How to Start a Small Business
Wealth Creation Mastermind — Jun 20, 2018
You already have a full-time job, but you want more. Maybe you want a career that’s more fulfilling, or maybe you want the flexibility of being your own boss and setting your own hours. Maybe you just want some extra money to build a safety net or take your spouse to the Bahamas for a week-long getaway.
So you’ve decided to start your own business. Good for you! Starting a small business around one of your passions can be incredibly fulfilling, especially if doing the thing you love becomes a full-time gig that pays the bills.
But how do you start a business? Here are 9 concrete tips that can teach you the ins and outs of how to start a business:
How to Start a Business Step 1: Understand Yourself
Why do you want to start a business? Just like with any new venture, why you want to do it is critical, because that will affect the expectations you go in with, and ultimately whether or not you’re happy as an entrepreneur.
Do you want a get-rich-quick scheme that will let you retire to the Bahamas in a few months? Starting a small business probably isn’t for you. It takes hard work and elbow grease to start a company, and your initial sales will probably be lackluster. You can eventually grow a business that will let you retire in style, but it takes a lot of time and hard work to get there. For your first several months, your income will likely be negative as you absorb start-up costs, then will eventually grow into a real income if your business is properly developed over time.
Are you okay with working hard? Starting a small business isn’t for the faint of heart. You’ll have to make sacrifices in other areas of your life to take on this new responsibility. Prepare for that ahead of time.
If you have a business idea, are you passionate about it? If you’re going to spend nights and weekends building a business, you should love what you’re doing.
Are you willing to put in the work up-front for the long-term possibility of financial security and flexible hours doing what you love? If so, then starting a business is probably the right move.
How to Start a Business Step 2: Develop a Product or Service Idea
If you’re wondering how to start a small business, the most important step is to find or develop a product or specialized service.
What do you want to sell, or create and promote? Your business idea should be something you’re passionate about, that you have the skills to accomplish, and that solves a problem that people will pay money to solve.
Most importantly your business should provide a product or service that is unique in some way and solves a problem for your customers that actually matters. It is also critical that your business model is profitable and sustainable. It doesn’t matter how great your idea is, if you can’t make sustainable profits it is worthless as an actual business. Without profits you are developing a hobby, not a business.
Here’s a Venn diagram that lays out the above:
If you don’t have a business idea, then this is the time to do some hard work. You should inventory your own strengths, weaknesses, and skill sets. Do you have a background in marketing and branding, but don’t know a thing about building software? Then building a SaaS (software-as-a-service) business might not be for you, but a side business as a branding consultant could be right up your alley. If you’re passionate about branding, that is. If you’re not (or if you do branding for your day job, and you have a non-compete agreement with your current employer), then keep looking.
At the same time, you should be researching the industry that you want to enter. What other companies, goods, and services are already on the market? Do you have an idea for a brand-new product that no-one else is selling? If not, can you take an existing product and make it better, deliver it faster, or sell it cheaper?
When you’re thinking about how to start a small business, these are the crucial questions to ask.
Whatever your business idea is, it’s critical to make sure that there’s an audience out there that wants what you’re selling…and is willing to pay for it. Which brings us to point #3.
How to Start a Business Step 3: Validate Your Product Idea
This is the biggest mistake that aspiring entrepreneurs make. They think that if people tell them, “Oh, I like this idea,” then that’s enough to validate their business idea. But it’s not.
It’s not even enough if people say, “I would pay money for this product/service,” because as any salesman knows, there’s a big difference between, “I might like to spend money on this,” and, “Here’s my credit card.”
Here are the three steps to validate product market fit.
1) Find an audience
Ideally you should find strangers, but you can also talk to family and friends and co-workers. Build a list of at least 50 qualified leads. You can build a lead-generation page and then buy ads that will send visitors to that page, where they’ll give you their contact information. You can buy leads directly; for instance, if you want to start a branding consultancy business, you can buy contact information for 50 Directors of Marketing at small and large businesses, and then email them. You can even cold-call if that’s your preference.
But however you do it, you should build a list of 50 qualified leads.
2) Tell your leads about your product
You can send them an email about it, call them on the phone, or talk to them in person.
If they’re interested in your product, then tell them the price. Mention that you’re taking orders.
If they don’t buy, then politely ask them why not. Maybe the deal-breaker was small, and you could have closed the deal if you had lowered the price or added one additional feature. Or maybe they weren’t as interested as you thought they were.
Once you have some verified sales, you’ve begun to verify product market fit. If you have a viable product and your business model is sound, you will be able to sustain the business through the difficult early stage growth periods.
Leapfrog Past Product Development
If that sounds like a lot of work, it’s because it is. Developing and validating a business idea is the hardest and most important part of starting a business. This is called identifying product-market fit, and it can be an extensive process.
But here’s the good news. At Wealth Creation Mastermind, we’ve taken care of that work for you. We love affiliate marketing, because it lets you skip the legwork and start selling already-vetted ideas that have a proven audience. You get all the benefits of starting a business (flexible hours, doing something you love, extra income) but you can start 2 steps ahead of everyone else because you don’t have to develop your own product.
What affiliate marketing product should you invest in when you’re thinking about how to start your small business? We’ve carefully vetted dozens of product and business ideas, and have identified two arenas that consistently deliver real results.
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How to Start a Business Step 4: Create a Business Plan
Now that you have a product idea, it’s time to develop a business plan. But you don’t need to create a 20-page research paper that lays out the strengths and weaknesses of all of your competitors, the state of the industry, and sales forecasts for the next 5 years.
Think small and lightweight. If you want investor funding or a commercial loan, then you’ll need an in-depth business plan. But for now, keep your plan tight and flexible. Just jot down answers to the following questions on a piece of paper.
- What expenses do you have?
