Simple guide to starting a business
A few weeks ago, a friend of mine informed me that he was thinking about starting a business and wanted some information about the Entrepreneur Life. Not sure what entrepreneur life means, but we set a good date and time to discuss my simple guide to starting a business. Having been in business for 12+ years, I know a thing or two about how to start and grow a successful business. As well as I am forever networking.
We meet at my favorite watering hole (coffee shop) and began discussing his business plan. He was in the process of setting up a t-shirt company. Not trying to destroy his dreams, I quickly provide him with my simple but hard guide to starting a business. We discuss his business goals, products and services, target audience, marketing plan, operational structure, retaining an attorney and certified public accountant, and understanding his finances.
This is huge. What are your goals? Does your venture replace your 9 – 5 job? Are you going to be available to work 40 – 60 hours a week? Most new entrepreneurs really need to know that we work a lot of hours. Advising him that he will have to wear a lot of hats. Operations. Sales. Finances. Proposals. Contracts. Plan on how to deliver his services. A lot more than what is expected from a 9 – 5 job.
Not trying to discourage him, I thought it was important to dismiss the myth about most of us work on a few hours a day, and make buckets of money. It is just not true, for most of us. We (entrepreneurs) work a full day, as we are trying to grow our organization and provide revenue for our organization and families.
Products and Services
Knowing exactly what you are going to be selling or what services you are going to be providing is so essential to your success. How are you going to get those products and services to your customers? Are you using 3rd party vendor to send out the products and services?
Are you providing top notch products? Are you providing top notch services? Have you done some test runs, discuss your services with others…let them question you process. Make sure you are able to expect the unexpected. Do not fall into “someone is going to steal my ideal”, so I am not going to discuss my business with anyone else. You need someone to discuss issues that you have not thought about, what happens if the payment was from a stolen credit card…what happens for returns on purchased 30 days ago? What happen with returns on merchandise that has been worn? These type of situations need to be address prior to opening shop. And you will never identify all your upcoming headache.
Who is going to be purchasing your products and services? If you think everyone, then relax because that is just not going to occur. Figure out who your ideal client is…make sure your product and/or services are something they would like to have. Make sure you are in touch with your target audience. Ask your target audience, if this is something that they would like to have…and more importantly are willing to pay for.
Most startups fail, because of not knowing their target audience. Just because you write a children’s book, does not mean everyone will enjoy it. Not every grand mother, teacher, and parent is running to purchase your book…some parents are just not going to do it. Figure out who your target audience is…reach out to them and make sure that they know you exist on a daily basis.
Second reason most startup fail. You have products or services. You have a website. You have a facebook page. Your phone never rings. You are wondering why no one wants to purchase your products or services. News flash, because your target audience does not know that you exist. You have to have a marketing plan.
In today business world, you can use social media. You can use a blog. You can attend local conferences. You can use national conventions. You can have your family and friends tell others. You have a lot of marketing strategies. You need to use several and measure them to determine which one is most useful. Also their are many branding and marketing companies, use one.
Now you have your marketing plan up and working. Your phone or email is providing you with business. How are you going to be able to send your customers’ their new products or services? How are you going secure payment? What about returns? How do you deal with a disgruntled customer, and we all have them? Are you going to use a 3rd party vendors, like a drop shipping company? What is that process going to look like?
Take your time and remember to be flexible with your process…their is always going to be something which you might have to implement or delete.
Retaining Attorney and CPA
My business mentor, once said to me “Grow up…you have a business, and you need to treat it like a business.” You will need to obtain a business account. You will need to retain an attorney to look over your contracts. You might need some legal advise on a disputed issue. You will need a Certified Public Accountant to help you with your business filings. Some folks are savvy enough to not hire an attorney or CPA, but I am always of the mindset to hire the professional…and allow you to spend quality time on your business.
What are you expecting and needing your business to provide for you. If it is to replace your 9 – 5 job, then you will need to pay yourself a salary. The salary has to be similar to what you make today. This might mean making some scarifies in terms of hours working or new marketing plans in the future.
Money is another reason why startup fail. Not the lack of funds, but the lack of proper plans for incoming money and how to make sure you are saving for that raining day.
Image courtesy of Rod Long.
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