It is easier than it’s ever been to start your own business. Whether you want to go into digital marketing, lifestyle and wellness coaching, or blockchain development, building a business no longer requires a traditional MBA. Today, you only need a website and a basic knowledge of how to run a business to launch yours right away. In this article we’ll outline some of the classic milestones and questions along the business journey.
How Do You Choose a Service?
First off, you’ll want to know what product or service to create your business around. Spend some time figuring out what excites you. It’s wise to choose something that isn’t too hyped up or built around a passing trend, so that you don’t waste your energy and time. Then assess your idea’s market viability by determining your product/market fit. Ask yourself what is your value proposition, customer segment, and marketing channel. Then figure out how much demand there is for a product like yours, and how well your product satisfied that demand.
Blue Ocean or Red Ocean?
When analyzing your market, you have two options for business approaches: red ocean or blue ocean. Red oceans are the existing market space, or all the industries that currently occupy the market. In this scenario, you are throwing your business into the ring along with other competitors who are offering similar products. With a blue ocean strategy, by contrast, you are creating an entirely new market with your product. You have few competitors because no one has entered your market yet. In effect, it’s the “unknown market space.” A blue ocean strategy is often considered a more profitable strategy if you can manage to find a unique product that creates new demand around it.
Creating a Minimum Viable Product
After you’ve decided which product or service you’d like to offer and chosen your strategy, you can create a minimum viable product (MVP), which is the version of the product with just enough features to satisfy early customers and provide feedback for future product development. An MVP might even be a website where potential clients can purchase products or services. Testing your MVP requires trying it out on your first target clients and receiving your first payment. You can then adjust your business model, ask for feedback from mentors, and start talking to investors.
How Do You Finance Your Business?
You may decide to bootstrap your business if you’re just getting started and don’t feel ready to reach out to investors. You can easily create your own website and social media pages. Bootstrapping means you’re putting your personal savings into your business without help from external help or working capital. You may do this in the beginning before you’re ready to seek external funding. Once you have your business model and MVP sorted out, you can apply for public grants or private investment. If you get investors on board, you’ll want to decide whether to allow them to take equity in your company. The downside to equity is that you’re committed to sharing your profits with investors even if you become the next unicorn startup founder. You’ll want to create a thorough business plan and seek advice from a finance consultant before making big decisions like this.
Passing the MOM Test
As you perfect your business model and test your MVP, you’ll start learning how much clients are willing to pay for your service. One of the best indicators that you’ve landed on the right model is that your clients are “just barely” willing to pay for the service. In other words, they aren’t completely comfortable with the price but they still buy the service. That means you’re charging what you’re worth. In the early stages of your business, the only people who buy from your may be FFFs (“Friends, Family, and Fools,” as the saying goes). But once your clients pass the MOM Test, paying a little more than they’d like, you’ll know you’re on the right track.
How Do You Know You’re Ready?
The short answer is, you won’t. Most successful business owners will tell you to launch your business before you’re ready. There’s no way to fully prepare for the journey, not even in business school. Start your business today and learn as you go. The most important mindset for a business owner to have is an entrepreneurial one, which means you need to make “fail fast” part of your daily mantra. That’s not to say you don’t want to succeed—of course, you do. What it means is that you understand that you will fail, sometimes, whether it’s choosing the wrong business model or selling to the wrong people, and that it’s a natural part of the business journey. You also understand that learning from your mistakes as quickly as possible is the fastest route to success, so taking many risks and experimenting early on is more prudent than plodding alongside your safest ideas. Cultivating this mindset will prepare you for running a business even more than memorizing each chapter of your business school textbook.
Starting a business is exciting, and you should rest assured you’ll have all the resources and support you need as long as you keep educating yourself and seeking advice from people who’ve been down the road you’re on. You may consider taking a few short courses on business management or entrepreneurship to get started. Another important part of the journey is connecting with mentors who can give you sage advice and prepare you for the obstacles ahead. Start attending business networking events in your area or reach out to an entrepreneur on LinkedIn who has experience in your industry. Eventually you’ll feel comfortable enough to be a little more daring, because you’ll know you’ve got a safe place to land each time you fall (which, if you’re doing things right, you will—multiple times). Support from others is invaluable even if you’re a solo entrepreneur, so get out there and start building your network alongside your business.