don't start a small business until you do these 5 things
Here we are. Poised on the edge of starting a brand new year. An opportunity to start that new business or side-hustle you've been fantasizing about for months or even years! You're excited (and a little scared) but ready to sprint into action on January 1, 2020. The second that ball drops... you'll spring into action. I love your drive and enthusiasm... but STOP! There's some things we need to discuss first.
I’ve personally started several small businesses over the years and had the privilege to help many other people start their own small businesses. In that time, I’ve learned some important things. Here’s why I'm asking you to put the brakes on, take a deep breath and take a sobering shot of single malt whiskey before you move too far forward.
1. do your research!
Whether you’re starting a fashion brand or a brew-pub, if your research consists of sitting behind a computer typing keywords into Google, you're not doing enough. Get out into the big bad world, tablet/laptop/pen and paper in hand and immerse yourself in the environments, products and services of similar businesses to your concept.
Just like the military, nothing can replace boots on the ground! Visit your competitors (physical or web-based destination) with eyes wide open. Take notes on what IS and IS NOT working within their businesses. Sample food. Make purchases to observe customer flow, before, during and after the sales cycle. Ask questions. Take pictures. Learn.
Sure, you might get some weird looks and hell, you might even get kicked out of some places. So what! Move on to the next destination and do it again.
When you’re done, you should have some pretty significant notes that you can then refine into a tight, cohesive document. From there, keep those ideas that might work for you and drop those that won't. It’s at this stage you can define your USPs (Unique Selling Propositions). Those are the things that set you apart from your competition. Imagine there are three brew-pubs sitting side-by-side in front of you. USPs are what compel you to choose one versus the other. They all serve beer, brewed on-site. They're all family owned. But brew-pub C offers board gaming every week night… and your competition doesn’t. BAM! There’s one USP. I cannot stress how important these are to the success of your concept.
2. plan & Budget
I’m talking about real stuff that you’ll need to address NOW before you go too far down the rabbit hole. We don't care at this point about your logo, or the back story about your business. We're just worried about the important stuff, like defining any and all revenue streams and their projections, defining expenses and their projections, defining your USPs, outline your marketing plan, systems and policies… you get the idea. You have to address the elephant in the room early, it may just save you from making a bad decision or worse! I’ve stopped myself several times at the planning stage because I was able to determine if my idea truly had a chance or I was just living in a fantasy world. When it comes to your budget, unless your last name is Gates or Trump, you won't have enough of the stuff, so make sure your budget is double what you think you'll need. More importantly, make sure you leave enough in your personal account to live on for a while!
Oh yeah, one more thing. Know that your "plan" is a living document. It will evolve over time as you solve unforeseen problems and reveal new ideas.
3. don't register any internet stuff. yet.
If you know what you're doing when it comes to this stuff, skip this section.
However, most people don't! Many of my clients get excited and start securing domain names, emails and website hosting without knowing what they are really doing (and let's not even talk about all that wasted time and money!). There’s definitely a right way and a wrong way to do this. Over the years, I’ve used a plethora of solutions for just about everything internet related. What I learned was, the right solution will stare you in the face if you do your planning (see above!)
For example, if you did your planning, you will know you plan on opening an online store. Your plan also told you that social media is going to play a huge role in your businesses marketing strategy. You also have determined that you don’t expect to have much of a budget for a web designer, so you plan on doing that stuff yourself.
These types of insights will help you (or the person you hire) to choose the right "tech stack" for your business. Without those insights provided by a plan, you could make some costly mistakes!
Side note: When you finally do register everything... WRITE IT ALL DOWN and store it somewhere safe!
4. discuss with your partner
I've literally been there.
Way back, around 2002, I had the idea to open the "Citrus Store". A street level extension of our business allowing customers to choose from hundreds of designs for brochures, catalogues, websites (literally right off the wall) and sit with a designer in our studio while the designer tweaked the idea right in front of the customer. It was meant to be a quicker way to go from point A to Point B with your small business marketing.
Since the decision to activate this concept was somewhat unilateral, when it didn't generate revenue quickly enough, I started to get some mild push-back from my wife, Danielle. To make a long story short, because I wasn't grounded in reality in regards to my revenue projections and over-estimated the interest we'd get from the business community the concept began to fall apart from a marital perspective and I made the decision to dismantle the idea after only about one year.
This type of thing happens way more than you'd think. Partner A says they want to try to start a business or side-hustle and underscores the success (will make lots of money, will not consume much of my time, won't add stress...) and downplays the reality (late nights, no weekends, no vacation time, financial, emotional and physical stress...). Partner B agrees and off you go to start your business. At which time, you both quickly realize that the reality side of the equation is quite REAL... even more real than you imagined.
There are few things more de-stabilizing than your partner pointing their finger at you if things aren’t going well. Running your own full-time small business is tough. REALLY tough and you are going to need your partners support in good times and more importantly, the bad times! So be honest about what you are trying to do. If you haven't run your own business before... just double all the REALITY side of the equation.
5. have fun
OK, I don't want to scare you too much! Despite all the insanity of running your own business/side-hustle, I personally feel it is one of the most exhilarating and rewarding times of your life.
So many of my clients and friends get so wrapped up in the marathon to get their business open and running that they lose sight of the romanticism of it all. Yup… you’ll be spending 18 hour days burning through to-do lists, coffee and pizza in order to get open, but you’ll also look back on those very same days with fondness as you marvel at all the work you did to get where you are today.
When you're toiling away at the day-to-day operation of your successful small business and your friend drops in and inevitably says “you’re so lucky…” you can look them squarely in the eye and say “Luck? No no my friend. Luck had nothing to do with it! It was all hard fucking work... now buy something!”
If you'd like to discuss your business start-up, you can reach me at firstname.lastname@example.org. If you'd like to see us in action, helping other small businesses do amazing things, check out our Possessed To Create videos. You can also reach me directly at (905) 442-3323, and ask for Chris.