- Business is the ultimate sport, it can be a scary ride, and it takes time. You may feel like you are risking everything, staring the possibility of abject failure in the face.
“If you really look carefully, most overnight successes took a long time,” said Steve Jobs.
Full of energy and bright ideas, Jane wanted to start a business, but the truth is she was dead scared. Here is the three-step process she followed. In terms of preparation, read every book, article, and watch every YouTube video you can, to stand on the shoulders of others. Your smartphone is the entrance to a world-class business school, allowing you to hear what masters of this game, we call business have to say.
Don’t ‘reinvent the wheel’ better to learn from how others have addressed the problem you face in starting a profitable business. Everyone from Oprah Winfrey, Elon Musk to your uncle will say, how you think about problems is critical. Master the fundamentals, stay flexible, and begin by creating just one sale.
1. Mindset is everything [Well almost]
Nothing is impossible, except if you try and defy the laws of physics. In a feasibility study, the first step is always ‘fit with the mandate’, in other words, is the business area, something you know about, or have a sense of passion about?
For instance, if Sam is running a car wash, he is more likely to venture into commercial cleaning services, than going into a completely different area, like wanting to start a radio or TV station.
Often the default position of starting a business is copying what others are doing, like selling clothing and shoes on a social media site, like Facebook.
Nothing wrong with that, but what is the unique selling proposition one brings to competing with literally thousands of others. How do you stand out from the crowd? If Sally, chooses to compete on offering the lowest price, it is a slippery slope, as others will just undercut her.
Just about everyone has a million-dollar business idea in their head. The trick is to sort out the good from the bad and make it fly. It’s very easy to freeze, to get confused, to feel overwhelmed. To say this is too much, I can’t do this. Just take small steps.
There is something wonderful about being in action, somehow once you start moving things look different, you have a changed perspective when you look back. Gradually, you will begin to be able to connect the dots.
2. Master the basics
Elon Musk calls this a ‘first principles approach’ that he used to start Tesla and Space X.
Ask: What are the fundamentals of the business and industry sector you want to enter? What are the assumptions that your competitors make? What is the problem that you are trying to solve? What is it that your customer wants, what are the ‘pain points’ they face? Think about how you want your customers to feel when they purchase your product or service? How is your approach original?
Talk to other entrepreneurs to see what they say, what are their lessons learned? Get a coach — a mentor who has experienced the journey you plan to go on.
Don’t assume you know what your customers want, your strongly held opinions about the marketplace can be your downfall. Let go of your ego, and the desire to be always right. Invert your thinking process, if you wanted to make your business fail, what would you do?
Be curious, question just about everything, ask: Why?
Create a simple business plan, covering sales and marketing, operations, staffing and finance. Put things down on paper, make it as visual and graphic as you can. But have some flexibility of mind, don’t believe the words and figures on paper, things rarely work out exactly as expected. The menu item is not the meal.
Create three scenarios, optimistic, middle ground and worst case. If you can get the business to kick-off, based on your pessimistic worst-case scenario, then you are going somewhere.
Make the distinction between your [operational] plan and a strategy. Every business has a plan, that sits on a dusty shelf, but very few organisations have a leverage point, imaginative, original approach to the market, in other words: a strategy.
Adam Grant, a professor at Wharton Business School writes about originality in his 2016 book Originals and says “The hallmark of originality is rejecting the default and exploring whether a better option exists. The starting point is curiosity: pondering why the default position exists in the first place.”
“We’re driven to question defaults when we experience vuja de, the opposite of déjà vu. Déjà vu occurs when we encounter something new, but it feels as if we’ve seen it before. Vuja de is the reverse — we face something familiar, but we see it with a fresh perspective that enables us to gain new insights into old problems,” writes Grant.
3. Create one win
Apply lean start-up practices. After all, if a lean startup way of doing things works for Toyota, and Silicon Valley start-ups, the approach can work for you.
Start small, create a minimal viable product, the working model, the prototype of your product or service, and test it in the market. When budding aspiring entrepreneurs are asked what is stopping them, getting their bright idea off the ground, most will say: “Don’t have the funds, a lack of capital.”
Formal finance institutions like banks, private equity, saccos, and micro-finance are unlikely to lend to a business without a track record. Most entrepreneurs have to bootstrap and raise funds from their savings, friends and family. By following a lean, low-cost, low-risk approach you avoid backing yourself into a corner, by having large financial obligations.
To begin, your target is to sell your product to one customer. Not your charitable Aunt Nelly, who buys out of the feeling of being sorry for you, and just wants to be helpful. Create a purchase from one genuine customer. Here the aim is to create just one result and show initial proof of concept.
Ask customer number 1: Why did they make the purchase, what features did they value, what could be improved?
Then keep testing, changing adapting the product — service offering based on what customers want. Keep going around the lean startup build-measure-learn loop. Keep changing — adapting to meet the needs of your market. You might make these product changes, by the end of the day, or perhaps after a week. Stay lean, stay simple, stay flexible.
Then gradually grow the customer base from one to two to four to 16 and just keep going. Yes, guaranteed, there will be setbacks, use those to see what the market is telling you, and keep adapting and polishing your product, and business processes.
Business is the ultimate sport, it can be a scary ride, and it takes time. You may feel like you are risking everything, staring the possibility of abject failure in the face.
Hedge your bets, ideal is that you have other income streams, while you get the ‘risky business’ to take off. You will have a sense of fear, remember the words of Nelson Mandela: “I learned that courage was not the absence of fear, but the triumph over it…The brave man is not he who does not feel afraid, but he who conquers that fear.”
David J. Abbott is a director at aCatalyst Consulting. [email protected]