Growing a Business From Scratch
One of the most common questions I receive each week is "how do I grow a business up from scratch? (Closely followed by the same question, but with the additional qualifier of "on a budget?")
First, let's set the record straight: the most critical key to starting and developing a successful business is the proper application of your mind. I'm not talking about positive thinking - I'm talking about having a realistic perspective, a solid skill-set, and a plan that leads to success.
For example, many would-be entrepreneurs have the idea that they can start a business with zero capital investment.
That's just not gonna happen.
Businesses take money to grow. Anyone who tells you different isn't giving you the full story.
A startup can begin on a shoe-string budget - but it does take something to get moving. Businesses eat money. It's their favorite food.
Too many entrepreneurs view their businesses as "cash cows" that should be milked and drained from day one. It's a short-sighted perspective that will typically lead to failure.
Long-term success in any business requires some initial capital investment, and ongoing investment in order to grow. Businesses (like people) never stagnate - they are either growing, or dying. A healthy business is consistently nourished with the capital it needs to grow, expand, and provide more value and service to their market.
So to start, you'll either need your money, your banks money (in the form of a loan, or if you're feeling particularly adventurous, your credit cards), or some other person's money ( a partner, relative, angel investor, etc).
If you don't have access to any of those venues, save your money, and start a business when you have a few bucks to spare. It should be money you are willing to lose - as you very well might lose it.
No risk - no reward. There is a reason that people who invest in start-ups are called "venture capitalists". If you want a guarantee, go work for the post office. Or buy a toaster.
After you have access to capital - the cheapest way to get your business moving is with a model that leverages direct response marketing. If you heed the wisdom of adopting such a model, then the following 5 step plan will assist you in getting your business moving.
Step 1 - Build Your Skill-set
Are you starting a business in a niche you have zero experience with? Are you in an industry that is completely unfamiliar to you?
If so - you have a lot of learning to do! Tens of thousands of people throw their hat in the entrepreneurial ring every year, hoping to strike gold with their particular product, service, or opportunity. Most fail. If you are to be different, you will need more than the willingness to gamble your money - you will need a skill-set.
If you know what you are doing, Godspeed - you're on track. If not, then you need to learn, and learn quickly. You should devour every piece of literature in your industry. You should passionately consume every bit of data that relates to your market, your competitors, and your product.
Seriously - you need to know everything! You must become a student of your market. Ever seen those guys that head out into the jungle to study monkeys? They live in the trees, eat bananas, skip showers, and do all the crazy stuff that monkeys do. You need to be THAT guy when you jump into venture.
Many times, people who don't have skill-sets either pay for it (with education from others), or work with a company that is in their niche (though direct employment, or in an affiliate relationship). Either pathway is viable - you just need to be honest with yourself in evaluating your skill-set. If it's lacking, invest in yourself, and put yourself in a position to learn the skills you need.
Step 2 - Find a Market
Many entrepreneurs start with a product, and then try to find a market to sell it to. This can work out - but for every entrepreneur that goes this route and succeeds, a thousand will fail. In other words, the odds aren't with this model.
Starting with a market, and then finding a product to give that market is a much, much more effective route to take. Start with your market - who do you want to help? How will you be of service? What types of people do you want to assist, and how do they need and want assistance?
Companies and entrepreneurs that get too attached to their products end up dying. As an example, look over the companies in existence today that are over 30 years old. With rare exception, these companies are providing different products and services than they started with.
For example - with the advent of the automobile, the horse and buggy industry died. They didn't have to - they could just as easily have moved into the automobile industry as the next entrepreneur. But they all were attached to the idea that they had a product (horses and buggy's) and refused to evolve. And they died.
Look at electronics manufacturers - just a short decade ago, VHS tapes were and cassette tapes were still in high demand. Now, modern electronics don't even have a way to play these ancient instruments. The successful companies evolved, and updated their product line - the rest died. Products come, products go. But markets are here to stay.
Start with your market - who are you going to help, and what do they want?
Step 3 - Find a Message
This is where you begin testing messages to that market. It's where you find the message that resonates with the people you are trying to help, and gets them to respond.
Response is key - people can enjoy your messages (like the Budweiser frogs) and not respond. It does you no good to have a bunch of people laughing at your hilarious commercials, and not buying anything that you have to offer.
Once you have a market, you need to have a message that solves a problem your market is experiencing. If you don't know what it is - ask them. Develop a three-question survey, and either call your market (on the phone - with a lead list), or have it on a website (and run targeted traffic with Google or the other search engines) and find out what your markets big problems are.
Then, develop a message that promises to resolve those problems.
Step 4 - Find a Product
Notice we don't even worry about the product (or service) until this step in the process. Now that you have a market -and they're responding to your message - then it's time to start solving problems.
You should have an idea of what your market wants based on your survey that you conducted in the prior step. If not, then start with an information-based product or service. Everyone loves information - it feel productive consuming it, even if it is never applied. For information products - start by looking through the inventory provided at Click Bank. If you're more inclined towards physical products, check the National Mail Order's Association Product inventory.
If you truly have a better mousetrap that you invented, then you're set. Just make sure that your market wants it. If they ignore it, don't feel bad. Markets are fickle. Find a solution they want NOW...and give it to them.
Step 5 - Scale & Pace
Typically, businesses grow like young children - they get tall and thin, and then gain weight, then tall, then weight. Businesses get customers, then develop support staff and hire personnel to help service them. It's a see-saw effect where you are constantly either expanding your clientele, or expanding your support staff for those clientele. You should have a plan that takes this into account.
You should also map out realistic objectives in your business. Emphasis on the word "realistic" - going from zero to ten thousand customers in a month (when you have never don that before) is unrealistic. This doesn't mean you don't push yourself - take what you are doing today, and put together a plan that allows 10% growth per month. That will keep you plenty busy, and (depending on the sector you are in) could even be undershooting it.
Look at your competition - what are they doing? How are they growing? How are they NOT servicing your market? Who in the market are they ignoring? How can you use this to your advantage? Walking into a market and providing a new level of problem-solving will ensure consistent growth. Just pace yourself - focus on the next step, and the next key opportunity that you see in front of you.
Failing to plan is planning to fail. Align yourself with models - people who have gone before you and are doing what you want to do. Learn from them, soak up every bit of knowledge you can. Invest the time up-front in making your venture a success. You treat it like a real business from the get-go, the odds are it will pay you like one. You treat it like a hobby, it'll pay you like one.