9 Things You Need to Know About Starting a Business

A lot of people dream of having their own businesses, and with good reason.  Having your own business can be very rewarding.  However, along with the rewards come responsibilities associated with it.   It’s not all glamor, excitement and counting gold nuggets.   I’ve had my own ups and downs with all the businesses I’ve been involved in and have learned a great deal from them.   And because most of our friends are business owners as well, we get to learn from their experiences.  If you’re dead set on starting your own business…and I mean a REAL business–not some wishy-washy idea that comes & goes, here’s a few things you need to know:

1. Don’t start too small. A lot of people start businesses thinking they’ll only spend so much, and if things go well, they’ll reinvest the money to grow the business.  But if things don’t do too well, at least they’re not out too much money.  This tactic may have worked a few decades ago when there wasn’t much competition anywhere, but if you’re going to build a business to compete in today’s marketplace that’s bombarding the average consumer with tens of thousands of ads at a time, you need to stand out from the rest.  Where do you want your business to ultimately be?  Do you want a $10 million/yr business or a $500/yr business?  Your image has to reflect that.  Invest in a good storefront, real estate, professional logos & websites.  Invest wisely in the things that will create the best first impression to your customer, because you never get a second chance to create a first impression.  When your website, storefront, or even your business card looks un-professionally made, it gives customers the impression that you do not have enough confidence in the ability of your business to make money that you’re already skimping on some of the necessities.

Think of it this way, do you ever go on a date looking like you just got out of bed thinking if it doesn’t work out, then at least you didn’t waste too much time trying to look good and buying nice outfits?  Even if you’ve got the most amazing personality, your date will most likely not be too happy to see you (or smell you) and might spend the entire time looking at other people. If you’re starting a business with the mentality of holding back for fear that it MIGHT not work, you’re already setting yourself up for failure.  You will have better chances of success with a mindset that has no other choice than to make it work like your life depended on it.

2. Know who your customers are. This is something you really need to spend some time on and what most people ignore.  You really need to know who you will want to cater to, because this will determine the type of marketing/advertising campaigns you will want to implement.   Don’t make the mistake of trying to make any living human being your customer.   If you have a restaurant, you don’t just target anyone that eats.   If you sell baseball caps, you can’t just market to anyone with a head.   Wal-Mart sells jeans for $15, and 7 for all Mankind sells $150 jeans.   That alone tells you what type of customers each brand is targeting.   If you make organic bird food for parakeets, your target market is not anyone that has a pet bird.   I don’t think a 5 yr old could care less if the bird food he has is organic or not…much less if it’s for the right bird.   You need to pick what type of customers you will want to deal with.    What traits do they have?   Where do they hang out?   What will motivate them to buy your product?   What are their buying habits?   These will help you know how to ultimately reach your ideal customer.  Trust me, you do not want to have just any type of customer.

3.  Narrow down exactly what you’re bringing to the table. Figure out what unique value you can offer to your customers that will differentiate you from everybody else in the same field.   What do you stand for?   What will your company stand for?   You can either position yourself as the cheapest place to buy widgets, the one with the most widget variety, or the one with the most expensive widgets that gets delivered to your door and professionally installed.  Just decide whatever will work for you.   If you think you want to be known for having the cheapest widget in the market, there’s nothing wrong with that as long as you can sustain the business this way.  Just don’t try to be everything to everybody because you end up being a nobody.

4.  Be always prepared for chaos. I don’t care if you have an MBA from the most expensive school and have a 400-page detailed business plan.  Things won’t always turn out as planned and having a business is not always a bed of roses.   But it’s usually during the most challenging times when you learn the most.  Until you really figure out what you’re doing, start up businesses can feel like 24 hr/day jobs.  Even the best laid out business plans don’t always work.  And your ability to weather through the chaos will determine how far you’ll go.

5.  Whatever you think your start up costs will be, add at least 50% more on top of that. There are a lot of expenses that get overlooked when launching a business.  And however long you think something will take, double the estimated time frame.  If your suppliers are quoting you 2 weeks, prepare for 4 weeks instead.

6.  You need to know how to interact with people. Many entrepreneurs are introverts.  A lot of them think they can just hide behind their products and count their beans while they wait for customers to hopefully buy their products/services.  Unfortunately it doesn’t work that way.  Even if you have a web-based business, you still have to interact with live humans.  You still have to market yourself.  Most successful businesses are built on relationships.  Because almost all businesses, no matter what field it’s in, really boils down to it being a people business.  If you’re in real estate, you’re in the people business selling homes or investments.  If you’re a pharmaceutical sales rep, you’re in the people business selling drugs (legal ones, hopefully).  If you’re an artist, you’re in the people business selling art.  Any type of business will revolve around people and their wants and needs, and you have to know what makes your customers tick.  Because I do know for a fact that if you’re selling dog biscuits, your customer’s dog isn’t the one who will whip out the credit card.

7.  You will need to develop a thick skin….a really thick skin.  When you deal with the public, you open yourself up for a lot of scrutiny and criticism.  The bigger the business you want to build, the more customers you will have to deal with.  There are all sorts of people out there, and they have their own opinions on what they’re entitled to.   If you target your customers properly, you shouldn’t have too many of the “challenging” customers.  One bad customer can sometimes put a damper on a really good day.  Be prepared to be able to handle comments like: “$@#$%^&****#&;$!!!!  #$%^*#@#@/>!!!!!!!!!!!!”  You need to be able to let these things roll off your back because at the end of the day, it’s all just business.  Nothing personal.

8. Have a clear vision of what you really want or a clear goal of what you want to accomplish. You can forget the first 7 things I just mentioned, but you need to remember this one. Many entrepreneurs start out not really knowing what they want.  They say they want to have their own business selling this or that and hopefully end up being rich from doing so or at least making ends meet.  That’s not a good enough goal unless you just want to be mediocre at best.  You need to have a goal that’s bigger than what you can comfortably accomplish.  Set higher standards for yourself.  Set it high enough to scare you, but not too high that it paralyzes you.  It is very important to know what you want and why you want it. The most successful people are those who started with a clear vision of what they wanted to accomplish and persisted long enough to carry it through. Don’t worry about how you’re going to accomplish that goal…just have a goal and a strong enough reason for wanting to achieve it.  If your WHY is big enough, the HOW will take care of itself.  As long as your motivation is big enough, the solutions will present itself to get you through the tough times.

9.  You need to have fun. You need to pick your business based on what you like to do.  Because if you approach your business like you’re smelling armpits for a living, your customers will know that and won’t hang around too long, if at all.

So you see, there’s a lot of thought that needs to be put in starting a business.  It’s not just a matter of buying and selling stuff.  Lots of money can be lost by not really having the right focus.   Starting a business, sustaining it and growing it is really simple…but it’s not easy.