So you’re thinking about starting your own business, but you’ve been asking the question “What do I need to start a business?” First off, kudos to you! Being an entrepreneur is not easy, and the fact that you’re asking that question tells me that you’re thinking about it seriously. To be honest, it’s a great question!
But there are a lot of different facets to starting a small business, and I want to be clear here: this is not a walkthrough of all the individual legal-type parts of what you need to start a small business. There are a lot of the little legal things that you’ll need to work through, but there are more important things than the details of that.
Before we go on…
I do want to run off to the side and discuss the more legal, startup specific portion of the business.
If you’re US based, you’ll probably want an LLC. That’s easily filed by going to your Secretary of State website where you can find instructions on how to get it done. Most likely, you’ll be able to set it up on your own without paying massive fees. However, if it’s a little more complicated (like a partnership, for example), you may want to talk with an attorney about how to get it set up.
Everybody knows you need a website now. The internet seems to be the lifeblood of the economy, but most people get too complicated… I’m gonna get some hate from web developers right now, but you don’t need to start your business with a WordPress site! It’s going to be much easier and more cost effective for you to start on a template site for a few years before moving to a WordPress site. Template sites (Wix, Weebly, Strikingly, Squarespace, etc) offer you the flexibility of easy edits so that you can adjust the website as you’re going through business growth instead of having to set aside a whole week to change one page of your website. The fact is, you’re going to make adjustments as you grow your business and until your website is generating revenue, investing in a WordPress site is just going to be a drain on your time and resources.
What I really want to talk about…
Is the fact that there are aspects of business more important than the minute details of operations. I’m going to dive into the 3 of them that cause the most trouble when ignored
1: Business Model
The business model is one of the most crucial parts of building a business.
Definition: Business Model - The exact framework of how and where money flows inside of the business.
Far too often, businesses fail because they don’t take this into account before starting. Many entrepreneurs build out their price based on their own fulfillment of the service or product, and as soon as they have enough demand to necessitate a hire they crumble because there is no infrastructure to support the financial needs of the business.
Every business needs to have margin built into their pricing model in order to promote growth. Sooner or later (hopefully), you will need to hire someone else to do some of the work. So if you want to be able to scale without having to raise prices every time you bring on a new hire, it’s important to take into account exactly how much it is going to cost to cover overhead and include a profit (Which is the lifeblood of your business!). Businesses that don’t make a detailed business model often end up struggling during tax season because there isn’t money set aside for taxes, and regularly struggle with payroll.
If you want a little more direction on this, check out the book Profit First by Mike Michalowicz. It changed my business and life, and it will help you too.
But before you do anything else, build out your business model! To do that, ask yourself these two questions:
- What will I sell?
- How will I price it to make the business sustainable?
2: Marketing and Sales
This is important because we are no longer in an age of “build it and they will come.”
You can’t just exist to attract customers like you used to be able to do in the early 30s – regardless of how amazing your product/service is. Which sucks! I know it does. You put all this effort into building a phenomenal service and website, but no one wants to buy it. In today’s market, you have to find ways to get in front of people and show them why they should buy your product.
The hard truth is, just having a website will not bring you attention like it used to.
Side 1: Marketing
Marketing is all about getting attention.
It’s about determining how to drive traffic to your website, how to grab people’s attention throughout the day so that they think of you when they need someone in your industry. It’s what gets you into the news, and creates a web of blog-links on other websites that point back to yours. Your marketing is going to be unique to your business: you may not need billboard ads, maybe you need a radio ad depending on your target demographic. But marketing is all about driving awareness that you exist.
Side 2: Sales
Sales is where the conversion happens.
For example, we use our website as a lead generator. From there, we have a series of steps (called a sales funnel) that converts those web-generated leads into actual sales. Because the website is just a lead generator, there isn’t much on it that is going to sell to you. What it will do is pique your interest in connecting with us personally, and from there we start the sales process.
You need to have a similar approach. Your marketing is going to involve tools like Google Analytics so you can be sure it’s actually driving attention and not losing leads, and your sales process is going to take those leads and convert them into customers.
In other words: your marketing gets their attention, your sales tells them its time to buy.
As human beings we tend to procrastinate. Without hard deadlines, we often don’t take action.
If you’re starting out, I strongly recommend that you set a timeline for yourself: at what point after startup do you want it to be grown and built up? And if it’s not, that’s your key that it’s probably time to walk away.
Building a business is exhausting and all-consuming. Until it’s built up, it will probably take up a lot of your time that you would otherwise spend doing things like date night. You need to have an end in sight!
When I started my business, I went to my then-boyfriend (now husband) and said “Look, I’m going to be building a business. I’m going to need us to take all of the evening and weekend activities and dates we normally do, and put them on hold. BUT, if this thing isn’t built up within two years, I’ll quit and go back to a corporate job and we can have a life again.”
It gave him hope that we wouldn’t be there forever, and it lit a fire under my butt to get things done. It motivated me to push through the difficult times, even when I was utterly exhausted and overworked. I didn’t want to go back to a corporate job, I hated that! And it gave me so much motivation to learn and keep going, and also a “light at the end of the tunnel” for the moments I was extremely tired.
So do yourself a favor and set a timeline for yourself before you ever start your business. Understand it’s going to take all of your being for a few years, but give yourself an out and a motivator to keep going.
Trust me: having a light at the end of the tunnel makes it possible to push through the craziness of getting a business off the ground in the first place!
About the Author: Stephanie Scheller is a TED speaker, a two-time best-selling author and the founder of Grow Disrupt. In just under a decade, Stephanie has been behind the scenes with more than 5,000 small businesses. She has worked in groups and one-on-one to create total business transformation & help business owners live the life they got into business to create!