- What’s your price-point? Based on a), is it enough to turn a profit?
- What’s the Unique Value Proposition of your product? What can you offer customers that they can’t get elsewhere?
- Where would you like your business to be 1 year from now, in terms of revenue?
Why don’t you want to build out a 20-page business plan? Because it’s not the most valuable use of your time, and since you already have a full-time job and want to occasionally sleep, time is of the essence. You need to focus on connecting with your customers and selling, not on creating sales and hiring forecasts for multiple years in a row.
It’s also discouraging to grind away at something that doesn’t affect your bottom line. When you’re planning out how to start a business, you want to focus on small, quick wins. That gives you the enthusiasm to keep going and create bigger wins down the line, instead of getting discouraged and frustrated early on.
How to Start a Business Step 5: Set Realistic Goals
Now’s also a good time to set realistic goals for your business. These should be broken down into daily, weekly, and monthly goals.
Daily goals: What do you want to accomplish today? Email 3 new prospects, find a part-time office space so you’re not meeting clients at your house, ask for reviews from 2 happy customers? Keep your daily goals small and achievable.
Weekly goals: These can be a little bit larger than daily goals. Maybe you want to close at least one deal, or write a couple of pages of content for your website.
Monthly goals: Again, these can be larger than weekly goals—but be realistic, given how much time you have to work on your business.
The key with goals, especially early on, is to focus on quick wins. Underestimate how much you can do in a day (or week, or month). The reason is psychological. If you give yourself a giant goal and don’t complete it, then you’ll feel discouraged and frustrated. That’s bad for your stress levels (and when you’re working full-time and starting a business, stress levels are something you need to focus on so you don’t collapse) and for your motivation.
But when you give yourself a smaller goal, and knock it out of the park, then you’ll feel energized and encouraged to tackle another task. You’ll also feel more confident and less stressed, so you’re less likely to burnout.
How to Start a Business Step 6: Pick One Marketing Channel and Invest In It
A lot of business owners get caught up in what millionaire entrepreneur Ramit Sethi calls “Tactical hell.” You’ve heard you should be on social media, that you need a website, that you need to call leads. You think you need to be doing SEO, and running some paid ads, and building email marketing funnels, and optimizing your copy, and printing fliers, and….
And so that becomes your day. First you send a Tweet, then you post on your Facebook business page, then you tweak 5 meta descriptions, then you do write some copy for fliers, then you write an email. Pretty soon your whole day—or month—is gone, and you have nothing to show for it except a bunch of scattered, half-hearted efforts and a ton of frustration.
A much more efficient way to approach marketing is to do initial research, then pick one marketing channel and invest in that. If you decide to do email marketing, then build your landing page and write your emails, and then focus on getting more subscribers. If you want to focus on SEO, then spend your time writing long, informational blogs that your users will love. If you want to do social media, then do the research on hashtags and follower-building, and then only focus on social media.
That doesn’t mean you need to pick one marketing channel and stick to it like grim death. If email marketing isn’t working for you, try something else. But invest fully in one channel at a time instead of investing 1/6 of your time and effort in 6 different channels.
How to Start a Business Step 7: What Not to Do
Notice what we haven’t talked about. We haven’t discussed getting a logo, building an amazing website, picking the perfect business name, getting professional headshots, hiring an accountant, picking the right software to be more productive, or a lot of other things.
Remember when we said that not validating your product idea was the biggest mistake that new entrepreneurs make?
Here’s the second biggest mistake aspiring entrepreneurs make. They focus on a lot of things that don’t matter.
When you’re thinking about how to start a business, stay focused on what matters:
- Finding the right product
- Selling your product
Those are the two must-dos when running a successful small business. Everything else is secondary.
You need a logo, a business name, and some way to handle your accounting. You might need an office, at least to meet clients; and a website. But in these areas, quick and dirty is fine for now. If you can track your revenue and expenses in Excel, go for it. As you scale, you might need an accountant (or at least some software), but for now focus on what matters: actually getting that revenue in the first place.
When you have 10,000 people looking at your site (or if you’re investing in SEO), then having a sleek and shiny website matters. But right now, you might not even need a website. Or if you do need one, just make sure it looks like it was built this decade.
As a small business owner, revenue is key. Everything else is secondary.
How to Start a Business Step 8: Prioritize Your Time
Starting a small business while working full-time isn’t easy. A lot of entrepreneurs work 80 hours per week, sacrifice their social life and time with their family…and burn out after three months.
But you can avoid that fate. Here’s how:
- Cut out distractions that don’t feed you. Whether it’s rewatching an old sitcom or browsing Facebook when you’re bored, stop doing activities that you don’t love.
- Take leisure time to recharge. This is essential, because after you recharge, you’ll come back refreshed and more productive. You’ll also avoid burnout.
- When you do have leisure time, spend it doing things you love. Plan a wonderful date with your husband. Or relax and read a book that you’re excited about. But do something you love, instead of just channel-surfing for an hour because you’re exhausted from work. When you don’t have much leisure time, you have to make it count.
How to Start a Business Step 9: Look for Mentors
When you’re starting a business, you shouldn’t have to go it alone. Starting a business is hard, and it pays to surround yourself with experienced entrepreneurs who can help you cut the learning curve.
That’s where we come in.
The Wealth Creation Mastermind is a group of successful entrepreneurs who give each other the support and insight needed to help grow an existing business, or start a new one.
Some of us are marketing experts, others have experience with HR, finance and investing and affiliate marketing. All of us study the creative method in order to control our thinking, and follow a specific methodology to take action and achieve success in our lives.
We host a FREE webinar every Monday & Tuesday to study the creative method and develop a wealth creation strategy, including two specific affiliate marketing companies. If that sounds like something you would benefit from, then we highly recommend that you fill out the form below to join.