Starting a small business: what you need to know
Running a business can feel overwhelming. If you have ever worked in a corporate environment, there are numerous departments (e.g. finance, HR/people, marketing, sales, product, etc.). As a small business owner, does that mean you’re supposed to do them all?
The answer is yes and no. Yes, in that as a small business owner (particularly when you’re getting started) you are responsible for everything. Instead of thinking of this as an overwhelming burden try to picture this as an opportunity that you have to control your own destiny without any company politics or bureaucratic ‘red tape’. The ‘no’ part comes in because not every department in a corporate setting is necessarily relevant for a small business that’s just starting off. As your business grows and evolves, so will its needs and that’s when new functions will become more necessary. Also, it’s worth noting that not every task is something that a small business owner needs or should be doing themselves.
So, what do you need to get started as a small business owners? Many people might argue this point, but hear me out. First and foremost to be in business, you need sales.
The question then becomes, what do you need in order to start making sales? How do you get that set up? Here are a few questions that I highly recommend asking yourself to get started:
What you are selling? Is it a product or a service? A combination of the two?
Do you already have an understanding as to whether people have a want/need for this product or service?
How can you deliver this product or service?
Will it take you a very long time to produce? Will it be expensive?
Do you know if anyone else is selling this product or something similar?
Is there is a substitute?
Will you be able to create the product or offer the service at a price point that ensures you are able to sell it for more than it costs to make it?
Of course, this is slightly oversimplifying this process and we could come up with a million additional questions for any of the points above. But, when you’re just starting out it’s important that you have a clear idea of how you’d answer those before you make more of an investment.
Quick Digression
Speaking of investment, when you see that word thoughts of Wall Street and the stock market might come to mind. Or you might think “Oh, well I don’t have a ton of money to invest”. I hear you and that’s okay, but what we are talking about as it applies to small business ownership is focused on two things: time or money. You will either need to raise money (capital) to invest into hiring people who can put in this effort on behalf of the new business you have to start. Or, if you don’t have the capital ready to go you can invest your own time into building up the business. Either way, you will invest a little of both throughout the lifetime of your business, it just depends on finding that right balance between the two based on what resources you have available.
How Are You Going to Sell?
Back to understanding what is needed in order to start making sales. Once you have a better idea of what you’re selling, you need to understand how are you going to sell it. A few things to consider:
Are you going to have an option to sell online?
Or are you going to have a brick and mortar (aka physical presence)?
Or will you offer a combination of the two?
Or will you be able to offer your services at a temporary location (i.e. weekly farmers’ market stands or boutique hotels for seasonal workshops, etc.)
Once you have determined the direction you want to go, it’s important to then research the best options that will give you the most ‘bang for your buck’ in terms of what solution will best meet your needs. For instance, if you have decided to sell your products or services online, what platform will you use? Will you develop your own website or will you sell on a third-party site (e.g. Etsy, etc.)? Is the desired domain available? There are tons of options you may want to consider and truthfully it will require some trial and error. But, our goal is to help you leapfrog beyond some of the basic questions so that you are left with very targeted and controlled ways of implementing trial and error to maximize on the return you will get from what you put in (i.e. your investments).
Who Are You Selling To?
Once you have established what you want to do, potentially how you plan to sell it - you will need to consider who you are selling this to. Now, depending on how you came about understanding that you want to go into business for yourself - you might already know this. Not everyone takes the same pathway toward understanding how to start their own business. Some people start off by identifying a problem that a certain group of people need to be addressed and then spend time developing the solution (i.e. product or service) that will solve it. But, if you are at this juncture and you know that you want to sell something and you’ve thought through initially how you might go about selling it, you really do need to consider who will want to buy this. Some of the questions you might consider:
Who cares the most or has the most need/want for this product or service?
What is this group of people like?
When they aren’t using your product or service what are they doing?
Where do they spend their time?
How much money do they have to spend on your product?
This is a very basic way of defining what you’ll hear from other coaches and consultants as your “ideal customer”; essentially this is called developing a ‘persona’ of your customer and can be a very thorough process in and of itself.
Lets do a quick assessment:
You now have an understanding of the product or service you wish to sell.
You know that there is some kind of want or need for it.
You know who would want to buy it and have a general idea of who that group of people are.
You know how you’re planning to sell it.
You have an understanding of any other competitors or substitutes that exist.
What’s Next?
We can probably spend years talking about each of these three things, but stay tuned as we will share next about:
What makes your product a bit different from your competitor and/or substitute offerings? (This is referred to as ‘unfair advantage’ or ‘competitive advantage’ and can inform your positioning.)
What experience do people have with your product or service? What do you promise they will feel when they utilize your product or service? (This is the foundation of your branding.)
How are you going to get this group of people aware of and buying your product or service? (This is marketing your product or service.)
