Q: What is the most important thing I should know about starting a business to be successful?
I’ve been an entrepreneur in some capacity or another for over a decade and when I talk to anybody about business this is the most common question. You see, everybody, EVERYBODY, either has an idea or has had an idea to go in business for themselves. WE HAVE NO IDEA CRISIS IN THIS WORLD. People by nature are very good at dreaming up things, some of which are ridiculous and some that end up being really cool services or innovations (think “Google”).
One of the worst pieces of advice that has been repeated ad-nauseum in this world is “follow your passion, you won’t succeed unless you are doing something that you truly love”. I know, I know, that sounds so good though! They are right about that part and so are you, it “sounds” great! The problem is most people take that as “I love fishing, it’s my thing! So I need to start a fishing company or a company that makes things for fishing” which usually ends up failing. Why is that you ask? It’s not because that person doesn’t like fishing, it’s because they are trying to make a solution that is looking for a problem and it just doesn’t work that way.
The only way this passion project works is if you have a solution to an existing or burgeoning problem – or a “better mouse trap” so to speak. This has been popularized as “disruption” in some ways but it’s really just how all commerce has operated since the beginning of time.
So what is my advice in most cases? It’s really simple, so simple that people think I’m giving them the lazy answer and not thinking their question through (which is not the case). The answer is…….
I don’t mean going down the wrong road, or chasing madness. But let’s say you are a really good plumber and you work for “Joe’s Plumbing” for 3 years. You know all the ins and outs of this business and want to try and get started yourself. Step one is make sure your personal financial house is in order and you have saved the funds for a good transition to self-employment runway. Then you DO NOT go buy a brand new van and put logos on it/order business cards/design and build a website/take out a 2 page ad in the yellow pages/rent a billboard/hire 2 people in the service staff/etc… (you get the point).
You simply make sure you have an LLC (or operating entity of choice), separate business bank account, good solid accounting setup (most people can hire a bookkeeper or if you understand what your looking at use quickbooks yourself) and THEN start soliciting business. First use your social media to see if anybody you know needs work done, that is free. If they are happy with what you do ask for referrals – you see people by nature want to help other people that they like and that is a beautiful thing.
Why would anybody want to help me you say? Because hopefully you did an EXCELLENT job and charged a fair market rate. Taking care of your customers will go a loooong way in this world, most people can’t imagine that but it is still very true today. Then as your database of clients builds get the tools necessary for your growing business as it can be afforded – like the van/tools/website/cards/FB advertising/etc….
What you don’t do is go out and spend 50-100k hoping your new idea will work and that business of yours will be just as successful as Joes is. You PROVE IT. Then you add what is needs as those things are needed.
In summary, the most important thing to do is START! But let’s crawl before we walk, test the water, build a foundation. Then be successful.
Let’s do the math
Calculate your mortgage or work with the compound interest to see what it can do to expedite your wealth building.