For many of us, it starts with a vision.
The idea would be to break into business. Be our boss. Stop feeling like a cog on the machine and make a difference.
Or it can be elaborated. Create the first or best widget in the world. Because I used every other widget out there and they are all missing in some way.
The idea is to start a small business. Creating something brand new. Brick by brick.
I have worked with many small and dozen small businesses over the years. I saw the good, the bad, and the bad. I’ve seen companies come out in the open for over $ 200M, and some fall short of their weight.
So when you have a vision, a spark is there but your heart skips a beat, and you think to yourself: How do I get off to a good start?
To avoid some of the negative actions taken by others, to build a prosperous business; Here’s how to start a small business from scratch:
- Know Your Reason
Simon Sinek has one of Teddy’s all-time favorites, and a best-selling book, also called Start With Why. In it, he talks about the importance of knowing why you are motivated to do what you are doing; and why it should not be included in “making millions of dollars” or “making mom proud.”
It’s about understanding how you want to make an impact on the world. And it’s different, and personally, to each person.
I have found that having a solid foundation for why you want to start a small business makes a difference. When things get tough (and will get harder), you can return to this basic understanding and as a reminder of why you want to move on. As Sinek puts it:
Working hard for something we do not care about is called stress; working hard on something we love is called inspiration.
So ask yourself, ‘How do I start a small business with my Why?
- Be a Complete Student
The most successful founders and CEOs I’ve met are always asking questions. They are confident in what they know but they know they can always learn. This can happen in a few important ways:
Before you start your business, research your market.
Then do some research. Never assume you already know everything about people buying widgets or all other widgets on the market.
Ask questions. Then ask for more. Find people who are smarter than you or have more experience, and listen to what they tell you.
Admit that you do not know everything. This is another critical piece to run a successful business.
I’ve seen it so many times. The founder is requesting “brain selection” of someone who has been through it before. They hire a smart person to be part of a team – an expert in marketing or finance, and then they despise what they say or tell them what to do instead of asking them how best to do it.
A senior manager loses a critical opportunity by not using team members / expertise and does not agree that this team member has much to teach the CEO. It does not diminish the power with the team member again.
- Fold Your Arms
You may have a luxurious title – CEO, Founder or Head Honcho, but when you start a small business, you are also a recipient and in charge of data entry.
In the beginning, you need to be willing to do all the nitty gritty work that goes into your business. You can’t be too good to do anything. Jobs may not be available in your area of expertise. And soon, you will be able to rent and / or share many small items.
But if you do not understand all the small pieces that make your business great, you will not understand how to balance your business and grow when the time is right.
- Enter Growth
I have worked with many CEOs, Founders, and Entrepreneurs, and most of them have one thing in common:
They are Big Picture Thinkers.
They are the ones with the greatest dreams and visions. Murder? Not so much.
So, if you are going to start a small and prosperous business, you need weed control. See details:
Why would blue be the best color for your widget? Who will take incoming orders from outside the US? How do you send your products to the people who buy them?
Don’t avoid details of your business because great photo ideas are so fun.
Dreams and great ideas are essential when starting a business. But if you do not have a handle on any of the details, you will not be able to make those dreams come true. And eventually, your business will collapse like a house of cards.
- Develop a plan that includes budget, expenses and benefits
If you are in that age group, you need to add up the numbers – real, well-researched, well-informed numbers.
Don’t think that you will take 50% in the current market because your opinion is good. You need to create a plan that outlines all the single expenses you would expect in the next 6 months to a year. You need to create a real timeline for product launches and create estimates of how much you will earn on your product, and when.
Without a numerical system, you will spend most of your time responding to what is happening around you rather than intentionally moving forward.
Dave Ramsey is one of the great assets of small business and personal finance. In his best-selling book, EntreLeaders, he keeps it simple. He says:
The business is not that difficult. However, you have to make the basics or you will not win. Make a budget and do an accounting, get out of debt, buy what you don’t need to make a profit, save money, and be generous.
And you need to have a good answer to the most important question – when are you going to make a profit?
- Avoid Shiny Object Syndrome
You have planned your program together. You have researched your market. You know you want to create 2-inch widgets with a beautiful sky shade. You will sell them for $ 1 / widget. Bob the designer has signed up to create for himself. He will launch it in June!
My neighbor Betsy told me she would like a green widget. Should we change the color to green? And Johnny’s teacher mentioned that he could use a 3-inch widget. Let’s change the widget size!
It is very common. We have an idea but what if there is a better idea?
Do your research. Make informed decisions. Then stay in that lesson. You can always hit later.
But if you keep turning your head to everything that glows, you will not reach the goal in front of you. You will never launch that product in June.
- Trust Your Team
A small business may have one founder, but people do not usually start a small business on their own. It usually has a coordinator, partner, sound board. Then there are consultants, accountants, and marketing professionals.
No human genius “zone” is omnipresent. So one of the best ideas on how to start a small business is to find a great team that will help you clear your mind. Spend critical time on final exams and hiring seniors. And let them do their job.
During my years on Wall Street, I saw firsthand the impact of the business when the Founder did not trust their team. I have had hundreds of small private companies set up their businesses for me, hoping that my investment bank will take their company to the public.
The companies that gave me the longest time, the ones that were rarely successful were the ones where the CEO said everything, or when he cut off his team members when they were trying to answer questions.
Because in my mind, when that happened, it meant one of two things: 1) The boss didn’t listen to all the other smart people in the room; or 2) the CEO does not trust his team.
Both of these options were a recipe.
Trying to start a small business can be incredibly difficult. We dream of opportunities but are frustrated by the facts.
Know why and believe in your abilities. Do not try to be the best in the world or to be perfect. Learn and grow and keep trying.
If you do all of the above, you will succeed in whatever way you choose to define that word.
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