This answer found in Quora by Oliver Emberton helps to describe what all first time entrepreneurs should know before starting their very first business.
11 years ago I was an impoverished student about to graduate with £14k in debt. I did what any sensible person would do in this situation, and started my own business.
I co-founded with someone who proved to be less than ideal when he punched me in the face during our second board meeting. He owned 49% of my company. Our first annual profit – £200 – was barely enough to buy one iPod touch.
A decade later I’m almost embarrassingly happy and successful, but the road there was long and winding. Here’s some of what I learned:
On you as a founder
- Firstly, do it.
Every single person – from my family to my closest friends – ultimately doubted that this was a good idea. (Many started being supportive, and changed their minds when times got harder). If you feel compelled to do it, don’t let anyone stop you, and don’t expect anyone to support you either.
- Start with total brutal honesty.
I’d say this is Rule #1 in life. Everybody deludes themselves in some way – and in groups it can often be easiest to delude each other. But the more honestly you can see the world, the better your decisions will be. Doubt yourself. Question everything. If someone put a gun to your head, could you tear holes in your ideas? When your plans can withstand that, they’re probably pretty good.
- Practice saying no. A lot.
You will almost certainly want to do a hundred different things. Almost all business founders are like this by nature – they see opportunity everywhere and change the world (I’m certainly no exception). But this is a terrible way to run a business. You need to focus on doing a very small number of things really well, and that means saying no to 1,000 other things. This is harder than you think, and far more powerful than you can imagine.
- Growing past 2-3 people will cripple most founders.
Most small businesses are started by a person who’s good at what their business does: accountants start accountancy companies, bakers start bakeries; I was a geek who – at first – started a web design company. These people will find it extremely hard to grow past 2-3 people; most often they struggle to hire someone ‘as good as themselves’, and end up tired and frustrated trying to do everything. If you only read one business book, get the E-Myth Revisited and learn what to do about it, or at least skim these free notes.
On your business idea
- Don’t be afraid to change tacks.
There is a saying that no business plan survives first contact with the customer. Nintendo started by making playing cards. Facebook was designed for university students. My own company built websites for 10 years before changing to software. Changing direction doesn’t have to make you weak or indecisive – you may have to adjust to find your perfect niche. Just try to do it early and avoid doing it too often.
- Just one. Powerful. Idea.
You can blend complementary ideas (e.g. a restaurant with comedy shows) but not totally disparate ones (a restaurant that sells management consulting services). When you start pick out just a few key features of your idea, and focus on making those amazing. Say no to everything else.
- A successful business is either loved or needed.
It’s exceedingly rare to be both, although as owners we always like to think our companies are loved! (see Rule #1: be honest with yourself). Ensure you’re essential or utterly irresistible. Most often if you sell to businesses you have to be needed – like accountants, lawyers, web designers; if you sell to consumers you need to be loved – like iPhones, movie theatres, cosmetics.
- Imagine being an outside investor.
Pretend to be someone with a lot of self-made money but not much time. Meet yourself right now, and listen to your own explanation of your business. What do you think? Does it sound like a good investment? Once again – be honest. (Sidenote: it’s ok to have a business which isn’t planning to be a big financial success. But very few entrepreneurs believe they’re starting one of those).
- Align with your passions.
True passion is infectious. It will win over doubting prospects. It can make staff loyal to you. Passion will give you boundless energy and keep you going when others would throw in the towel. Ultimately if you build a business around something you’re not passionate about – and I made this mistake – you’ll wake up one day and think “what have I gotten myself into?”
- Marketing isn’t about changing people’s minds.
Your job isn’t to convince people to want what you’re offering. It’s to help your prospects convince themselves that what you’re offering will help them get what they really want.
- A few things not to skimp upon.
Your logo, tagline and website are utterly essential; they’re the first impression you’ll make to most people, and your only message while you’re not there. (If you sell face-to-face to businesses add business cards to that list). If you need professional help, get it. Don’t be tempted to hire your teenage nephew, or do it yourself. This is akin to being your own lawyer, and equally disastrous. You don’t have to pay a fortune – just keep your requirements simple and emphasise quality over quantity. Don’t worry about letterheads or compliment slips or custom email footers or any of that crap until you’re making money.
- Advertising is a tax you pay for being unremarkable.
A good idea is easy to sell; a great one will sell and spread itself. The harder you have to work to explain and sell what you do, the more your idea needs work. There are two solutions: simplify what you do, or change tacks entirely. You won’t sell more of a bad idea by making it more complicated.
Everyone has to find their own path, but you can save yourself a lot of time and stress by learning from the best and brightest who have come before you. I highly recommend reading just three brilliant books: The E-Myth Revisited, 7 Habits of Highly Effective People and the Personal MBA; they’re worth at least a year’s head start by themselves.
Everyone I know who has ever tried had a single common refrain: they wish they did it sooner. If you think it’s your calling, what’s your excuse?
Everyone has excuses–conscious or otherwise–about why they can’t (actually won’t) earn more money. A common excuse is, “I need money to make money”.: How to Really Start a Business (or Why You Don’t Need Money to Make Money)Featured photo credit: man at the water via Shutterstock