Starting a Business

A recent course which was titled “Starting a Business” and ended being better named “Writing a Business Plan” got me thinking about what kind of advice I would give to someone just starting out. I thought back to a few businesses which started out as a single person, and have grown, and realized that there are two kinds of people who start businesses, and the advice to each is different.

First Time in Business

If you are in business for the very first time, then what you need to do is go out and find some customers. No fancy business plan, no expensive incorporation, just a phone number or email address at which you can be reached. Reach out to your network, announce that you’re in business (explain what type of business you’re looking for), and ask people to send you leads.

What you are trying to do is get some momentum, and the simplest way to do that in the early days of a business is to find one person who will pay for what it is you have to offer.

One friend started his business with $500 in his pocket – he unpacked the coffee machine, pulled out a list of phone numbers for every person he knew, and started calling each to let them know he was in business. A few years later, he has several people working for him on a variety of projects, and has some idea about where he’s taking his business. But the start was informal – just a bunch of phone calls.

What it comes down to is networking to find one client. Once you have that one client, you can worry about determining where your business should go – taking legal steps to protect yourself, setting yourself up to be as tax friendly as possible, etc. The first step for someone in business for the first time is always networking.

Been There Before

If you are starting your second or later business, then the steps are different. Finding your first customer isn’t as important as figuring out what this business will do. You have to reflect on your previous business to determine, from a business perspective, how you can do better. In that case, a formal business plan might be wise – you may have the time to do this, and can afford to spend valuable time researching your target market, the industry, raising capital, etc.

The steps aren’t as clear here either – what was the end of your previous business that pushed you to start a new business? Would you call your previous venture a success? How would you apply the lessons learned there to your next venture?

These questions, and other related questions, need to be answered in order to determine your best approach to starting anew.

Summary

If it’s your first time in business, then don’t over-think it – just go out and find someone who will pay you to do the kind of work you want to be doing. If it’s not your first time, then reflect on your previous endeavors and figure out how to apply the lessons learned there to your next venture.