Start Your First Business Right with These Essential Steps
He wanted to catch the ball and make a spectacular entrance into the pool. Instead, he crashed on the concrete floor with a sound that let everyone know his life was about to get really complicated — if there was even life left.
They rushed him to the emergency room.
Over the next few weeks, Derek Amato would have trouble remembering, come down with crippling migraines, and make breathtaking music at the piano for hours on end. That’s right, due to the brain jarring accident; Amato has developed what’s known as acquired savantism at the age of 39.
His life will never be the same.
This is an extreme case of discovering your abilities and starting a new path in life. Amato is now working on his music full time and transforming it into a business, but what about you. Are you working on the projects of your choosing as much as you should?
I’m not going through blunt force trauma to unlock hidden abilities in my mind. I don’t suggest you do either.
Instead, there are simple systems and best practices you can follow to become just as good or even better than Amato in a business of your choice. It won’t happen overnight, but as long as you keep learning, you’ll get where you want to be.
Enter the steps for starting your very first business.
Identify and Research Your Business Idea
The most important step — the reason why it’s first — is having a clear picture of what REALLY want to do. It’s nice to say you want to work with engineers, but that could mean anything. It’s never fun to start a business with half-baked ideas. You’re free to pivot, not wander.
The best way to figure out your most promising project is having a conversation with yourself. Before you go out and do real research, before you talk to potential customers, and before you even tell your best friend.
Go get a pen and paper.
I have to dispel a myth, group brainstorming does NOT work. In an article in Basic and Applied Social Psychology the results of a study on brainstorming were published. The study focused on the quantity and quality of ideas produced by group brainstorming vs individual brainstorming.
Individual brainstorming won hands down.
Generally, brainstorming groups are significantly less productive than nominal groups, in terms of both quantity and quality. Stronger productivity Toss was demonstrated in the context of (a) larger groups, (b) experimenter presence, (c) tape-recorded vocalization of contributions (vs. writing of contributions), and (d) in comparison to a nominal group of truly Alone individuals (vs. a nominal group of Together individuals).
The moral of the story is you can come up with amazing ideas all on your own.
You have your pen and paper right? Now it’s time to ask the pointed questions to really figure out what you want from your new business.
- Fun or hobby based business (e.g., making paintings that you sell on the weekends)
- Part-time lifestyle business that could become full time (e.g., running a fitness website that documents your own journey and techniques while selling associated affiliate products)
- Do you want a full-time startup hoping for acquisition exit in a few years (e.g., are you the next Slack or Uber?)
- Large, cash-flow positive business (e.g., importing and exporting goods and tapping into marketplaces like Amazon FBA)
- Path to industry credibility and networking (e.g., blogging with a particular emphasis on training and guest posting.)
Turn to a fresh sheet of paper, come up with ideas, come up with different groups of people you could serve. Instead of using demographic data — which can be limiting at this point — use descriptive language to for the customer groups.
Jump all over the place; don’t limit yourself strictly to what you know because you’ll weed the list down later.
Chiropractors with small to medium practice, insurance agents with less than 50,000/yr in sales, pharmacists, entrepreneurs that work too much, and office workers with high personal debt. These are just a few to get you thinking.
Spend at least at least 3 Pomodoros on this.
b. Personal Evaluation
By now, you’ve got a decent list of ideas that you’ll return to later. It’s time for a quick personal evaluation. It’ll let you know if you’ve got what it takes because business is not for everyone.
When you’re starting a new business, there’s no one to hold you accountable or make sure you meet deadlines. You’re the taskmaster, employee, and the brand ambassador. In a nutshell, you must be a self-starter and a self-finisher.
- Can I hold myself accountable?
Just like with being a self-starter, you’re going to have to hold yourself to a higher standard. You can’t cut corners because it’s not the reputation of “the company” at stake. It’s your name and business at stake. Will you be able to make the tough decisions, prioritize, and do everything else needed to make sure your business runs smoothly?
- Do I have or can I acquire the expertise I need?
To start your first business successfully, you’re going to need a wide range of skills. You don’t need to start with all of them, but you better be able to acquire them. Take stock of all the general skills you have to start a business eg., writing, marketing, sales, design, inventory, distribution, etc.
- How much time can I devote to my new business?
The rate at which you achieve success is directly proportional to how much time you invest in your business. I know you’ve probably seen those posts about spending only five hours a week on an online business. If that’s what you want to do then just forgedabboutit.
When you factor in all the time you need to network, do accounting, create content, manage employees, promote, etc., you’ll soon realize 5 hours a week is a joke.
- Am I a creative problem solver?
Starting your first business is an exercise in solving old problems in a new way. Whether that’s becoming more efficient or motivating your team. You’ll soon realize in order to achieve breakout success, you’re going to need a healthy dose of creativity.
- What are my strengths and weaknesses?
Write down in list form all the things you believe are strengths and all the things you believe are weaknesses. They can be business related or not.
- Will the work I’m doing interest me enough to keep me going when I don’t immediately meet planned targets?
This is a big one. It’s basically saying “can I do this for the rest of my life” If the answer is no for any of the ideas you brainstormed earlier then cross it off your list now. A business is like a marriage, it’s easy to start, but if it’s the wrong one then your life will never be the same. In a bad way.
c. Market Research
It’s time to revisit that list you created before. Take all those ideas and descriptions you came up with in the brainstorming phase.
This is the point at which you can start sharing your ideas with people and do preliminary market research.
Your goals here are to determine:
- The types of products and or services being offered?
- The price points
- The amount of interest in the market
- The major competitors
- The common positioning statements
- Any partnership opportunities
- The marketing avenues entrenched players are using
- The sales process
- The type of content that does well
- Who your customers are/will be (demographics)
- What do they really want from your product or service (this is psychographics)
You’ve probably got a really sizeable list right now so instead of going deep into every idea, just do surface research to gauge your interest. You can research all 11 questions I suggested or just the ones you find most important.
