One of the most asked questions I have from business startups is, “What should I concentrate on first?” My answer is usually is drawn from one of these 10 things. The list is in no particular order. Choose which one you want to start with, but make sure you at least think about all ten.
Make sure your business is about something you love.
Being in your own business is hard work. If you don’t love what you do, there’s a good chance you’ll give up when the going gets hard. The going always gets hard. Sometimes it takes a day and sometimes it takes several months. If you don’t love what you do when the test starts you might decide to throw in the towel.
Figure out where your sales are going to come from.
The hardest thing in a brand new business is creating sales. It helps if you know where your business is going to come from. Unless you hang a sign on main street and hope people walk in the door (not a good strategy) there is no chance anyone will find you. For me, when I started my business my strategy was to walk in off the street and ask potential customers for their business. What will yours be?
Make sure you have positive cash flow.
It’s a rare business that has positive cash flow from day one. It’s also a rare business that can afford to run with negative cash flow for a long period of time. You’re probably going to have a small window where you can afford to lose money. For some this window is zero. If that’s you, then you’re better off starting your business as a part time activity. If you have a little start up capital you might be able to go full time from day one.
Figure out how much money you need to live on.
You’re going to need to find a way to live while you’re getting your business off the ground. Doing a plan for what you need will help you figure out how much business your business has to create for you to keep going. Knowing how much money you need to live can also help you work backwards in setting prices for what you need to charge in your new business.
Figure out how much money your business is going to need.
Your business is going to have costs of operation. Putting together a simple budget is something that will help you know how to set prices. When you plan for your new business take your personal expenses and business expenses and add them together. This will tell you the total amount of profit your business most produce for you to live. If you run out of money before you get your business off the ground, your business is going to fail.
Make sure there is a market for your product.
When you’re setting prices for your new product find ways of testing to make sure people will pay you what you need. It really doesn’t matter whether you think your business is a great idea. It only matters whether those who could be customers do so and spend their money with you. In my view the way potential customers vote about your business is whether the spend money or not.
Make sure you develop a niche.
Too often I see new businesses taking anyone who will do business with them as customers. I believe this is a huge mistake. If you develop and stay in a niche it’ll be easier for you to get new customers and prove to potential customers that you can add value. It’s much harder making that argument when you try to be all things to all people.
Make sure you reserve 20% of your time for marketing and sales.
If you’re fortunate and your business takes off you’re going to have a tendency to take all of the work that you can get. This is a mistake. If you don’t reserve time to sell and market your business you’ll run out of new customers. The goal with a business, even a new one, is to get rid of lumpy sales. Setting time aside for sales is a good way to prevent this problem.
Learn how to say no.
If you say yes to everyone, you’ll quickly run out of capacity. Learning to say no allows you to reserve time and energy for projects and customers you should be saying yes to. If you still run out of capacity the universe is giving you a message: raise your prices. No is a key to success in any business owner. Learn how to say it early in your career.
Fail Fast/Fail Cheap
Never, never, never, never bet the store. When you try new things out, make those new things are small experiments. Find out if they work. If they do, integrate your experiment into your business. If they don’t, drop them quickly and try something new. Don’t fall in love with new ideas. Let the market help you decide what works and what doesn’t. Make sure you pay attention to what the market is saying.
These are my ten. What would you like to add to the list?
We have a special report call four tiered budgeting. This is a simplified method of putting together a budget and help you understand what resources you need to run your business. To get this special report, click on the button below.