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What You Should Know Before Starting Your Very First Business

What You Should Know Before Starting Your Very First Business

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.

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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.

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    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:

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    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?”

    On marketing

    • 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 Revisited7 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?

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    Brian Lee

    Chief of Product Management at Lifehack

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    Published on March 20, 2019

    How to Write a Powerful Mission Statement for Your Business

    How to Write a Powerful Mission Statement for Your Business

    Have you ever felt lost in the minutia of your job?

    As a business owner, I can relate to getting bogged down in the day to day operations of my business. Things like inventory, payroll, scheduling, purchasing and employee management take up the bulk of my day.

    While these things are important and need to get done, focusing too much on the details can make you lose sight of the big picture. This is why having a good mission statement comes in handy.

    What is a Mission Statement?

    Put simply, a mission statement is an internal document that provides a clear purpose for the organization. It provides a common reference point for everyone in the organization to start from.

    In other words, after reading your company’s mission statement, managers and employees should be able to answer the question “What are company’s main objectives?” For example, Southwest Airlines mission statement reads:[1]

    “Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.”

    In this single statement, Southwest conveys the company’s goals of providing the highest level of customer service as well as providing a good working environment for their employees.

    Mission Statement VS. Vision Statement

    While the mission and vision statements are related, there are subtle but distinct differences the you should be aware of.

    First of all, a mission statement is designed primarily as an internal company document. It provides clarity and direction for managers and employees.

    While there’s nothing wrong with sharing your company’s mission statement with the outside world, its intended audience is within the company.

    While a mission statement provides a general framework for the organization, the vision statement is usually a more inspirational statement designed to motivate employees and inspire customers. Going back to Southwest Airlines, their vision statement reads:[2]

    “To become the world’s most loved, most flown, and most profitable airline.”

    This statement inspires good feeling from the customer while motivating the employees to achieve that vision.

    What Does a Good Mission Statement Look Like?

    When coming up with a mission statement, it’s important to take your time and do it right. Too often, people (especially entrepreneurs) just write down the first thing that comes to mind and they end up with worthless or (worse yet) a generic mission statement that is utterly useless.

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    Remember, a mission statement should provide a common framework for everyone in your organization.

    When writing a mission statement, you should always try to incorporate the following;

    • What we do?
    • How we do it?
    • Whom do we do it for?
    • What value are we bringing?

    Now, you can see how tempting it is to just come up with something generic that ticks off those four boxes. Something like “We provide the best widgets available online for the consumer.”

    After all, that did check off all the boxes:

    What we do? Provide widgets.

    How we do it? Online.

    Who do we do it for? The consumer.

    What value we bring? The best widgets.

    The problem with this mission statement is that it could apply to any number of companies producing the same widget. There is nothing to distinguish your company or its widgets from any of your competitors widgets.

    Compare that mission statement to this one:

    “We provide the highest quality widgets directly to the consumer at an affordable price backed up with a 100% satisfaction guarantee. If our clients aren’t 100% satisfied, we’ll make it right.”

    What’s the difference?

    Both mission statements answer all the same questions of what, how, whom and value. But in the second statement, they are differentiating their company from all other competitors by answering the question “what makes us unique”.

    Another way to read that is, “Why you should buy from us.” In this example, it’s because our widgets are of the highest quality and we stand behind them 100%.

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    You might have noticed the statement didn’t say that we sell widgets at the lowest possible price. That’s because we are emphasizing quality and satisfaction over price.

    A different company’s mission statement may emphasize selling widgets at the lowest possible price with little to no mention of a guarantee.

    Hallmarks of a Good Mission Statement

    1. Keep It Brief

    Your mission statement should be no longer than three sentences. This is not your company’s magnum opus.

    You should be able to distill the what, how, who and why questions into a succinct message.

    2. Have a Purpose

    A company’s missions statement should include the reason it even exists.

    Make clear exactly what the company does with statements like “We strive to provide our customers with …….”

    3. Include a “How”

    Take this as an opportunity to differentiate your company from its competitors.

    How do you provide a product or service that’s different or better than how your competitor provides it?

    4. Talk About the Value You Bring to the Table

    This is where you can really set yourself apart from the competition. This is the “why” customers should buy from you.

    Do you offer the lowest prices? Fastest delivery? Exceptional customer service? Whatever it is that sets you apart and gives your particular products, services or company an advantage talk about it in the mission statement.

    5. Make Sure It’s Plausible

    It’s okay to shoot for the stars just to settle for the moon, but not in a mission statement.

