Think you can cut it on your own? Here are nine things to consider before you take that leap of faith and start your own business.
1. Begin with revenue.
It’s nice that you have a dream, but the reality is that you will need to make money. Whether you are planning on pitching to investors or building a customer-funded business, you will need cash flow. Cash flow is the heartbeat of your business. Author and entrepreneur Seth Godin writes, “It pays to have big dreams but low overhead.” Overhead are things such as rent, payroll and other monthly expenses. Make a plan and write specific goals for how you are going to make money.
2. Protect your IP.
IP stands for Intellectual Property. Trademark your work and spend time on your privacy policies from the beginning. Talk to a trademark lawyer and make sure you are covering all your bases in the legal sense. Have a designated spot for organizing all paperwork, legal documents, and trademarks. Trust me, you will get a lot of paperwork mailed to you and you want to make sure you don’t throw away something important because you thought it was spam.
3. Market yourself.
Free marketing on social media is the key to growing your start-up with low overhead. Research social media marketing ideas, and do your homework. Study businesses that are doing what you do. Know your target audience and study CRM (customer relationship management) within your company. Where is your ideal customer currently spending their money if not on you? Connect with like-minded small business owners, and learn from each other. I am currently in a mastermind group with seven female, small business leaders in Nashville. We get together every other week to discuss various aspects of running a small business. Be proactive and curious. Ask questions.
4. Know your “why.”
If cash flow is the heartbeat of your business, the why is the actual heart. If you can’t write down the internal, external or philosophical problem your company is working to solve, your business won’t have a backbone.
“He who has a why can endure any how.” – Frederick Nietzsche
5. Understand yourself so that you can make great hires.
“Organizations are never limited by their opportunity. They are limited by their leader.” – Dave Ramsey
You are the leader. You need passion, integrity, humility, courage and self-discipline. Know your strengths, weaknesses and leadership capabilities so that when the time comes to make a hire or seek support, you know where you are lacking. Become self-aware and discern in what areas you need to improve. Start by taking personality tests that give you insight into your tendencies. My go-to test for myself and my team members is the DISC profile. Every interviewee that we are seriously considering hiring takes this test before we offer a position. Your interview process should be EXTENSIVE. Turnover can kill a start-up.
6. You are NOT the boss.
Your customers are the boss. Your customers are the hero. It’s ALL about your customers. The story about how and why you started your company isn’t as important as how and why your customers need your product. Learn how to serve your customers, but know that once in a while your customer might be wrong. This article taught me about the freedom to occasionally “fire” a customer. Embrace the concept that your product is not for everyone.
7. Build structure and find balance.
Professionals show up and do the work when they don’t feel like it. Become obsessed with time-management or you will begin drowning in chaos. Build structure for your business so that you can find healthy work-life balance. Read time management books and find a routine.
8. Build a tax savings account and an emergency fund savings.
Finances and managing cash flow are two of the biggest distractions for any business. If you don’t have a CFO from the start, hire an accountant and/or bookkeeper, and build your savings. An emergency fund for your business can be anywhere from three months to a year of overhead expenses you have saved in the case of sudden disaster. Move money into your tax savings account every month and don’t touch it. Every quarter, while millions of business owners are scrambling to move around money for taxes, you’ll be able to stay hyper-focused on developing your business.
9. Embrace change and challenges.
“Entrepreneurs are simply those who understand that there is little difference between the obstacle and opportunity and are able to turn both into their advantage.” – Seth Godin
You will face many obstacles, ups and downs. I could spend all day telling you about all of the bumps I’ve experienced in the last three years, but then I would be talking the problem — not the solution. Seth Godin says, “You’re going to do your best work, and it’s not going to work. Taking it personally will cripple you.” It’s ok to be unprepared when you start. There are many variables you cannot control no matter how organized you feel. You will be much more stress-free if you learn to embrace change and don’t grip your business by the throat.