How to start a small business?
For most of us, it starts with an idea.
The idea can either be to break free from the corporate world. Be our own boss. Stop feeling like a cog in a machine and actually make a difference.
Or it can be more specific. Build the first or the best widget in the world. Because I’ve used every other widget out there and they are all lacking in a specific way.
The idea is to start a small business. To build something brand new. Brick by brick.
I have worked with dozens and dozens of small businesses and startups over the years. I’ve seen the good, the bad, and the ugly. I’ve seen companies go public at valuations of more than $200M, and others crumble under the weight of their own mistakes.
So if you have an idea, the spark is there but then your heart skips a beat, and you think to yourself: How exactly do I start?
To avoid some of the missteps that others have made, to build a business that thrives; here’s how to start a small business that thrives from the ground up:
1. Know Your Why
Simon Sinek has one of the most popular Ted Talks of all time, and a best selling book as well, called Start With Why. In it, he talks about how important it is to know why you are motivated to do what you do; and that why shouldn’t include “to make a million dollars” or “make my mother proud.”
It is about understanding the way you want to make an impact on the world. And it’s different, and personal, to each person.
I have found that having a solid foundation on why you want to start a small business makes all the difference. When things get rough (and they will get rough), you can return to this fundamental understanding and as a reminder of why you want to keep moving forward. As Sinek says:
Working hard for something we don’t care about is called stress; working hard for something we love is called passion.
So ask yourself, how do I start a small business that aligns with my Why?
2. Be a Consumate Learner
The most successful Founders and CEO that I’ve met are constantly asking questions. They are confident in what they know but are aware that they can always learn more. This can come up in a few key ways:
Before you even start your business, research your market.
Then research some more. Never think that you already know everything about people who buy widgets or all the other widgets on the market.
Ask questions. Then ask some more. Find people smarter than you or have way more experience, and listen to what they tell you.
Acknowledge that you don’t know everything. This is another critical piece to running a successful business.
I have seen it so many times. A Founder asks to “pick the brain” of someone else who has gone before. They hire a brilliant person to be part of the team — an expert in marketing or finance, and then disregard what they say or tell them what to do instead of asking them the best way to do it.
The CEO is missing a critical opportunity by not leveraging the team members/ expertise and not acknowledging that this team member has a lot to teach the CEO. It’s disempowering to the team member too.
3. Roll up Your Sleeves
You might have the fancy title – CEO, Founder or Head Honcho, but when you start a small business, you are also the receptionist and in charge of data entry.
At the beginning, you need to be willing to do all the nitty gritty work that goes into your business. You can’t be too good to do anything. The tasks might not be in your zone of genius. And sooner or later, you will be able to hire and/or delegate a lot of the smaller stuff.
But if you don’t understand all the little pieces that go into making your business great, you won’t understand how to scale your business and grow when the time is right.
4. Get in the Weeds
I have worked with many, many CEO’s, Founders, and Entrepreneurs, and most of them have one thing in common:
They are Big Picture Thinkers.
They are the ones with the dreams and the big ideas. Execution? Not so much.
So, if you are going to start a small business that thrives, you need to get in the weeds. Take a look at the details:
Why would blue be the best color for your widget? Who will take the orders that come in from outside the US? How, exactly, will you ship your products to the people that buy them?
Don’t avoid the details of your business because the big picture ideas are more fun.
Dreams and big ideas are critical when you start a business. But if you don’t have a handle on any of the details, you won’t be able to make those dreams a reality. And eventually, your business will crumble like a house of cards.
5. Build a Plan That Includes Budget, Expenses, and Profit
When you’re in those weeds, you must put together some numbers — real, researched, well-informed numbers.
Don’t assume you’ll take 50% of the current market because your idea is great. You need to create a plan that outlines every single expense that you’ll expect in the next 6 months to a year. You need to create a realistic timeline to product launch and create estimates for how much revenue you will get from your product, and when.
Without a plan that includes numbers, you will spend most of your time reacting to what happens around you instead of moving forward with intention.
Dave Ramsey is one of the big gurus of small business and personal finance. In his best selling book, EntreLeaders, he keeps it simple. He says:
Business is not really that hard. You are, however, required to do the basics or you will not win. Budget and do the accounting, stay out of debt, don’t buy what is not needed what is not needed to make a profit, save cash, and always be generous.
And you need to have a good answer to the most important question of all – when will you make a profit?
6. Avoid Shiny Object Syndrome
You’ve put your plan together. You’ve researched your market. You know that you want to create 2 inch widgets in a gorgeous shade of blue. You will sell them for $1/widget. Bob the designer is signed up to build them. You’ll launch in June!
My neighbor Betsy told me she’d love a widget in green. Should we change the color to green? And Johnny’s teacher mentioned that she could use a widget that is 3 inches. Let’s change the size of the widget!
It’s so common. We have an idea but what if there is a better idea?
Do your research. Make informed decisions. And then stay the course. You can always pivot later.
But if you keep turning your head toward every shiny object, you won’t reach the goal right in front of you. You’ll never launch that product by June.
7. Trust Your Team
A small business might have one founder, but people rarely start a small business all alone. There is often a consultant, a partner, a sounding board. And then, consultants, accountants, and marketing experts.
No one’s “zone of genius” covers every area. So one of the best ideas on how to start a small business is to find a great team to help get your idea off the ground. Spend critical time on the front end vetting and hiring great people. And then let them do their job.
In my years on Wall Street, I saw first-hand the impact on a business when the Founder didn’t trust their team. I had hundreds of small private companies pitch their businesses to me, with the hope that my investment bank would take their company public.
The companies that gave me the most pause, the ones that rarely succeeded were the ones where the CEO did all the talking, or when he or she cut off his team members when they tried to answer questions.
Because in my mind, if that happened, it meant one of these two things: 1) the CEO is not listening to all the other smart people in the room; or 2) the CEO does not trust his team.
Both options were a recipe for failure.
Believe In Yourself!
Trying to start a small business can be incredibly difficult. We dream of the possibilities but get overwhelmed by the realities.
Know your why and believe in your abilities. Don’t try to be the best in the world or execute flawlessly. Learn and grow and keep trying.
If you do all the above things, you will be a success in whatever way you choose to define that word.
More Tips for Aspiring Entrepreneurs
- How to Start a Successful Business and Increase Your Profits
- 12 Foolproof Tips for Entrepreneurs to Be Successful in a New Venture
- How to Start an Online Business That Will Grow and Succeed
- 15 Best Books for Entrepreneurs to Start Reading Right Now
Featured photo credit: Vitaly Nikolenko via unsplash.com