Do This Before Starting a Business

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Starting-A-Business Advice for My Niece

My niece is a cool chick.

She’s got tats and sass.

She’s also got mad skills with dogs, and has been toying with the idea of opening her own dog grooming business.

She reached out to her auntie (Tata Michelle) for some getting-started-in-business advice.

Business: Ya Gotta Start Soon and Ya Gotta Start Smart

I’m happy she’s excited about helping animals. Having motivation beyond making money is important. It will get her through the tough days.

Business Tip: Have a real interest in your business. I talk about my reasons for starting this business in my first ever blog post. (1)

I have a million other tips, suggestions, warnings, and ideas, but I realized, she’d figure out most of it herself. You will too.

So I reached deeper into my psyche and pulled out the BIGGEST starting mistakes that I had made.

Had I known about these earlier, I would have been successful in business MUCH SOONER and made a lot more money.

I’ll share those mistakes with you.

But before we get started, let me warn you…

Getting started is scary and exciting. It’s easy to get lost and overwhelmed by trying to have all the answers to everything before you get started. Start soon. Read my post on why spending too much time researching can keep you from success. (2)

Beginning Business Mistake #1: Playing It Too Safe

You are just getting started.

Naturally you are thinking about your business name and concept.

You’re thinking about a logo, brand colors, brand font, marketing, and service options. You’ll also consider pricing, and how you’re going to get it started.

That’s all good stuff. BUT, (Not a big butt, but a big but….)

Before you do ANY of this, you must decide how to be different from your competition. Not just a little bit, but in a big way. In other words, don’t try to echo what others are doing.

Why It’s Important:

If you play it too safe and look like all the other businesses around you, you will be forgettable. No one will talk about you. It’s safe, but (yawn) boring.

A big key to big success: Don’t be boring.

What to Know:

New owners feel safest doing what is expected, so they copy other businesses like theirs. They don’t copy everything exactly, but they try to copy the “feel” of the business. If that’s you, then…

STOP.

It’s time to be brave and make something unique and something that stands out. Choose a different type of message or different process, or different tone. Surprise people. Don’t give them what they expect. Give them the opposite of what they expect.

Not everyone will love it. That’s okay.

You don’t need every single person to love it, you only need a percentage of the people. Those who “get it” will choose to become raving fans.

Your business will attract people who get you and your unique approach.

Be bold, be different, and they will talk about you and come back for more.

Recommendation:

The “Business Done Differently” podcast is a gem for getting you to think creatively. It’s by Jesse Cole, the owners of The Savannah Banana’s baseball team.

His team serves up baseball like you’ve never seen it before. Check out the Savannah Banana’s video on their “About” page. See just how far they’ve pushed their baseball team to be different. (3)

Jesse’s book is called “Find Your Yellow Tux.” It’s meant to inspire creative thinking in business. (4)

If you don’t listen to any other podcast, listen to this one before making any big decisions. (5)

It will completely change what you create. I promise, you will be inspired.

Beginning Business Mistake #2: Starting Without Knowing the End Result

At first you are wearing all the hats. You do all that needs to get done. All the fun stuff, all the boring stuff.

Then you’re years into your business and it’s grown. You’ve hired employees or independent contractors because you are getting busier. There are so many ways to go with the business. So many possible ways of growing it.

Great? Maybe. Maybe not.

Why It’s Important:

The choices you take will make on the fly will make a big impact on what you’re going to be doing day in-day out.

Are YOU doing paperwork all day long? Are you answering phone calls? Are you training new employees? Are you boxing and sending packages?

Are you still having fun?

Plan out your path now, so you don’t find yourself painted into doing work you don’t enjoy three years from now.

And…another reason you’ll want to plan ahead.

Would you like to sell your business in the future? If so, you should learn up front what makes a business sell-able….salable? Salable. Interesting to buyers.

Not everyone wants to sell their business. It’s a decision you should make early.

And it’s a decision that requires some extra work starting from day one.

What to Know:

Let’s start with what you will be doing while still in business.

1. How Much Money Do I Want To Make?

A Purdue University study shows that an ideal income for happiness is between $60K and $95K per year. The difference reflects the cost of living in different regions. I talk about it more in another post. (6)

In other words, if you make more money than $100k a year, it doesn’t add much to your feeling of well-being.