Scale your list down to three of the most promising and do more in depth research on them. This should take you a little time because you want a VERY clear picture about what you’re getting into.
Are you done? Great, it’s time to choose the one you like best and develop a plan.
Get your plan straight
I’m a go with the flow kind of person, but I like to have an idea about where my business is headed. I want you to understand the best plan is never written in stone.
The new business environment is changing at a breakneck pace and anything you write or assume today can be obsolete in a year.
Think of your business plan as a way to map out what you’d like to do and determine if you’re on the right path. It’s not a blueprint, blueprints are followed to the letter. It’s more of a comprehensive roadmap that can change at any moment.
It keeps you, your team, and any third parties on the same page about what the business is about, where you want to take it, and how you plan to make your goals a reality. Bplans has a large library of business plan templates you can choose from.
Historically, a business plan is divided into six parts. You can tweak this depending on what you want to accomplish and who the plan is for.
a. Business overview
The business overview or executive summary is the high level overview of the business you’re starting. It’s where you talk about all the other sections without going into too much detail. Many times, if the executive summary isn’t done well, the rest of the plan won’t be read.
The key here is to hit on the major points and be concise as possible. No long-windeded explanations and no grandiose theories. Just your business, the points, and the goals.
b. Products and services
This is one of the sections of the plan I find really fun. You get to dive into what kind of products and services you’re offering. This is where you talk in depth about your products and services.
What makes them unique, what is the competitive advantage inherent in them (is there a higher level of quality, will you build a strong brand behind it?), and what is the pricing structure of your products?
Go deep; you’ll be happy you did.
Who’s in charge and who’s answering to whom? It can seem like these questions don’t really matter because “you’re all in it together.” They do.
Why are you a good fit for that position (remember the questions you asked in the beginning?), What happens if you leave the business, are there any special skills or contacts you bring to the table?
If you’re planning on having up to a dozen people on the team, create a chart showing how the organization is structured and who answers to whom.
Lastly, list out the key outside vendors you’ll be doing business with:
d. Goals and Objectives
Everything up until this point has been fairy dust because they’ve not been talked about in the context of your goals.
To put it simply, goals are the things you want to achieve while objectives are the steps to achieving your goals.
For example, your goal may be to make a million dollars and a few objectives on that journey may be to:
- Sell 10,000 blue widgets by August 31st
- Sell 4,000 red widgets by November 1st
- Increase productivity by 25% by introducing new management techniques
- Build awareness with new customers by running a $1000 giveaway on Instagram and Facebook
Goals and objectives are two halves of the same coin. The A.C.E.S format is a great one for setting out strong goals.
- Achieve: What do you want to attain in the future?
- Conserve: What do you want to hang on to?
- Eliminate: What do you want to get rid of?
- Steer clear: What do you want to avoid?
This format allows you to define positive outcomes while keeping in mind things to avoid while working towards your goals.
Hit the Ground Running
You’ve done all the preliminary work. Now, you’ve got to do the most difficult thing in the world. Start the actual business. You’d be surprised at how many people mess this one up. You can’t blame them, everything up until this point was easy. You’re in the trenches now.
Marketing, the platform on which your business succeeds or fails. I could never do justice to the nuances of marketing within the next few paragraphs. Here’s my simple advice to you.
Throw everything at the wall. Try Facebook, Twitter, Guest posting, YouTube, Quora, Pinterest, and anything else you can think of. Whatever works for you, double down.
I’ve had success with many different platforms and my current playground is Quora. There are no hard and fast rules to marketing because the field is changing and evolving at a breakneck pace. What worked last year may be saturated this year. What worked last week may have just been a fluke.
When you’re doing your marketing always keep two things in mind:
- Is my marketing truly delivering value as a standalone initiative
- Am I representing my brand in a way I want it to be remembered for years to come?
b. Customer Feedback
You shouldn’t care about what the expert down the street says, you shouldn’t care what that tech billionaire wrote in his latest book, hell, you shouldn’t even care about what you’re reading right now.
The most important thing to take into consideration for growing your business is to focus on customer feedback. Open channels that’ll allow them to give you timely feedback on your products and services.
Without their input, you’re flying blind. I talk about the different ways you can do this in my Ebook The Tribe Builders Handbook.
Iteration comes about based on what’s working for you in your marketing and the feedback you’re getting from your customers. If you’ve seen a lot of people talking about the same feature then it may be a good idea to incorporate it.
If you’ve seen a lot of people respond to a certain type of marketing then it’s probably a good idea to keep at it. This is easier said than done, but that’s what separates you from the average employee.
Iteration is a process, not a onetime thing. Companies last for decades and centuries because they’re able to move with the times. Other companies fail because they are not able to keep a bead on what’s going on in their industry (remember circuit city?). Don’t be circuit city.
In the end, being in business is recognizing what works, what doesn’t, and where you can improve. Much of the time, your business is repetitive and monotonous. Much of the time, it’s a real challenge and gets your blood moving.
Don’t throw away what’s working because you heard about a new best practice. Rather, repeat and scale what you know to be an efficient way to get ahead. Incorporate new ideas and initiatives with a sample of your entire market.
Take whatever sticks and then repeat and scale. It sounds fun right?
Starting a new business is like learning how to walk all over again. You’ll fall many times on the way to being really good at it.
Take the time to ask yourself the hard questions about who you want to serve, what you can bring to the table, and how you can make a difference in the market.
Once those are out of the way, it’s time to plan and eventually execute on your business idea.
Let me know what aspects of starting a new business you think are important in the comments.