- Get an idea
- Find the money
- Set up shop
- Spread the word
- Marketing Bootcamp
“A journey of a thousand miles begins with a single step,” said Chinese philosopher Lao Tzu. Unfortunately, the saying has been appropriated by so many self-help gurus and motivational posters that it doesn’t have much impact these days.
But it’s worth pausing a moment to ponder the statement, because it actually holds a lot of truth. Every great business you can think of started with that first step.
Sadly, though, not enough people take that first step. Starting a business is difficult and daunting, and more problematically, has no firm deadline. Very few people have someone looking over their shoulder forcing them to get a business started. So that great idea is never acted on. Starting their own business remains something they’ll do ‘one day’.
The best way to actually take that first step is not to think of launching a business as one (massive) project, but to instead break it down into more manageable goals. We’ve compiled a four-step plan to get your business off the ground. It starts, as you might expect, with finding an idea.
1. Get an idea
Finding a great idea can be both the easiest and the hardest part of launching your own business. It’s easy because you don’t need to spend any money on it. And when you strike on that amazing idea, it can be tremendously fun and rewarding. Also, thanks to the Internet, there’s no shortage of ideas. Inspiration is everywhere.
But finding the right idea can also be hard. There are so many options that it can all feel a bit overwhelming. Moreover, no idea is a guaranteed success, so you can never be quite sure if your ‘amazing’ idea is actually as good as you think it is. Doubt will almost always be gnawing at you.
When looking for an idea, many people would recommend ‘following your passion’. This can be good advice, but it doesn’t work for everyone. You might love to cook, but if you’re not bringing something new and innovative to the industry, your restaurant probably won’t make it.
Passion is great, but it’s not enough on its own. To really be successful, you need to solve a burning problem, and since most problems are already being solved these days, it often comes down to solving it more efficiently than someone else.
If you have ideas, you have the main asset you need, and there isn’t any limit to what you can do with your business and your life. Ideas are any man’s greatest asset. – Harvey S. Firestone
2 Find the money
Thanks to all those over-funded unicorns in Silicon Valley, the global start-up culture has become obsessed with VC and angel funding. The reality, however, is that your business probably won’t get millions in funding.
Only a very, very small percentage of start-ups will ever see external investment. But that might not necessarily be a bad thing. As the quote by venture capitalist Fred Wilson suggests, loads of funding doesn’t guarantee success. In fact, it might actually be a bad thing.
Being able to throw money at every problem creates the wrong culture in a business. You want to get the fundamentals right and start showing positive cash flow as quickly as possible. You don’t want to scale quickly because you’ve got the money to do it, only to find out later that your business model doesn’t actually make sense.
The amount of money start-ups raise in their seed and series A rounds is inversely correlated with success. – Fred Wilson, Union Square Ventures
3 Set up shop
Once you’ve launched a start-up, there are only two things you really need to do in the short-term: Maximise your income and limit your expenses. That means signing customers and selling goods, without burning through a ton of cash to do it.
The good news is that this is easier to do than ever. There are a lot of solutions out there — both digital and real-world — that can help you launch your business successfully. You just need to fight the temptation to lease swanky offices and buy expensive equipment, and commit to the cost-efficient way of doing things.
Also, you need to get the fundamentals right — from the very first day that you operate. You need to always be aware of the financial situation of your business. Neglect this early on, and you’ll pay the price down the line.
Never take your eyes off the cash flow because it’s the life blood of business. – Richard Branson
4 Spread the word
There are only two ways to increase revenue: Increase the price of what you’re selling, or sell to more people. So, unless you want to try and up your prices (which is very risky), you need to increase your customer base. You do this through marketing.
Thankfully, marketing is easier than ever. Thanks to technology you can now market your business without having to spend money on expensive television or print campaigns. You can make a big impact, but you need to be smart about it. Your marketing budget can go a long way, provided you know how to utilise it.