So start by asking yourself, what size business do I need to have to make X number of dollars? (Whatever your money goal is).

If you want to have a business where you do most everything yourself, it’s call freelancing. You can find books and podcasts and classes focused solely on freelancing.

If you want to make money on the weekends and off times, while you work a regular job, it’s called a side hustle.

There are tons of people giving advice for side hustles.You can have a side hustle as a freelancer. Or it can be a full-time gig.

You are an entrepreneur if you have a bigger business with employees.There’s tons of info on that too.

Knowing early on which one you want and how much you want to make can help you choose which category you land in.

This leads us to the next question.

2. How Much Outside Help do I Want?

What do you hate to do? What part of your business do you love to do?

When developing a business, consider your personality and how you enjoy operating around others.

You can hire independent contractors to help you. You can hire a book keeper, a CPA, a lawyer, and a marketing professional and more if your budget can handle it. These people run their own businesses. You’d be one of their clients.

Do you want employees? If so, what work would they be doing? Can you continue to do what you love?

If you want to grow a big business, or duplicate your business, you’ll need to create systems.

There are systems for training new employees. How will things be cared for? What does the client interactions look like? What systems for communicating do you want to implement? Everything will need to be spelled out step by step.

Every choice you make is with the end in mind.

IN SHORT: How much income are you happy with? How much growth do you require? How much do you want to manage others? How involved will you be in the business? How long do you want to be in business? Do you want to sell your business at some point?

Do you want to sell your business to me? I’ll pay you three bucks. I’m good for it.

Beginning Business Mistake #3: Underestimating the Power of Pre-Planned Marketing

Marketing is how you get people to know you exist and how you keep customers returning for more. Marketing is more than a website. Marketing is more than advertising.

It’s how you separate your brand from others.

It’s how you do things.

It’s how you treat your customers.

It’s how your business interacts in the world and how you get others to sit up and notice.

Why It Matters:

Without great marketing, you’re dead in the water.

I’d be a lot more successful had I understood how important marketing was early on.

Seriously, the more you focus on marketing, the more successful you will be.

I started with a website, business cards, and a listing in the yellow pages for my first business. That was my interior design business.

Yellow Pages? That’s before your time, I’m sure. It was a listing of all different types of businesses. It had ads that cost money. Every house had this book. It worked reasonably well before we had the internet.

That was my idea of marketing. I didn’t know what else to do, so business just trickled in.

This made it very difficult to stay in afloat.

What I SHOULD have spent money on, I didn’t.

I should have spent some bucks on professional help like interior photography.

I should have spent money on figuring out how to get people’s attention online. And I should have had a clear marketing plan figured out before getting started.

Instead I fell prey to offers that cost me money and took me off track.

For example, I said yes to a discount coupon booklet that real estate agents give to their customers.

Sounds good right?

I spent thousand dollars but it didn’t pan out.

Ouch. I got one small customer from that booklet.

I didn’t really think it through. The real estate agents covered a residential area that did not have money to hire me. I discovered that it was the real estate agents that drove the excitement for vendors in the booklet.

To get more customers, I would have to spend time marketing to the real estate agents. I would need to convince them of my expertise.

I found out that none of the agents were that interested in sitting down with me. They were busy. They didn’t care. My business was in their hands and they didn’t know me or my work.

In the end, it wasn’t worth my time or money. It was an expensive lesson.

I started listening to podcasts, and taking some marketing classes. Now I have a much clearer idea of what kinds of marketing will work for my business. I have a plan.

You should have a plan too.

What to Know:

As I said, marketing can make or break your business.

It’s worth learning as much about it as possible as early as possible.

Explore the tools available for your type of business. Make those important decisions early on.

Some different types of marketing include:

1. Traditional Paid Advertising: TV commercials, newspapers, magazines, etc.

2. Social Marketing: Using platforms like pinterest or instagram or facebook.

3. Email Marketing: Find new clients through social networks or blogging, Then send emails to directly advertise your product or service.

4. Pay-per-click Marketing: People are shown an ad with a link. They click on it and are sent to your website.

5. Relationship Marketing: Focus is on enhancing existing relationships and improving loyalty.

6. Word-of-Mouth Marketing: People tell others about your product or service. This comes from exposure to an excellent or stimulating product, service, or experience.

