5 Things You Should Know Before Starting Your Own Business
At age 16, I started my first business. I was among the throngs of a community that gathered on muggy summer nights to cheer on the home team at our high school football games. Cheering means one thing: yelling. And yelling means people will have tired, sore, dry throats.
For the penny-pinchers unwilling to spend concession stand prices for their carbonated relief, the school had conveniently provided a pop machine in the stadium that would deliver an ice-cold can of heaven for 50 cents.
This pop machine had a special quirk that endeared it to my young entrepreneurial spirit: it stubbornly required exact change. A lot has changed since 1998, but one thing hasn’t: nobody carries exact change. I set up shop beside the glowing, humming machine and offered people exactly what they needed: exact change. For a small fee, I’d sell them two quarters. My customers would gladly give me one dollar and I’d kindly give them two quarters in return, easily turning a $10 profit each home game.
It wasn’t much of a payday, granted, but I learned five invaluable lessons that helped me build the two successful businesses I’m running today:
1. Be necessary
If I’d sold can koozies at the game, I have a hunch I would have had far less success. I’ve learned there are two types of business ideas: “it would be nice if” ideas and “make necessary things better” ideas.
Ask yourself these three questions to figure out which kind of idea you have:
- Does this idea help someone do a necessary action more easily?
- Does this idea save someone time or money?
- Does this idea change the way people behave, operate or think?
If you can’t answer yes to at least one of these questions, you have an “it would be nice if” idea. Proceed with caution.
2. Do something you know something about
Over the years, I’ve had hundreds of seemingly great ideas for a money-making business. Some of those ideas have since been discovered and turned into great profit by someone else. I should be bitter, right? I’m not.
Here’s why: I wasn’t the right person to lead those companies.
Your background, experience and education must align with the business you’re creating. Your business must be a part of you. I was able to raise the necessary capital for my startup because I spent seven years preparing myself for those presentations. Before building a digital marketing software product, I built a digital marketing agency. That means I spent seven years preparing myself to be the one person capable of executing my new business model.
Everyone has ideas. Successful people aren’t measured by how many ideas they have, but by their ability to execute a chosen few. (Click here to Tweet this thought.)
3. Resolve is your greatest asset
Despite anything you’ve heard or seen on TV, starting your own business isn’t very glamorous. It’s a grind that involves obsessive dedication and unrelenting effort and resolve.
Every startup will encounter obstacles that will threaten to shut it down. Every new business will face seemingly insurmountable odds.Getting your idea off the ground will require your weekdays, weeknights and weekends. There’s no getting around that.
If you’re launching out to start your own business, you must be prepared to fight. Will you be willing to stick to the plan even if it seems like it’s failing? Are you willing to make the sacrifices today that might pan out in five or 10 years?
4. Side hustles make great incubators
When I started my first business (which failed), I had enough cash in the bank to support myself for six months. Young, and without the wisdom of the side hustle approach, I promptly quit my full-time job and dove into the shallow end of the pool head first.
Two years later, I was renting a bedroom in a friend’s house for $200 a month, driving a downgraded car, eating off of dollar menus and living on an income that brought in less than $1,000 a month.
I could have literally saved years of my life if I started growing my business while employed somewhere else. If you’re thinking of starting a new business, consider keeping your current job. You’ll keep your income and benefits, which will help you to make more level-headed decisions about your startup and its future.
5. Ideas are cheap. Execution is not.
It’s unbelievable how the excitement of an idea can cloud our senses of judgment. It happened to me. It’s happened to my friends.
No matter how great the idea, the numbers must add up in order for you to be successful. Work through your overhead costs and schematics. Factor in your salary and the costs of production. Know up front how many sales you’ll need to consistently make (and maintain) in order to turn a profit. You’re starting a business, after all, not a hobby.
The old adage holds true: You must do the math.
One final word
There’s one final lesson the soda machine taught me during those humid summer nights: most people are addicted to convenience. That’s what helped me get away with charging a dollar for two quarters. Sure, I was saving people money because my product was cheaper than the concession stand’s — but I was also saving them time.
A lot of people talk about starting a business and daydream about being their own boss. Very few people actually take the leap. And a ridiculously small number will actually see their dreams come to life.
That’s because building your own business isn’t convenient.
You’ll be misunderstood and frustrated along the way. While your friends are busy buying nice cars and going away on fancy vacations, you’ll be pinching pennies to pay the bills and staying up late to answer emails. There are times when you’ll feel isolated and a bit foolish, and you’ll be close to giving up and walking away from it all.
I’m here to tell you that it’s worth every second.
Justin Spring is the cofounder of two successful startups: Adept Digital Marketing, a sought-after consultancy for online marketing strategies, and BringShare, an online tool to help marketing agencies simply track and report on their clients’ marketing efforts.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
Brazen powers real-time, online events for leading organizations around the world. Our lifestyle and career blog, Brazen Life, offers fun and edgy ideas for ambitious professionals navigating the changing world of work.