OK! OK! I get it.
You hate your job. Your company has the morals of a pit viper. Your boss couldn’t find his backside with both hands. Your co-workers are a bunch of mindless robots.
You dream of being free. You dream of the day you can do a Johnny Paycheck and tell your boss, “Take this job and shove it!”
You dream of running your own business. Setting your own hours. Getting rich.
But…what kind of business are you going to start?
The purpose of this series is taking a hard look at what it’s like to start a business from scratch.
Let me start out by saying everyone should be able to start and run a successful business. That said, starting and running a business isn’t easy.
Your chances of success will increase dramatically if you are able to answer some tough questions. These questions are not meant to discourage you. They mean to inform you.
I have started several businesses in my career. One or two made it. The rest failed.
To anyone interested in starting a business, I would point to Winston Churchill’s famous quote, “I have nothing to offer but blood, tears, toil and sweat.” To that, I would add, “Joy!” If you choose well, you will endure blood, tears, toil, and sweat. But, you will also experience the unrestrained joy of accomplishment. And…that joy will transcend everything else.
I think choosing falls into two categories:
1. You already know what you want to do.
2. You want to do something different from what you are doing now.
If you already know what you want to do, you are halfway there.
Let’s tackle doing something different.
First I would ask, “What are you passionate about?” What do you love doing so much that you would gladly do it every day…for free.
Got it? Now can you earn a living at it? If you love it, other people must love it too. If other people love it, will they pay you to help them get it? How can you use your passion to fill that need?
Every successful business fills a need or solves a problem. This is how you make money. People trade you the money they have for the need you fill or the problem you solve.
“But,” you say. “Can’t I just get rich selling stuff on the internet?”
Well…maybe. If just making money is your primary goal, you can do that. In my opinion though, you’re going to miss the joy.
After all, aren’t you quitting your day job because you’re miserable? Being happy and having fun at what you do should be number one on your list. Otherwise, all you’re doing is trading one form of misery for another.
If you’re having fun, you won’t mind the blood, tears, toil, and sweat. You might even enjoy them.
Joseph Campbell once said, “Do what you love. The money will follow.”
Is there a demand for what you want to do? One way to find out is to Google it. See how many companies are out there doing what you want to do. How big are they? Where are they located? How much do they charge?
Here is the biggie. What can you offer your clients/customers that is better than what is already out there? Don’t be shy. Just because one of your competitors is a Fortune 500 company, it doesn’t mean you can’t deliver better than they can. In fact, you probably can deliver better than they can. Why? Because you offer personalized service. When the phone rings, you answer . You make house calls.
And…yes! People will pay for service.
Next, ask where the market is for what you want to do? Is it local, regional, or national. Is it a product or a service?
If it’s a product, where are you going to get it? How much does it cost? How much inventory does it require? Do you need a bricks and mortar space to sell it out of? If the answer to that question is yes, how much will that cost?
If you are going to make the product, what kind of facility are you going to need? Will you need employees? Are they skilled or unskilled? Where will you find them?
I can hear you saying, “Holy Cow, do I really have to know all this stuff?”
Yes. Because as you answer these questions you are beginning to build a business plan.
“Ah, crap,” I hear you whine. “Do I really need a business plan?”
Because you have to know where you’re going.
I know you have images of a 50 page bound document full of charts, statistics and timelines. I assure you it won’t be like that.
In the beginning you need to answer this question, “What does success look like?” Be very specific. Your answer to this question should have the following elements in it:
- It should be positive
- It should be stated as if it’s all ready accomplished.
- It should be very specific.
- It should have a completion date.
Let’s say you are an accountant and you want to open your own practice. Success might look like this: By (fill in the date) I have obtained (Fill in the number) clients who will pay me an average of (fill in the number and add the phrase “or more”) for accounting and consulting services.
Now start listing the steps you need to take in order to get there. Nothing complicated just the steps.
Step one might be: Get one client I can work on during my spare time.
Step two might be: Get another client.
How many clients do you need before you quit your day job and open an office?
Not so hard is it.
One thing to note here. Be very careful that your success statement is about something you want, not something you don’t want.
Something you don’t want might be: “I don’t want to be broke.” Focusing on what you don’t want will sabotage you every time.
Our minds are very powerful goal seekers. If you focus on what you want, your mind will do everything it can to create the circumstances to help you achieve your goal. But here’s the odd thing. If you keep saying “I don’t want to be broke,” your mind is conjuring up scenes of you being broke. Because your mind doesn’t recognize negatives, it takes being broke as a goal you want, and it will start figuring out ways for you to fail. Add a lot of emotion to it, and your mind will make it happen sooner.
The trick is to take what you don’t want, (I don’t want to be broke) and turn it into something you do want (I want to be rich). Remember you have to be specific. Make it, “By (fill in the date) I am earning $500,000 or more a year.” Focus on that.
The last question I would like to ask is about money. How will you sustain yourself while you are starting out?
If you are going to start out with a few clients that you work in your spare time, like the accountant we discussed, then the time to make the transition is when your new clients can sustain you in the style to which you are accustomed.
If you are going to take the leap, quit now, and start your new business I have 3 questions for you:
1. How much do you have socked away to pay your personal living expenses at your current rate of spending? I would suggest at least a year.
2. How long do you anticipate being in business before you can start paying yourself enough to meet your current standard of living? Now add six months to that.
3. Where are you going to get the money to cover your business expenses during start up? Again I would suggest at least a year.
Why is this important? Because, if you are constantly worried about how to pay the mortgage payment, or where the money is going to come from to buy this week’s groceries, it’s hard to stay focused on what you want.
The first time I started a business, I had a great partner and we had a good plan. My problem? For 20 years, I received a pay check every two weeks like clockwork . The day after we opened our new office, I realized I wasn’t getting a paycheck any more. I was terrified. It affected my performance. Having a year’s expenses safely tucked away in a separate bank account would have saved me a lot of grief.
Answering the money question will save you a lot of grief too.
There is one other major consideration. You need to understand that whatever your product or service is, in the end it’s a commodity. What is your vision for the way that commodity is delivered to your customer? Look at this quote from The E-Myth Revisited, by Michael Gerber.
“Said another way, the Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important— the way it’s delivered is. Thus, the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created. It understands that without a clear picture of that customer, no business can succeed.”
Gerber, Michael E. (2009-03-17). The E-Myth Revisited (Kindle Locations 1030-1032 & 1036-1038). HarperCollins. Kindle Edition.
Remember at the beginning of this post I said every successful business fills a need or solves a problem. But…that isn’t enough. You must have a very clear idea of who your customer or client is. Once you have that, you have to figure out how to deliver your answer to their needs in such a way that they are overjoyed. It’s how the customer feels at the end of the transaction that determines your ultimate success.
You will probably have a lot more questions. The list above is certainly not all inclusive. There are a lot more issues we need to discuss. I intend to cover those issues in subsequent blogs in the “Starting From Scratch” series.
How are you doing? Have you answered all the questions I have posed? Have you thought of things I haven’t asked? Did you come up with answers for them?
How do you feel? Are you excited, charged up, can’t wait to get going? Have you got all those nagging worries answered or at least turned into positive goal statements?
Then choose. Get ready to enjoy a wondrous journey full of hope, joy, accomplishment, satisfaction, and yes, blood, tears, toil, and sweat. I assure you there is no better feeling than to look back years from now and seeing what you’ve built and the people you’ve helped.
And…let me know how you’re doing.
Until next time…
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