Every entrepreneurial venture starts with a good idea, evolves to a bunch of amazing ideas, and with any luck, ends up as a successful business.
But how do you move from that first idea to your final success?
Here are 10 steps to move your dreams into reality:
1. Define the difference.¬ You need to be clear about how your product is unlike other competitors.
Suppose your dream involves a new type of social media that lets you create online collections of visuals that people can share. Are you talking about Pinterest? Slideshare? Instagram? You need to set yourself apart. If your idea is not clearly defined, people may have a "been there, done that" view of it.
2. Look for the problem-need-want your idea solves.¬ Will it shorten the time it takes to do something? Does it make it easier to find something? Can it make something more exciting or more functional? If your product or service doesn't address an identifiable problem, need or want, why would anyone spend money on it?
3. Use clear, strong words.¬ This is not the time to say, "It's kinda like this...." Find the exact right words and avoid jargon. Instead, focus on a description that can fire the imagination. If you can't get people excited about your idea, it's not going to go anywhere beyond your head.
4. Do your homework.¬ Are you the first with this idea, or will you have competition? Research online, visit conferences in your industry, talk to experts and search for mentors. Do your due diligence now. You don't want to discover that someone else got there first after you invest valuable time and money.
5. Do your homework again.¬ Even if no one else has your idea, someone may have another plan to solve the same issue your idea addresses. Look at any tangential businesses that may usurp your potential customer. You can do this determining and analyzing your competition. Think of this to help you: What might people spend their money or time on instead of your product or service?
6. Define your customer base.¬ If you say "everyone," you're just being lazy and you're kidding yourself. Who are your product or service's early adopters? Will people choose your idea over something they already spend time and money on, or will they decide this is a brand new way to spend time and money? Which people will¬ really, really¬ want what you have to offer, and who will have to be educated or talked into it?
7. Determine your resource requirements.¬ What exactly do you need to get started? Can you build it in your basement using standard tools and materials? Does everything depend on a website that distributes the service? Can you handle the startup alone or do you need a team? And if so, a team that includes who? How much money do you need to get your idea off the ground? This is not a fast process. Expect to spend a fair amount of time on research, checking with suppliers, and talking with industry experts and specialists.
8. Build a prototype.¬ Yes, this is critical with a product, but just as important if you're offering a service. If you're creating a service, your prototype can be a process map that details customer contact points and what has to happen internally to meet customer needs. A physical prototype should be working and include a clear understanding of function, reliability and production requirements. If you can't actually build a real prototype at least have computer-aided designs with detailed specs.
9. Do the math.¬ No plan is complete without a thorough financial analysis. This includes a realistic and convincing revenue projection and accompanying costs. You should be able to detail the estimated break-even point and future profits. If you need help on this part, get it. A bush-league financial statement can kill even the greatest idea.
10. Write your plan.¬ I'm not talking about the pitch you give potential money people -- I mean your internal plan for taking your dreams all the way to the finish line. You need to have this in place for yourself, so that when you wake up tomorrow you know what to do. It will keep changing, and that's okay. In fact, it's important to maintain flexibility in your plan.
When you take the leap with your big vision, you'll either bounce, crash or fly. But one thing's for sure, you'll never find out if you don't take action.¬
How to Start a Business in 10 Days
BY¬ DAVID PORT¬
With an executive staffing venture about to open, a business loan from the in-laws gnawing at her conscience and a new baby to care for, Michelle Fish was already feeling the pressure. But what really pushed her over the edge was an unexpected communiqu√© from the IRS demanding immediate payment of a "huge sum" owed from a prior business in which she was a partner.Poof!¬ Her seed money was gone. "All the spreadsheets, all the forecasting, all the preplanning took a back seat once that bill came," recalls Fish, hearkening back to the 2003 launch of her Charlotte, N.C.-based firm, Integra Staffing.
Jeremy Ostermiller didn't need a letter to know that he had to get his Denver-based media-tech startup, Altitude Digital, into the black fast or watch his future take a dispiriting U-turn. "I knew it had to be profitable," he says. "I had put my last $500 into it, and I definitely didn't want to move back in with my parents."
