How hard is it to start a business? Too many people are putting off living a more authentic life as a business owner because they:
- Don’t know where to start
- Don’t know who to ask for advice
- Worry that they don’t have the time/money to file the necessary paperwork
- Have misconceptions on what it takes to open a business now based on the past
We’d like to make it easier for people launch new businesses and help small businesses grow by shedding unnecessary expenses.
Simpler is better, as long as things are as simple as they need to be and no simpler. As Oliver Wendell Holmes, Jr. put it.
"I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity."
With that in mind, here is a simplified guide to the complex process of starting and growing a new business.
1. Figure out what makes you special.
The best business idea in the world won’t work unless you bring something special to it. Instead of brainstorming a list of great money-making schemes, start by thinking deeply on what you care about most and what skills you could bring to problem-solving in that area. List 5-7 things that you are really good at. You may bring in partners with additional skills later on, but at this stage you have to be willing to make this business your life’s work until it is big enough to take care of itself.
2. Validate your concept.
Too many times, entrepreneurs rush from concept to funding before they really establish that the business is viable. Maybe it’s the right idea at the wrong time. Maybe it’s the right idea but you are the wrong one to bring it to life. Maybe it’s just wrong. Validate it by generating a unique selling proposition (USP) document, a competitive analysis of firms that are addressing similar issues and a SWOT analysis of potential outcomes. Your local Small Business Administration can help you build these.
3. Plan out the costs
This is where the field narrows quite a bit. It can be intimidating to look at the actual costs and then commit to a course of action that incurs significant personal and financial risk. You plan should include factors such as licenses, permits, equipment, legal fees, insurance, branding, etc. Here is a spreadsheet to help you calculate common startup costs.
One thing that many new businesses don’t need anymore is an office, with all the associated costs of office furniture, office phones, deposits, etc. Consider a coworking space or a home office to massively cut your startup costs.
4. Choose a business structure
Even if you are a sole proprietor, you might want to incorporate. It’s not necessary, though. Take all the time you need to choose the smartest structure because it is likely to make a huge difference at tax time. If you don’t have friends who are legal advisors and tax specialists, start networking at a local Chamber of Commerce.
5. Line up funding
82% of startup funds come from the entrepreneur. 77% of small businesses are funded by savings accounts. However, that doesn’t mean you have to have a huge stash put aside. An increasing number of businesses today can be launched with just a few hundred dollars. Look over your options carefully before you look for outside funding sources, which always come with strings attached. Reduce your expenses and pour revenues back into growth.
6. Bring talent on board
You have to be brutally honest about what you are NOT good at here. Don’t waste your time and energy trying to learn finance or engineering. Online business networks like PartnerUp or LinkedIn will get you connected to the talent your business needs. Under the new gig economy, you might be better off with contractor agreements rather than employees or business partners. Now’s the time to hone your negotiation skills and your elevator pitch.
7. Spread the word
Marketing boils down to talking to strangers about what you do. You’ve got to reach the maximum amount of people with your most compelling message, but you don’t need to spend a great deal of money to do it anymore. Today, you can source a great deal of the marketing materials you need by taking advantage of open talent markets. Branding, graphics, videos, blogs and many other business basics can be crowdsourced.
8. Adopt, adapt and improve
In the Lean Startup methodology popularized by Eric Ries, one of the central principles is ongoing iterative improvement. That means that, “entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.” Businesses of any size, in any industry can apply these hypothesis-driven principles to start small, course correct and build on successes.
How a small business can compete with the big ones
You don’t have to have a large staff or a sophisticated operation to look like a large-scale business. Spoke transforms your mobile phone into a professional business phone network for 88% less than a traditional phone system. You can instantly set up local numbers anywhere in the world, rely on an AI attendant and easily transfer calls to your business partners. Look like a big company to your customers as you grow into your new role. Try the Spoke app for free and start building a better future.