or, “Fast” and “Easy” Startup Planning To Keep Your Business From Failing
Why is it that with all the information available today on how to be successful in small business, so few people really are?
If it were so simple, we’d all do it.
Let’s distill it as if it could be simple. We could call today’s post “How To Create a Business That Makes Money.” As always, I hope you’ll do just that with these steps. But instead, let’s call it The Money-Making Business Manifesto.
Like all good manifestos, this one gives only the top-level view. (Take a tour through MCE’s archives for in-depth articles on many of the points in this manifesto.)
Warning: Like in all good manifestos, the steps below are just as simple as they look—and just as difficult, too.
Find something that is being done, and is being paid for* by a large enough market to sustain your business (break even/ make a small profit) if you can capture 5% of it.
Never start a business that nobody wants or uses even in some peripheral way (peripheral? Henry Ford made cars when most folks still had horses, but there was a large and verifiable, paying market, for reliable transportation).
Never start a business on the assumption that you can capture a majority of it (new businesses work their butts off to grab 5%… established businesses aim for 20-25%… more than that can happen, but if you want to stay in business you can’t aim at the miracle-success-story, you have to aim with realism).
Never start a business where the market seems huge (no one wants anything that’s aimed at everyone).
If the idea is too small, expand the definition/ realign/ change.
If it’s too big, pinpoint-focus.
This market must be full of early adopters (low resistance to change) with their ears to the ground (on the lookout for change) who have spare $$—and who are also talkative sharers. Can’t create traction if you have to spend all your energy convincing your customer. Can’t get word-of-mouth going if your Ideal Customer is a hermit, a social nincompoop, or too busy/ too fancy-pants to share.
Do it better than it is being done by anyone else (“better” meaning “far more valuable”), either through novelty/disruption or vast improvements (not vast in your mind, vast in the consumer’s mind—unmistakable and worthwhile).
Talk it up anywhere you can, from the minute you get the idea to the day you open your doors. Create buzz. Listen. Refine.
Never be afraid someone’s going to steal your idea, it’s not that unique. You are the secret sauce that will make it unique, and they can’t steal you.
Run it past real potential buyers when you know the date you will officially be able to deliver (your product or service).
Get commitments to buy from at least 5% of the people you run it past (if you can’t get this now, what makes you think you can after you’ve poured tons of good money and sweat into it?).
Bonus: Get real advance money put down.
Do not skimp on planning. Cheaping out now will doom your company—and you’re reading this because you want to succeed, right?
Seek outside help at the planning stage. Why? Because you WILL delude yourself on at least one of these points, if not many.
Look at it this way: you’ll put thousands of hours, tens of thousands of dollars of your savings, and your family’s and friends’ goodwill on the line to make this happen. You’ll spend 1-3 years making it a success or you’ll spend 1-3 years struggling while it dies. Which would you and your support network prefer? It’s worth paying a professional to poke holes in your plan (and to advise you on ways to fix the holes) at the outset.
If it were so simple, we’d all be Bill Gates or Sam Walton.
But if you’ve got the entrepreneurial spark and you’re willing to examine your plan as critically as an investor or a bank would (both of which have no interest in 99.9% of new/small businesses, sorry), you can plan to be one of the ones in the “Success” column, with a sustainable business that makes money.
Now all you’ve got to do is check your course frequently, realign/ revisit these steps right away when you sense turbulence, and work your plan like hell.
Grow and be well,
*Silicon Valley seems to be of the opinion that vast adoption rates with no revenue in sight is okay. Maybe in the Valley. Maybe, for a hobby. In the ROW (Rest of the World), we gotta eat. Make sure there is money exchanging hands in your desired niche if you hope to call it a business.
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