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Published on December 17, 2018

How to Start a Small Business That Thrives (From the Ground Up)

How to Start a Small Business That Thrives (From the Ground Up)

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:

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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.

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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.

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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!

And then…

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.

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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.

Resources About Entrepreneurship

Featured photo credit: Vitaly Nikolenko via unsplash.com

More by this author

Deb Knobelman, PhD

Neuroscientist and C-Suite business executive who writes about the intersection of mindset, productivity, entrepreneurship and how to reach goals.

How to Measure Your Team’s Productivity Effectively How to Set Goals and Achieve Them Successfully How to Start a Small Business That Thrives (From the Ground Up) 10 Steps for How to Change Habits When You Feel Stuck in a Rut

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Last Updated on November 19, 2019

What Is the 80 20 Rule (And How to Use It to Boost Productivity)

What Is the 80 20 Rule (And How to Use It to Boost Productivity)

The 80 20 Rule or Pareto Principle, named after the nineteenth-century Italian economist, Vilfredo Pareto, who discovered that approximately 80% of Italian land in 1896 was owned by 20% of the population, has become a common axiom in business and life.

The principle was highlighted in 1992 by a United Nations Development Program report that showed that roughly 80% of the world’s wealth was in the hands of 20% of the population.[1] Businesses have reported that 80% of their sales come from 20% of their customers and, Microsoft discovered that if they fix the top 20%, most reported bugs they eliminate 80% of the problems in their software.

It seems the Pareto Principle is all around us.

When it comes to our own productivity, the principle can be applied in that 80% of our results come from 20% of our efforts. The trick is to discover what that 20% is so we can apply our most effort to that 20% and eliminate as much of the 80% that does not produce the results we want.

So how do we do that?

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Be Absolutely Clear on What It Is You Want to Achieve

The easiest and most effective way to do this is to be absolutely clear about what it is you are trying to achieve.

What is the outcome you want to achieve? Most people do not get clarity on what it is they want to achieve, and so get sucked into working on things that will not deliver a big contribution to the overall objective.

For example, if you have a project to move house, spending an inordinate amount of time discussing the colour you want to have the walls, what furniture you would like and what plants you will have in the garden will not move you very far towards moving house.

Instead, deciding how many rooms and in what location you would like the house would give you far more important data on which to be able to go to a real estate agent. You are going to find the right house much more quickly than by discussing colours, furniture and items in your garden.

Before you begin any project, make a list of all the tasks involved to take the project to completion and then flag or highlight the tasks that will give you the biggest contribution towards the completion of the project. Those tasks will be the 20% of tasks that will take you 80% of the way towards completing the project. Focus on those.

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What Are Your Majors and Minors?

Jim Rohn coined this question and it essentially means there are parts of the work you do each day that have a direct contribution to the overall objective you are trying to achieve.[2] Other parts of your work do not have a direct contribution to that objective but could be described as housekeeping tasks. The trick is to know what they are.

Brian Tracy often talks about this with the sales process.[3] Major time is when you are in front of the customer talking with them. Minor time is traveling to the customer or being in meetings with your sales manager in the office. Of course, traveling to see your customer or meeting with your sales manager is important, but they do not contribute directly to your sales performance so that would be classed as minor time.

When I was in sales many years ago, I learned that while you might be popular with your sales admin team, if you meticulously write out your sales reports every day, doing so did not improve sales performance. I observed that the best salespeople in our company were the ones who had terrible admin reputations and were not the more popular people in the office. The thing is, they were the best salespeople because they understood that being in front of the customer led to higher sales which ultimately led to higher salaries.

Take a look at your calendar for last week and identify what tasks you did that had the biggest positive impact on your objectives. Then, plan to do more of those next week so you are working on the 20% of tasks you know will take towards achieving 80% of the results you desire.

Stop Thinking, Start Doing

I come across this with a lot of my clients when I am coaching them in developing their own businesses. Far too much time is spent on planning and thinking.

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Now, planning and developing ideas do have their place when you are creating your own business, but there is a line. If you spend 80% of your time thinking and planning, your business is not going to launch.

Take a simple example. When I began my YouTube channel just over three years ago, I spent a week planning what type of videos I would produce and then I began recording. My first video was terrible, but the process of putting out the videos week after week led to my learning better ways of producing videos which fuelled my channel’s growth.

I see far too many people planning and thinking about what they want to do and not producing the content. If you spend 80% of your time producing content and 20% of your time planning out your content, no matter what medium you are producing for, you will see positive results. If you turn that ratio around, you are not going to see much by way of results.

Stop for a moment right now and ask yourself: “What could I do today that will give me 80% of the results I most desire?”

Use Your Calendar to Review How You Spent Your Time

Your calendar is your most powerful analytical tool when it comes to seeing how you spend your time each week. If you see you are spending a lot of your daily time in meetings and dealing with co-worker issues, you will find you are not focused on the 20% where the real results are.

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If you have taken the time to write down the activities that give you 80% of your results, then review your calendar at the end of the week to see where you are spending your time you will be able to make adjustments; so you are more focused on the activities that give you the biggest positive results. Block time each day to work on those tasks.

Try to eliminate those tasks that do not bring in much by way of results. If you can do so, delegate them to other people better able to complete those tasks for you so you can spend more of your time each week on tasks. This will give you a much better return on your time investment.

To really take advantage of the 80:20 principle, you need to be aware of where you are spending your time each day.

If you are a content producer, then you need to be producing content, not wasting time analyzing analytics. Of course, analytics is important if you want to see growth, but without content, you will not have any analytics on which to base your future content. So 80% of your time needs to be spent on producing content.

If you are in sales, if you spend 80% of your time planning out your sales calls and only 20% of your time in front of your customers, your sales performance is not going to be very good. Turn that ration around. Spend 20% of your time planning out your calls and 80% in front of your customers.

Key Takeaways

So to make the 80 20 rule work for you, remember these:

  • Be very clear about what it is you want to achieve. What will a successful outcome look like? Then identify the 20% of action steps that will get you 80% of the way there.
  • What are your majors and minors? What daily activities could you do that will create constant motion towards achieving whatever it is you want to achieve? Do those every day.
  • Reduce the amount of time you spend thinking about doing something and just start doing it. If you are spending 80% of the time thinking and just 20% of your time doing you have the ratio back to front.
  • Identify which action steps you have taken over the last week that had the biggest positive impact on your goals. Do more of them next week. Prioritise them and schedule the time in your calendar.

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Featured photo credit: Anete Lūsiņa via unsplash.com

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