7. Guerilla Marketing (aka Stealth Marketing): Showcase a product or service without being obvious. Often low cost, but requires creative thinking.

8. Transactional Marketing: Use of coupons, discounts, special events, etc.

Usually, the best approach is a blend of two or three of the marketing areas listed above.

Marketing takes planning, effort, time, and money, so getting it right early on is important.

Helpful beginning resources to consider:

Wix is a great website hosting company for most small businesses. (7)

The website is already done for you except making it your own. You add your own text. Change pictures, change colors, choose different fonts and move elements around. You can also add more pages and a store. It’s great.

For high volume sites expecting a lot of daily traffic, build a website using WordPress. This is the most common type of website for bloggers for example. (8)

My husband, who also has a small business, hand drew a logo that he liked, then hired a Fiverr designer to dial it in for him. He used it in print and embroidery.

Fivrr, Upwork and 99designs are places to create your logo, website brochure, business card, and more. (9) (10) (11)

The serious stuff comes from educating yourself. Read books, listen to podcasts, and take classes.

Learn About Business While Doing the Dishes: Podcasts Rock

Did you know that there are hundreds of podcasts out there about business and marketing? Most are free.

Sometimes I listen to podcasts at 1 1/2 speed so I can absorb info faster. They keep me company when I wash dishes or fold clothes or eat lunch or drive in my car.

Some favorites:

The Marie Forleo TV and Podcast: There are videos, a podcast and a business school called b-school. (12)

Business Done Differently(13)
The How of Business (14)
Seth Godin’s Start Up School (15)
Being Boss (16)
Amy Porterfield (17)
The Business on Purpose Podcast (18)
Entrepreneurs on Fire (19)
The Self Employed Life (20)
Optimal Startup Daily (21)

I found a great list of marketing books you can check out too. (22)

Beginning Business Mistake #3. Not Understanding Cash Flow and Profit

There are many interesting things people focus on when starting a business.

Cash flow and profit are usually not on the list. Nope. That’s because it sounds boring.

It’s not sexy, so no one takes time to learn about it in the beginning. They usually learn about it after their business fails.

Why it matters:

When a business is up and running, it’s hard to find the time to learn about financial stewardship. It’s even harder to fix the problems when you’ve already committed to your purchases.

So my advice is to learn about this sh*t before setting up your banking or accounting.

What to know:

Profit is king. Cash flow is queen.

Let’s talk about cash flow first. This is not a deep dive, but a general overview.

Cash flow is the money flowing in and out of your business. When money is moving in and out, it can get confusing.

You need to pay to keep the business moving forward. This includes fresh inventory, services, office supplies, software, payroll and more.

Let’s say you want to make an improvement. The money needs to be in the bank when you want to buy something, right?

But here is where you can get into trouble.

How do you know when you can afford to buy that extra doodad that will make your thingamajig work better?

Most business owners wing their decisions on how their bank account “feels.”

Here’s the problem.

Go with the flow is what most (unsavy) small-business people do.

But what happens if you spend the money and the next day you realize you have to pay your taxes? Or pay your utility bill? Did you spend money you actually needed to stay in business? Oops.

You may feel you are too busy to do the math every time you want to make a purchase. It’s complicated and confusing and again, it’s ho-hum. But you’ve just gotten yourself into hot water.

You “felt” you had the money, so you spent it. Now you need it. Now you’re in a pickle.

Did you ever hear that song “Feelings, nothing more than feelings…”? Well, it was a terrible song and it’s also a terrible way to run your business.

You hurt your chances for survival if you don’t keep tabs on your cash flow.

What You Want Is A Profit Surplus!

Here’s what it looks like:

You want enough money to run the business, pay yourself, pay your taxes, and tuck away a nest egg of profit.

Profit is what you tap into when life goes down the sh*tter (like maybe a pandemic hits?). Putting aside money for profit before you do anything else can save your *ss.

Let me say that again.

Take profit out of every sale and setting it aside BEFORE you do anything else. This will keep you in business for a very long time.

This is the Profit First model.

It will solve your cash flow problem.

