If owning a business was easy, everyone would do it.
by Kasie Whitener
The first piece of advice you should receive is, “Write a business plan!” Entrepreneurship is fun. Really. But, you need a plan.
So, get yourself a business plan template and get started.
First, identify your business model.
You will have one of three kinds of businesses: Services, Product, or Side Hustle.
You have a services-based business if you have the skills and tools needed to perform a specific service. The challenges with a services business include whether or not you have time to dedicate to performing services. This can be managed by developing a service-delivery method. You will also need to find a way to measure the value of the services you provide and a cost model to ensure you have been profitable.
You have a product-based business if you have the skills and resources you need to create product. With a product-based business, you need funding for prototypes and iterations, the time and capacity to create a product, and a reliable, repeatable process for distributing that product. A product-based business needs an inventory management strategy and a cost model to ensure you will be profitable.
You have a side hustle if you have a “day job” that pays your bills and a hobby you dedicate “free” time to. With a side hustle you can achieve higher levels of mastery in your preferred hobby while still providing for your family with your “real” job. But, a side hustle is not a business. Once you reach a level of competency, you can monetize the hobby, possibly making it into a business. But, you must decide whether or not you want to do that hobby all the time? Do you want to depend on it for your livelihood?
Business plans must include marketing strategies. Often we fill that section with Facebook, Twitter, events, and sponsorships. We think we can speak and spend our way through customer acquisition. Customers will come to us because of what we’re saying and where we’re saying it.
Except they won’t.
All marketing strategies begin with finding customers. So, where are they? Art shows? Craft fairs? Holiday markets? The mall? Technology conferences? It can get expensive to attend all those places. So, don’t go as a vendor. Go as a buyer. Then, you can discover what your customer wants, why, when, and how they want what they want, and if they buy more than once.
Business strategy is a sales strategy.
Your business strategy begins with sales, but “Here’s this thing I made or do. Come buy it,” is not enough. We must go with, “What problem exists and how will I solve it?” Sales must lead to growth. Growth comes from knowing exactly what it takes to deliver the service or product you’re selling. For service-based business, this means you know the time you’ll need, the resources, and what success looks like. For product-based business, you know the materials you’ll need, the time, and what the final product looks like.
Take the leap.
There are dozens of reasons for taking the leap to entrepreneurship. A layoff, unemployment, retirement, or dissatisfaction with your current job can all lead to “the leap.” (If the last reason applies to you, make sure you understand the principle of Minimum Viable Income before you leap. Hustling to ensure you can buy groceries, make a car payment, or keep your mortgage paid creates additional stress that your business start-up probably doesn’t need. That stress may equal your job dissatisfaction, so tread carefully.)
Building six months of savings before you start your business is tried and true advice. Determine what your business would have to earn to support you and then work on it until stays there for a pre-determined period of time. Three to six months of company revenue that could pay you – but doesn’t – will leave both a “savings” in the company to get you through a down quarter, and proof that the income is viable. When you do take the leap, expect your company’s revenue to grow because you are now dedicated to the business. But don’t expect it to triple or quadruple. Business growth is usually a steady process, not a big bang.
Key factors of viability
Entrepreneurship is lonely. Being in business for yourself can mean procrastination and failure, diverting yourself from difficult or unsatisfying tasks, and allowing yourself to make excuses. Entrepreneurship requires a specific set of character traits: Tenacity, adaptability, and resiliency.
Tenacity means you’ll stick with something, persevere, and work until it works. Adaptability means you’ll change as needed to meet the expectations of your customers. Resiliency is your ability to take rejection and failure in stride and persist in your mission.
For your business to be viable, you need a product or service that people want or need to buy. You need to create urgency around that product or service so that your customers are inspired to invest right now. Your delivery process must be reliable, and you must maintain a positive relationship with your customers.
There are concrete needs for viability as well. You need revenue sufficient to pay expenses. You need customers to provide feedback so that you can iterate through growth. You need basic marketing elements like a website so people can look you up, and a brand people recognize and remember. You must have an elevator pitch, a 20-word summary that tells people exactly what you do, who you do it for, and offers a call-to-action for your listener.
Viability is about more than being able to say, “I’m an entrepreneur.” I own running shoes, a subscription to Runner’s World magazine, and a medal display with three half marathon medals. What makes me a runner is that I’m out there putting foot to pavement and racking up miles.
Entrepreneurship is hard, but if owning a business was easy, everyone would do it. But, they don’t.