    Being overly ambitious will only set you and your employees up for failure, hurt morale and make you lose credibility. You will also scare away potential investors if they think that you are not being realistic in your mission statement.

    6. Make It Unique and Distinctive

    Imagine if someone who knew nothing about your business walked in and saw how it was operating, then they read your mission statement. Would they be able to recognize that mission statement was attached to that business? If not re-work it.

    7. Think Long Term

    A mission statement should be narrow enough so that it provides a common framework for the existing business, but open enough to allow for longer term goals. It should be able to grow as the business grows.

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    8. Get Feedback

    This is very important, especially from managers and employees.

    Getting their input can clarify how they currently see the company and their role within the organization. It’s also a good way to get people “on-board,” as studies show that people are more likely to go along with an idea if they feel included in the decision making process beforehand.

    9. Review Often and Revise as Necessary

    You should review the missions statement often for two reasons.

    First, as a reminder of what the essence of the company is. It’s easy to forget when you are in the day to day grind of the business.

    And two, to make sure that the mission statement is still relevant. Things change, and not everything can be anticipated at the time a mission statement was written.

    For example, if a mission statement was written before the advent of the internet, a company that use to sell things door to door now probably has a website that people order from. You should always update the mission statement to reflect these changes.

    The Value of Mission Statements: Why Go Through All of These in the First Place?

    It may seem like a lot of work just for a few sentences that describe a company, but the value of a well written mission statement should not be discounted.

    First of all, if you are an entrepreneur, crystallizing the what, how, whom and value questions will keep you focused on the core business and its values.

    If you are a manager or other employee, knowing the company’s basic tenants will help inform your interactions with both customers and colleagues alike.

    Strategic Planning

    A relevant mission statement acts as a framework for strategic planning. It provides guidance and parameters for making strategic decisions for the future of the company.

    Measuring Performance

    By having the company’s mission in a concrete form, it also allows for an objective measurement of how well the organization is meeting its stated goals at any one time.

    Management can identify strengths and weaknesses in the organization based on the criteria set forth in the mission statement and make decisions accordingly.

    Solidifying the Company’s Goals and Values for Employees

    Part of a well run organization is nurturing happy and productive employees.

    As humans, we all have an innate need for both purpose and to be part of something larger than ourselves. Providing employees with a clearly defined mission statement helps to define their role in the larger organization. Thus, fulfilling both of these needs.

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    Now I’m not saying that a mission statement can overcome low pay and poor working conditions, but with everything else being equal, it can contribute to a happier and more productive workforce.

    To Hold Management Accountable

    By creating a mission statement, a company is publicly stating its highest values and goals for the world to see. By doing so, you are inviting both the public and your employees to to scrutinize how well the company lives up to its ideals.

    So if you state that you only provide the highest quality products, and then offer something less, it’s fair for both the public and the employees to question, and even call for a change in management.

    If management doesn’t take the mission statement seriously, no one else will either; and the legitimate authority that management rely’s on will be diminished.

    To Serve as an Example

    This is the opposite side of the coin from the previous statement. If the highest levels of management are seen taking the mission statement seriously and actively managing within the framework of the statement, that attitude filters down throughout the organization.

    After all, a good employee knows what’s important to their boss and will take the steps necessary to curry favor with them.

    Finally, use the company’s mission statement as a way to define roles within the company. You can do this by giving each division in the company a copy of the mission statement and challenge the head of each division to create a mission statement for their respective departments.

    Their individual mission statements should focus on how each department fits in and ultimately contributes to the success of the company’s overall mission statement. This serves as both a clarifying and a team building exercise for all parts of the organization.

    Final Thoughts

    Developing a mission statement is too often just an after-thought, especially for entrepreneurs. We tend to prioritize things that we perceive will give us the biggest “bang for our buck.”

    Somehow, taking the time and effort to sit down and think seriously about the what, whom, how and value of our business seems like a waste of time. After all, we got in the business to make money and become successful, isn’t that all we need to know?

    That mindset will probably get you started okay, but if you find yourself having any success at all, you’ll find that there really is such a thing as growing pains.

    By putting in the time and effort to create a mission statement, you are laying the groundwork that will give you a path to follow in your growth. And isn’t building long term success what we are really after?

    More Resources About Achieving Business Success

    Featured photo credit: Fab Lentz via unsplash.com

    Reference

    [1] Southwest Airlines: About Page
    [2] Fit Small Business: 10 Vision Statement Examples To Spark Your Imagination

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