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10 Things to Remember When Starting A Business

1)  Your business does NOT have to be completely unique…

If that was the case then there wouldn’t be McDonald’s AND Burger King selling hamburgers, in other words, don’t wait for the lightening to strike before you seize the day and begin your entrepreneurial journey. You’re idea does NOT need to be unique but how you execute should be – better?  faster? Cheaper? more bells and whistles? Less? Ideally find and focus on a real difference that your customers or prospects will care about then tell them over and over again, in as many ways as you can. 

2)  You do NOT need to quit your day job to be a true entrepreneur…

We would all love to write that resignation letter and tell the MAN where he can put his ‘stinking’ job (Read with Tony Montana Scarface accent)….but everything about starting a business takes, at best, twice as long as you expect to get every task done.  If you can slowly gain momentum with your business, test it out, get a few happy, reference-able customers without giving up the pay check then you may want to think seriously about biting your tongue until your new business can keep you in the style you have grown accustom.

3)  You do NOT need to spend a fortune to test a new business idea or product…

If it’s a physical product, create a prototype, find some would-be-customers and ask them what they think…believe it or not, prospects LIKE being asked their opinion – especially before all a products features are locked in. And if you’re lucky, those discussions will help you find something unique that none of your competitors have which will really increase interest and demand. It will also help you understand the mindset of your prospective customer and what do I mean by that?  A few things – what is important about the product to them and how they talk about it – this will help you understand what elements you need to focus in on when marketing your product and how to communicate about those elements in a way that resonates with your prospects. 

Blatant example – surfer dude product, pitch using the latest phrases and terminology of the target customer. Without spending the time to get into those conversations, you would probably resort to throwing in a few ‘Dudes!’ and hoping for the best… 

If it’s a website or software then consider finding an inexpensive freelancer from elance – they often have people who can create a cheap testable version of a site or software without requiring a second mortgage on the family pet.  Make sure you take a good look at the reviews from other folks who previously used their services.

4)  You do NOT need to use an expensive lawyer to create a legal entity…

First there are many low priced options found on the web but even better (in my opinion) is to go directly to the source.  In my case I found the New Jersey local government website and used their pretty easy to understand website – establishing a business in a State brings revenue so you’ll find most States are very helpful when it comes to helping you establish your business.  You can spend a fortune or even a few hundred bucks to a lawyer – but it took me about an hour to do online via my States site and all I paid was the regular registration fees via credit card.

Worth considering.

5)  You DO need to go that URL or web address…

Go to a site like  www.GoDaddy.com and use their web address search capabilities to find the ideal url (web address) for your business and register it. This matters whether the business is web or product or service based –

6)  Consider protecting your business by registering a Trademark, Service mark or Patent.

I’ll write a more in depth post on this area but consider if you need protection for your new business, especially if it’s unique or if you intend to build some kind of brand image around the product, service or website.  The core reason for considering something along these lines is to ensure no one comes along later and capitalizes on your hard work in building the customer recognition in your particular business.   If you decide to explore this, here’s where you go –

http://www.uspto.gov/

Again, you CAN spend a fortune on a lawyer but again, online resources of this government agency is getting better and easier to understand than a year or two ago – so you may find you can do some or all elements yourself. This obviously depends on your time and comfort level.  Take into consideration a couple of things: a) registering a patent, trademark, service mark etc is a process and takes time and money b) if someone infringes your patent or trademark – do you have the sums and the focus required to defend it?

7) You do NOT need others to give you the Confidence you need to pursue your idea…

You don’t NEED to have people tell you your business will be wildly successful, do you?

Sure, it would be nice to have a whole group of friends, relatives and better, angel investors, tell you YOUR idea is the next world changing business but their fond wishes (alone) and claps on the back will not move your business one inch closer to being a reality.  What you need, more than anything else (even cash) is the passion, commitment and just plain grit to make your business a success.

When talking to others about your business ideas – you may want to consider the following:

a)  Often, feedback from others can be inversely related to your relationship. Huh? What do I mean by that? It’s simple, those people without a stake in your future will probably tell you how great the idea is and how you should tell your boss where to get off tomorrow…your husband or wife will probably not, the reverse in fact. Inverse – see? Few will give you feedback on your business idea in a vacuum so, do yourself a favor and talk to the people who really matter – prospective customers.

b) If people you speak with input into the idea or product concept or prototype then they may have a legal stake in your company’s future. True!  With my first company, my partners Father helped him out when my partner was working in his workshop – throwing in some ideas. He then talked about suing the company for some degree of ownership once the business was worth something until he received a significant amount of equity. Money makes people do some pretty strange things, so be careful about working with others on your prototyping, concept development etc.

8) You don’t HAVE to have a Business Partner…

With the first few companies I started, I was nervous. Would it take off? Would people buy? Could I get everything done? Frankly – the questions and fears seemed endless. One of the first things I did was find someone to talk to about my ideas as a way of getting alternative opinions and one person in particular seemed enthusiastic about my concept.

“Hey X – why don’t we do it together?”

…it seemed so natural at the time. Like lemmings, there seemed to be a reassurance in numbers, ‘cos if two people wanted to pursue the business idea then maybe it wasn’t so crazy after all…makes sense right?

Wrong!

Being in partnership in a Start-Up is TOUGH! There is stress and pressure involved in starting a business and you need to know what roles each partner will be responsible for delivering – ideally, your partner’s strengths should match your own weaknesses. Also consider ego – can you guys work together for 18 hours a day without ego getting in the way? How will you run the business? Will one person be the ultimate decision maker or will you run everything by committee? Sure, committee, why not? – It worked for early twentieth century Russia didn’t it? (Is the sarcasm coming through?)

So by all means get a business partner but make sure you both do your due diligence and consider ‘dating’ for a while before you commit to full on marriage.

9) Write a Business Plan and develop Financials EVEN THOUGH they’ll be WRONG!

I guarantee you your business plan and financials will be WRONG!

It will (if you are lucky) take you twice as long as you expect to get everything done – from product or web development…all the way through to getting your first customer or your first five thousand customers. 

It will (if you are lucky) cost you twice as much as you put into your initial business plan financials to do pretty much everything.

And there are so many unforeseen costs and challenges that as soon as you press ‘SAVE’ on your final business plan and their financials – your plan is already likely to be wrong.

So why do it?

Because by going through the process of thinking about your new business and all its dimensions, you WILL spot challenges, issues, opportunities and you will probably have quite a few ‘A HA’ moments that could save you pain, time and money and point you towards some other exciting short and medium term ways of improving your business. It’s a process that should also help you determine timings of your business roadmap – i.e. when you will need certain resources such as people, additional funds, office space and so on.

Yes – your business plan will be wrong but it will be a good guide – without it, you are shooting from the hip and hoping for the best. Fun but riskier than it needs to be.

10) Create and prove Value BEFORE you raise money (if possible)…

The more value you can create and prove before you ask people to invest, the more of your own company you will probably be able to keep. It’s a simple equation – if you prove value then you are proving your company is more ‘valuable’ – therefore you get more dollars for a slice of the business than you would before proving that value.

An idea is worth something…

An idea with a prototype is worth X more…

And idea with a paying customer isn’t an idea – it’s the beginning of a business…

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I hope these points have been helpful. Let me know and consider joining our mailing list if you would like more.

Here’s to your Start-Up Success.

Andrew