- Define your objective – not everyone goes into business just to make money. In today’s economy, side gigs and lifestyle businesses are in vogue. I call this “Doing business intentionally”. Dr. Steven Covey wrote, “Begin with the end in mind” in his classic “The 7 Habits of Highly Successful People”. Reverse engineer your business before you start it. Are you looking to spend more time with the kids, make some fun money or replace your full-time job? This information matters.
- Learn from others’ mistakes – free information is available everywhere in an instant. Not knowing what you don’t know, should not be an excuse for failing anymore. There is no such thing as too much knowledge and obtaining it is an investment in time that costs zero dollars. A word of caution. Find credible sources, such as an experienced entrepreneur that will be honest with you. Everyone knows how successful Walt Disney was, not many knew “Walt Before Mickey”, a movie that shows the resilience it takes to start a business. Walt was flat broke, evicted from several offices and made a gut-wrenching financial decision that could have ruined his family for good before achieving success. He made it, obviously. Keep in mind, for every: Walt Disney, Steve Jobs or Jeff Bezos, there are thousands of heart-breaking stories from others whose decisions did not work out as well.
- Know the problem you solve – I tried selling bookkeeping, accounting, and tax preparation services for over twenty-five years. I was always able to get clients through networking, referrals and sometimes sheer luck. I never had a successful “marketing campaign”. It wasn’t until 2010, I started studying sales and marketing to learn that people don’t buy products and services based on logic, which is how I approached it. Logic can come into play, but only after the seller conjures up emotion in the prospective buyer. The easiest way to reach an emotional pain point is by identifying their “perceived problem”. As long as they believe it’s a problem and you know what it is, you have a chance at making a sale and generating revenue. The “perceived problem” can be deciding on where to vacation or figuring out next springs “In colors”.
- Know your prospect – I cannot stress how important this is! You need to put yourself in their shoes and feel what they feel, see what they see and hear what they hear. What gets their juices flowing? What are their values, dreams, desires? Forget about what they “need”! Everyone “needs” a dentist but most people don’t go until they have a tooth-ache.
- Know your product or service – If you’re selling widgets, you need to know how those widgets solve your prospects “perceived problems”. Ask yourself, “Is it easy for a prospect to understand and see exactly how the “offering” fills their need and is it in their budget? Is it packaged and appealing enough to make an easy decision?” When a potential prospect cannot understand how your product or service will help them, they will never buy. Think about the relief a client will feel when they experience your product or service, tell them how they will benefit.
- Document personal finances – most people have only a rough idea of their financial health. This is a crucial step because too many new business owners go, “All In” without knowing the risks. This is where logic hopefully kicks in and brings an investor back down to earth before losses mount. Knowing exactly what you have and how much you can afford to lose, can save you a lot of pain and misery. I’ve seen too many people go to an inspirational event and come home ready to quit their jobs and take out a second mortgage. People go bankrupt because they are full of optimism and unreal expectations. Look at your numbers realistically and know what’s at stake.
- Map out startup costs and monthly business expenses – This may be the hardest of all because of the simple fact that you have nothing to base it on. Start with the things you know you’re going to need like a website, phone, office supplies, technology, software subscriptions, accountant, lawyer, insurance, licenses and permits, etc. Add the “Fudge Factor” for things that will come up that you don’t know about yet like taxes (only if you plan on making a profit), travel, networking events, etc. Take the info and look at each item and decide if it’s something you “must-have” and I guarantee you, even some items you think you “must-have” are either not needed or can be done for free.
That’s right! You don’t need any money to start your business off on the right track. In fact, after working with thousands of businesses over a thirty-five-year career as a CPA, I’ve found that most people that have money wind up wasting it, myself included! The truth is, I’m an entrepreneur who became a CPA because I wanted to learn about business. Boy, did I learn “What not to do and what to do in business” during that time. Today, I use my experience to help entrepreneurs avoid the mistakes I’ve seen made over and over again. We spend time and money on useless do-dads, invest thousands in three-day events and hire people we believe will lead us to the promised land, only to find out that they’re looking for it themselves. The truth is that no amount of money can buy success. If it were that easy anyone could just take out a loan (been there done that), pay it back and live the life of Riley. That’s not reality. Reality is this: According to the SBA “50% of businesses fail in the 1st 5 years” and according to Forbes “8 out of 10 businesses fail in the first 5 years.” Regardless of who’s numbers you believe starting a business and staying in business is tough. My advice is to leave your checkbook at home because I’m going to provide you with the secret sauce that the inspirational event organizers don’t want you to know. These are time tested, proven strategies, used by millions of successful entrepreneurs to start a business, before spending a dime. There may come a time when you need to reach into your piggy bank, many times revenue can be produced before that is necessary. At the very least, this information can save you some of the pain and suffering new business owners endure. HERE ARE THE STEPS