This starts with knowing your customer. If you don’t truly understand your customer, you will struggle to make a success of your business. In an era when consumers are spoilt for choice, the companies that truly thrive are the ones that know their customers and have empathy for them.
Salesmanship is limitless. Our very living is selling. We are all sales people. – JC Penney
Know thy customer
Successful marketing starts with understanding your customer. If you don’t understand your customer, you don’t have much of a business.
“The number one reason why start-ups go under is a failure to understand the market,” says Dr Alex Antonides of Enterprises University of Pretoria. “For this reason, any and every business enterprise should start with customer discovery and development.”
Before you even think of selling anything, you need to discover if there’s a market for what you are offering. This means going out and speaking to potential customers.
In lean start-up parlance, this is called customer discovery, and it should form the foundation of any business venture.
If your business is already up and running, you have hopefully done the hard work of speaking to strangers and finding out if they’ll be willing to pay money for your product or service. However, customer discovery isn’t something that can be checked off a list — it is an ongoing exercise.
“I tell my students to go out to a mall and look at the things that people are spending money on,” says Antonides. “You have to know and understand what consumers want.”
Only once you know what consumers want can you market your offering successfully. Empathy is a word that’s often used in Silicon Valley, but it’s not as popular here. That’s a shame, since the companies that achieve success in a highly competitive environment are the ones that have real empathy for the consumer. This means really engaging with customers about the problems they face, and the solutions they require.
It’s not about the ‘fast sell’. It’s about spending time (and money) to get to know the customer. It’s about creating a holistic picture of your potential customer, which includes even the things that are seemingly irrelevant to your industry. Once you’ve done this, you can create a successful marketing strategy.
5 Marketing bootcamp
Search for ‘marketing bootcamp’ on www.entrepreneur.com. You’ll find a wonderful collection of articles and other resources, which have been created in conjunction with the UPS Store. Regardless of your marketing question, you’ll find an answer here.
It’s all about content
Google and Facebook ads can offer a great ROI, but you still need to spend quite a bit of money in order to make it work. If you spend a small amount of money, very few people are going to see your digital ads, and since conversion rates are generally low, you probably won’t enjoy a lot of success.
When it comes to digital advertising, the old adage of ‘you need to spend money to make money’ is very true. There’s a certain tipping point at which digital ads start to make sense. Many small businesses spend thousands of rands on Google and Facebook ads every month. It’s worth it, though, because the business generated from new customers is worth more than the cost of the ads. But what if your cash flow is too tight to allow a huge marketing spend?
“Building a community as a brand that has little to no marketing budget isn’t easy — that’s why it is imperative to look at your content approach, especially on Facebook, as a storytelling opportunity. Who are the heroes and villains within your market, and how can you position your brand differently from its competitors?” says Mike Sharman of Retroviral Digital Communications.
“Developing remarkable content is the key to providing a launchpad or a platform from which to build fans. Facebook also has an algorithm that serves your content to a limited number of fans first and — based on the success of the engagement of this content — then distributes it to a wider audience,” says Sharman.
As ex-Google employee and angel investor Paul Buchheit has said: “Start out by making 100 users really happy, rather than a lot more users only a little happy.”
Generating content can seem like a small way to market your business, but if that content is good and it makes a handful of prospective customers very happy, you’ll be surprised by the effect it can have. Great content says a lot about your business.
Of course, you’ll probably need to spend some money on marketing, but by experimenting a bit, you can make every cent work for you.
“If you are a brand/business page, you will need to spend on paid media, either via an agency or with your credit card. You know your product or service better than anyone else, so experiment by putting some money behind your posts to target first niche, and then broader audiences. Facebook spend shows what your expected reach and engagement will be as you scale your spend, and spread it out over several days,” says Sharman.
By paying attention to your campaign, you can stretch your budget surprisingly far. But it’s not a sit-back-and-watch kind of activity. You need to tweak and experiment constantly, until you find a strategy that really works.