I think I’ll start a business

I think I'll start a businessA lot of people have a dream of starting their own business. They may be bored with their job, feel under-appreciated or just have a desire to be their own boss. They may even see it as the path to riches. Whatever the motivation, a lot of people want to go into business for themselves. It’s even reported that Karl Marx, the father of Communism, wanted to start a buiness when he was living in London (but I can’t find the quotation at the moment).

A lot has been written on the subject of starting a business and there is plenty of information available for those of us looking to take the plunge. Here are some ideas adapted from various sources that we think are helpful and, in some cases, wish we had paid more attention to in the past.

Don’t give up the day job

When we are keen to get going with our new business we can be tempted to leave our current job to focus on it 100%. If our new business is well financed and a clear plan is in place this may be an option. However, in most cases we will be investing “sweat equity” and it is probably more important to have a steady income to support us in the early days. We can always make more time (we won’t find more time, we do have to make it) by not wasting it watching television, for example.

Have a business plan

It’s important to plan our new business. Often, we start businesses based on a vague idea that we can’t explain easily and we can get quite annoyed if others ask us inconvenient questions. Be able to explain the business simply; for example, what are you selling, who are your customers and what’s in it for them, how much do you charge, how much will you sell and how much profit will you make?  Watch successful business people on television (Hey, I thought we weren’t watching it any more?) and you will see that their ability to make money is based on these types of question, rather than any technical skill they might possess.

Start a business, not a job

There’s an excellent book by Michael E. Gerber called The E-Myth. The “E” in the title stands for entrepreneurial, and in it the author talks about how people with a technical skill start a business with that skill and the result is misery. The problems stem from the entrepreneur having a job on a self-employed basis that leads to them being more trapped than they were working for someone else. A proper business plan helps to avoid this trap. Set the business out in the plan with a proper structure so that all the job functions are clear, and you avoid doing everything yourself. This also helps you to see how the business will scale as it grows so that you are managing a business and not a job. Remember, someone may want to buy a business but they won’t want to buy a job.

Who are you selling, rather than what

When planning your business, start with who your customers are and what problem you will solve for them. When you know there are enough people with a problem you can solve, think about why they would want you to solve it for them rather than letting someone else do it. Don’t start with something you can do because no matter how great you are at it, if no-one wants it you won’t be in business very long.

Stick to what you know

Focus on starting a business based on what you know rather than something you know little about. People often start businesses that are completely new to them and this can make success less likely. Reasons for choosing to move into another area of business could be the desire for a complete change from what they have been doing or hearing that the new area is lucrative. Starting in a familiar business makes it easier for us to plan, we are more comfortable talking about it and we have more credibility with people who know what business we were in before.

It’s who you know (and who knows you)

People buy from people. We can go further; people buy from people they know, like and trust. Whether you are selling your product or service (and you will need to sell it) face to face, online, by mail order or whatever, your customers need to know something about you and that they can trust you. On top of this, even if they know and trust you, if they don’t like you they probably won’t buy.

Tell everyone

Remember the importance of your customers knowing, liking and trusting you? Tell everyone who will listen what you do, how you do it and why you are the best in your business to choose. Don’t be shy.

Adapt and don’t give up

As things develop be prepared to adapt to circumstances and keep going. We need a bit of luck if we are going to succeed in business and in some cases we need to keep going until luck comes our way. Giving up or changing to something completely different as soon as the going gets tough means that we don’t give ourselves a proper chance of success. This is why we need to hold on to that day job for as long as possible to give us the financial backing to see us through the tough times.

Start today

Well, what are you waiting for?

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