free, but there’s no such thing as a free lunch and we all know it! That lunch is costing somebody something, somewhere, and they aren’t giving it away out of sheer goodness. A freebie can be a powerful marketing tool, and I deeply advise you try to use it. Here’s a great example: when I was launching my language school, I invited members of my target market to come to a free seminar. It led to several sign ups and was well worth the two hours of my time it took to put together.
There are of course other ways to market, but I myself have experience only with those mentioned above. If you really want to get the word out, you will find a way whatever your budget. Always remember, 99% of marketing is about generating trust, and that’s why word of mouth is still the best form of advertisement. People TRUST their friends and family more than they trust you. It’s as simple as that.
4) Consider all the angles
Before you wander into the depths with fistfuls of dollars ready to make a fortune, be sure to pause, reflect and work out the numbers. I don’t care how passionate you are about a product or service, if it costs $5 to produce and the market will only pay $4 for it, you are screwed from the outset. You would be amazed how many people actually don’t think about this, or do think about it but don’t factor in all of the costs. Think about everything – packaging, transport, distribution, fuel costs, advertising, rental of a store if needed, all of the above will eat away at profits and very often consume them whole. Make sure you think it out, and if you don’t have a big budget, consider starting an online business instead.
5) Don’t get personal
Starting your first business can be emotional. It becomes a life form of its own. It can be emotionally destroying to have to let go of it when it just isn’t working. The business often evolves in ways you hadn’t imagined when you started it, and if it begins to hemorrhage money, it can be very difficult to get through denial and realize the game is over.
A business is just a vehicle for making money. While passion and drive are surefire ingredients in making it work, you also have to realize that sometimes it just won’t make money again. Markets change, economics dictate what people spend, and new competition comes along and does it better. Just look at the numbers and if you’re consistently losing money, know when to call it quits and focus your energies on other, profitable ventures.
To use an example from Richard Branson again, he actually cried all night when he had to sell of Virgin records to finance his airline. This was his baby and his first mega-success, and it was extremely difficult for him to sell it off. Regardless, he did what needed to be done and the gamble paid off, with his airline becoming one of the most successful businesses he has ever created. It has ultimately evolved into greater things, and next year he will launch the first commercial flights into space.
As hard as it can be to let go, sometimes we need to face the moonlight and just do what we need to do. I advise having an exit strategy set up before you start: don’t be the gambler at Vegas with no set number in mind on how much he’s willing to lose. Know when to call it quits fellas, and don’t allow yourself off the hook. Emotions lie, but numbers don’t.
That’s all for this post. If anyone has any questions or wants any further information on how to start a business and get it off the ground, leave a comment below and I’ll be happy to help.
Desire. Decide. Persist.