03 Oct Business 1.0: Before You Start
No matter where you are in your life, the thought of starting your own business may have crossed your mind. And that’s great! In my humble opinion, every good idea deserves a chance. However, many of those stay in the drawer, because their owners get scared off by the predatory world. If you feel discouraged and scared away by the claims that starting your own business is a huge step in a man’s (or woman’s) life, don’t let them hold you down any longer.
I’ve spent almost my professional life dealing with small business owners who have tried and succeeded, or tried until they succeeded. Talking to them and observing them, while putting my own business experience to a good use, I’ve observed that starting a successful business is not so much about reading lengthy articles and books on the topics and following elaborate advice. I’d even say that it’s the complete opposite of that. Have a bit of courage and the right momentum, and chances are that this is all you’ll ever need.
Or at least it’s a start.
The first step is the hardest
Before we get to the actual start of your own business, we need to get through the hardest phase: determining the nature, the size, and the target groups of your unborn company. The best way to figure this out is by asking yourself the following questions:
- Is there a steady demand for the product/service? From whom?
- What is the market situation of the product/service that I want to offer?
- Who are my competitors, why are they successful, and how will I differentiate myself from them?
- Do I have a personal relationship to the area of business I want to get into?
Answering these four simple questions will quickly put you on track towards starting your very own business. Just take your time to do your research and to get to know the market, the competition and the potential customers very intimately.
Once you’ve gone through the initial questioning phase, now is the time to go out and meet people. Networking is important throughout your whole entrepreneurship career, but it’s especially important when starting a business. You have to spread the word yourself, go to events, get talking to people from relevant business areas about your own company. Go for all the attention you can get.
While you’re at it, start looking for skilled and enthusiastic people you’ll want to work with. In a young business there’s no space for solo players and closed minds – surround yourself with people who share your idea, drive and vision, and are good prospects for teamwork.
Stay away from the idea that you’re the only one who understands everything. You can be your own boss as a freelancer, but when starting even a small company, it is vital to immediately establish your role in it and distribute all the other work among people who’ll know what they are doing. If you take too much of a workload on yourself, your dream could be over before it even starts properly.
It is no coincidence that the English word “company” originates in the Late Latin word “companio”, meaning ‘companion, one who eats bread with you’.
Business is all about money, that’s a fact. So what’s important to think of while starting out?
It is a life-saver for a company to get the cash flowing as soon as possible. You can do this by adding value to your goods and services, such as fast delivery or free bonuses for payments in advance, or subscription fees rewarding customers with advantages, so that you can shrink the period between producing and selling and actually getting paid.
An important thing about cash flow is that it needs to stay positive under all circumstances. So find ways to cut the costs down without damaging the quality of the product or service. You can buy secondhand furniture for your shops and offices, use freeware to manage your business (at least initially), and there’s so much more. Look into it, and find your own ways to save money.
My last piece of advice that has proven useful to me throughout the years is to expect things to cost more, and your earnings to be smaller. Only that way will you keep a healthy reserve and avoid running into unexpected surprises.
Being modest and conservative at the beginning of this journey is difficult. You’re pursuing your dream, after all! But building up a company from scratch is just like cooking stew: it takes a whole lot of time and patience, and if you rush it, take it off the cooker too soon or boil it too hard, you’ll end up with an useless bucket of garbage, no matter the quality of the idea and the ingredients.