Business Profit From Day One

Mike Michalowicz , a bad-*ss business guy, created a system called “Profit First.” He invented it after losing several multi-million dollar businesses to poor cash management. (23)

His system recommends having several bank accounts.

He starts by putting aside a percentage of each sale as profit. He also sets aside money to pay himself and money to pay the tax man.

He uses the leftover money to operate his business.The order makes all the difference.

This way he doesn’t accidentally spend money he needs to pay himself, or money he needs to pay the government.

He uses his profit for emergencies, or bonuses at the end of each quarter.

This method requires finding a bank that doesn’t charge extra for multiple accounts. So there are trade-offs, but it’s worth it.

You will learn a lot about cash flow and profit, even if you don’t set things up exactly as he recommends.

Mike Michalowicz also wrote “Fix This Next,” which gets great reviews. It’s now on my personal reading list. (24)

Lots to consider! Fun as h*ll to think about it.

Btw, you may not have all the answers and that’s OKAY and normal. The more you can figure out ahead of time, the better, but don’t let that stop you from getting things started.

A Few More Tips for Beginning Businesses

Start your business with the MVP: Minimum Viable Product.

This is the leanest way to get going.

Start with your basic service or basic “product.”

“Minimum” means keep it as simple as possible to start.“Viable” is when you run your business from the income from your minimum product or service.

Don’t add on extras (extra products, extra services, conveniences, etc), until you have the MVP dialed in. Wait until you are making money like a well-oiled machine.

It’s better to do a few things extremely well than to do a lot of things haphazardly.

Add on things only when it makes sense to do so. Add-on’s take time, money and resources to get up and running.

Charging less than your competitors is not a great idea.

It’s not always wise to charge less than your competitors. It becomes a race to the bottom, and you won’t make enough money.

It’s better to be the same price or more and provide extra care, extra luxury, or extra personality.

Be confident in your pricing. It could mean the difference between surviving and not surviving.

There are lots of people out there who have extra cash and they are burning to spend it. Position your product or service to attract them. They don’t care about the price.

For example, I overheard this conversation during a swanky birthday party, “My strategy is to find the most expensive person and hire them. I figure they are the best.”

This can also mean there is no need to have “sales,” although bundling services for a lower price is a good idea.

Bundles: Offering several services together at a slightly lower cost to encourage them to buy more services… a “package deal”

There are thousands of people out there. There are plenty of customers to go around. Don’t undersell yourself or your product if you don’t have to.

Starter money: apply for business grants (free money!).

You may fit into a category that allows you to apply for a grant.

Try starting with the Federal Grant program or the US Chamber of Commerce if you are in the US. Applying takes work. You can recycle similar information to apply to multiple opportunities. (25) (26)

This is a great idea for seed money for funding a small business.

Your local city chamber of commerce is another resource for the “how” of starting a business. Some have start up packets with paperwork inside. Look it up under the name of your city.

The SBA (Small Business Association) has lots of free resources too. (27)

SCORE works with the SBA. They have videos and volunteers to help guide you in your business journey. It’s free. (28)

I’ve had monthly meetings with a score mentor.

Score mentors are volunteers, who have the experience and expertise of running a business.

Their advice is valuable and it’s great to have someone to check in with. Learn from other sources as well. Some of the volunteers are not as up-to-date with current online marketing

You can start marketing immediately, even before you have a business.

Join a forum, face book group, or community support group that is somehow related to what you will be selling. In my niece’s case, she could connect with animal welfare support groups.

Participate often and help people with information and support. They will eventually get to know you as someone who is a giver.

Give cheerfully and often.

Then, when you get your business up and running, the people in those facebook/social media groups will eventually bring you business.

You will have already created goodwill and trust, and they will think favorably of your company because they like YOU.

This is a very valuable way to market yourself. And note that I did not say to announce your business once it’s open.

You will find opportunities to mention your business casually…in conversation. More importantly, you continue to give of yourself.

Give. Give. Give.

When you give of yourself, they will want to give back to you.

They will discover, in an organic way, that you have a business, and they will want to use your business.

See how that works? Give to your community and people will want to support you.

Start now, don’t wait to build trust, which is one of the most valuable assets your business can have.

Okay! Well that’s that.