With this blog, I’m pleased to announce the start of a new business education series – Beginning a Business. Yes, I know I recently wrapped-up a series about selling a business. But now, I am going back to the beginning… starting a business.
As a financial planner with years of business planning and growth, I work with people like you often. I know where you are… you have a BIG IDEA, and you are excited about it. But removing the emotion, the implementation starts with assessing your business idea. In this series, we will start here as the first step to getting your business running.
“I don’t want my dreams to die. I don’t want the wisdom I’ve earned through the school of hard knocks to go to my grave and never benefit others.” – Justin Goodbread, Knoxville CFP®Click to tweet
This may sound a little strange, but have you ever wondered how many business ideas never amounted to anything? Now, don’t think me weird, but one of the things I like to do is go to old cemeteries to find the grave markers that are hundreds of years old. They fascinate me. When I was a kid, I learned how to do grave rubbings with paper and a piece of lead revealing what the headstone said even when I couldn’t read it.
Whenever I run across these old headstones, I feel a significant sense of loss and sadness. I’m not sad that the people died. That’s life and death. What makes me sad when I look at old gravestones is the insurmountable number of dreams that will never be fulfilled, the wisdom that will never be shared.
Friends, I don’t want my dreams to die. I don’t want the wisdom I’ve earned through the school of hard knocks and formal education to go to my grave and never benefit others. That’s why I do Financially Simple. I want my big ideas to matter and to mean something to people like you.
If you’re seriously thinking about starting a business, then chances are you have a BIG IDEA that will solve a problem or add value to others’ lives. Maybe you’ve figured out how to make a process easier, or you’ve just graduated with a certification, a license, or an advanced degree in a professional field. That’s awesome, friend! Way to go! However, to build a great business, you need to spend a little bit of time preparing before you begin implementing.
So many times, I see people get a hair-brained idea and just take off. They start charging ahead with anything and everything with no clear direction. In those cases, some people do make it. I’ve met a few people who, “just by accident” or “just by circumstance,” survived the upstart of their business. Amazing to me, though, is the number of people who never make it past year one or year two in their business. According to the U.S. Bureau of Labor Statistics, about 50% of all new businesses survive 5 years or more, and about one-third survive 10-years or more. Friends, this is sad to me. I hate this statistic!
If a client of mine comes to me with a BIG IDEA for a new business, I personally recommend that he walk through that idea in his mind before he takes off running. I want him to stop. Stop and run that idea through a mental test. Determine whether or not that BIG IDEA could launch a legitimate, profitable business.
I love being around young, aspiring, wanna-be business owners who are full of vigor and vision. You up-and-coming entrepreneurs have a certain energy that I want. Whether you want to open an auto-maintenance garage, an Internet-based business centered around an application, or a medical practice, you must clearly define your product, your service, or your product and your service. For example, the dentist will offer services. The app developer will offer a product, and the auto-garage owner will offer both products and services.
Before you jump into marketing and selling, you must know exactly what you are providing. Are you offering products? Services? Products and Services? Have you created a widget? Are you producing something that can add value to existing products or services, or are you offering a unique skill set or service?
Next, you want to look for similar businesses that are currently operating in your geographic or niche market. What are they doing well or poorly? Is there a strong enough market demand and/or a large enough customer base to support multiple businesses that sell similar products or services? Or, does your product or service add enough value to the existing marketplace that you can capture a different niche within the marketplace? Can you meet a need through location alone?
Your challenge is to determine how you can provide your identified product or service to your potential future customers for better results than your current competition. If multiple auto-garages, internet applications, and medical practices exist, then what can you do better than your surveyed competition? You can choose to have low prices or high prices, high quality or low quality, exceptional service or poor service. An old adage even says that you can only be good at two of those things.
I won’t argue the merit of that debate, but I will ask you a question. When it comes to price, quality, or service, can you outperform other businesses in two of those areas? For instance, if you have higher quality and service than a similar business, you can charge higher prices. If you have low prices and excellent service, you can get away with slightly lower product quality. You get the picture.
After you look at the current marketplace, you want to talk to your closest friends and family members to get their initial thoughts about your BIG IDEA. Now obviously, you don’t want to shout your idea from the mountaintops because you may truly have the next multi-billion dollar idea. Therefore, be careful who you tell. You want to make sure others keep your idea confidential.
You also want to take some of the advice you receive from friends and family with a grain of salt. If they truly care about you, they’re going to build your confidence. Your momma’s typically going to tell you, “Son, you can do anything in the world you wanna do.” Honestly, you will need that support and confidence to accomplish your BIG IDEA, but you also need someone to dissect your idea and tell you why it can’t work. You need critical advice delivered in sugar-coated love.
Possibly most important when you get a BIG IDEA is to find the motivation to keep on keeping on. If you don’t want your dreams to die, then you have to find the motivation to continue when things get rough. Business will wear you out. Just this week alone, I’m working on about 70-80 hours of time away from the house during working hours. I’ve not walked into my house before 10:00 at night, and I’ve left every morning before 5:00 am. Friends, I’m tired. Yet, I find continuous inspiration from two little items on my desk that I see every day. One item is sweet, and the other is motivational.
On top of my desk is a little car. To be exact, it’s a metal die-cast representation of a 1964 Shelby Cobra. I find the car’s story interesting, and I think Tim Allen and Jay Leno each have one as well. It carries a high price tag, but man, I fell in love with it when I was about 15-years-old. Since then, I’ve said that one day I will own a 1964 Shelby Cobra kit car because I don’t think I’ll ever want to afford the original. It’s like half a million dollars or more, and that’s a lot of money for me to pay for something that’s just a piece of metal with paint on it. However, I like the car, and my motivation is that one day, I will buy a car that’s similar to that Shelby Cobra. So to me, it’s motivating.
Sitting right in front of that Shelby Cobra is a Lego® creation that spells out the word “DAD.” I intentionally keep that creation in front of the car because it reminds me that even though I can work very hard, even though I can get up and chase the dollar every day, there are things that are more important to me.
For me personally, I’m not so sure I want to work like Tony Robbins and Gary Vaynerchuk. I want to get behind them like a cheerleader at a football game and scream at the top of my lungs. I want to tell those guys to “Go make it happen! I’m here for you!” I want to chase my dreams like that and make my dreams happen. But I’ve got these amazing little kids at home who made the word “Dad” out of Legos®. And at this particular phase of my life and my family’s life, there’s nothing more important to me than to make sure those kids know their dad. My goal is to do everything within my power to inspire my kids to chase their own dreams one day.
With those two items staring at me every day, I stay motivated. I’m motivated to stay focused while I’m at work. Then, when I get home, I’m motivated to be there and stay focused on my home life.
So my challenge to you today is simple. Dream big. What are your dreams? What’s your BIG IDEA? Let’s make it happen.
Make it happen by identifying your product or service. Survey your marketplace. Throw your idea around to family members and friends. And finally, stay motivated.
Let’s think big and dream big. Life is hard. Business is frustrating. Starting a business, friends, is not for the faint of heart. You better have some gumption. While you chase your BIG IDEA, I’ll keep the money side, at least, financially simple.
Next Step: Turning your great idea into a thriving business will take a special person. Do You Have an Entrepreneurial Personality?