A lightning-fast rise to profitability by their respective startups spared Fish and Ostermiller from going belly up. Neither has looked back since. Now a decade old, enjoying seven-figure annual revenues and flush with Fortune 500 corporate clients, Integra Staffing is the third-largest female-owned business in Charlotte, according to Fish. Meanwhile, 4-year-old Altitude Digital, which matches online content publishers with advertisers using an eBay-like bidding platform, is on target to generate $20 million in revenue this year.
Chances are, neither venture would be where it is today if not for the strategically sound groundwork laid by its founder prior to and right after launch. Trying to start a business and make it profitable in a matter of weeks isn't for the squeamish. Nor is it always advisable. But it can be done. In fact, we've condensed the process into 10 intense, highly focused days. Call it our DIY accelerator to launching a business.
Read on to learn how Fish, Ostermiller and a handful of others did it fast--and, more important, did it right.
Draw up a business plan
When launching College Hunks Hauling Junk in 2004, the first move for friends Nick Friedman and Omar Soliman was to dust off the¬ business plan¬ they'd written in college a couple of years prior. "Ultimately, it was a really valuable guide for us," Friedman says. In fact, it helped turn their $80,000 initial investment ($30,000 of which was their own money) into a powerhouse with some 500 employees and 47 U.S. franchises.
Whether written on the back of a napkin or a highly detailed 25-page document, a business plan is critical for startups seeking the fast route to profitability, asserts Ken Yancey, CEO of SCORE, a small-business mentoring organization that offers free, generic business-plan templates on its website.
Study the market
Market research¬ is vital to a startup looking to hit the ground running, according to Yancey. You want to create a snapshot of the competitive landscape you're entering: how your products or services compare to what's available, who your target customers are and what government regulations and licensing requirements to expect. The SBA's SizeUp tool provides access to meaningful demographic data, mapping potential customers, competitors and suppliers, as well as identifying possible advertising avenues.
When he was preparing to launch National Storm Shelters in 2010, company president Jeff Turner conducted market research at trade shows and held discussions with potential customers and competitors. This confirmed what his instincts told him: that he had a winning product. The Smyrna, Tenn.-based company, which designs, manufactures and installs above- and below-ground safe rooms and storm shelters, was profitable virtually since day one and now generates about $1.5 million in annual sales.
As valuable as prelaunch research and planning can be, beware of paralysis by over-analysis, especially when you lack the luxury of time, cautions Fish from Integra Staffing. "Defining your sandbox is important. But don't over-think or over-plan, and don't put a lot of stock in sales forecasts."
You're bound to have questions about strategy and practicalities leading up to launch. To get answers without ringing up an expensive consulting tab, enlist someone with the acumen and willingness to provide advice, coaching and skills to augment those you lack. A former boss provided free advice to Ostermiller initially, then became a paid advisor once Altitude Digital could afford the expense.
Build out your brand
A¬ brand identity, including a name and a professional-looking logo, can bring instant legitimacy, even before launch. For DIYers, online tools like LogoMaker offer libraries of icons, color combinations and other elements to help develop a logo fast--no design expertise required. Services such as Logoworks are available if you want the work done for you quickly and inexpensively. Once you have your logo nailed down, take your file to a quick-turnaround print service for letterhead, business cards and marketing collateral such as posters, mailers and sales sheets.
In most cases, startups need some kind of web presence to solidify their brand identity (see "The quick-start startup" on page 20). Don't forget to stake out a position on Facebook, Twitter, Pinterest, Instagram and LinkedIn. You may not use social media right now, but you want to plant your flag ASAP.
Incorporate the business
The nature of the startup dictates the extent to which it should rely on an attorney to incorporate, trademark ideas/products, formalize partnership agreements, etc. While it's best to let an attorney tackle any complex legal matters, Friedman of College Hunks Hauling Junk suggests considering some of the numerous online tools available to help you handle simple undertakings yourself. "Our first bill from an attorney to set up an LLC was $1,500. Little did we know we could have done that ourselves for $300 online," he says.
Set up a lean machine
With the clock ticking toward launch, Ostermiller needed help. He found it on Craigslist, taking on two unpaid interns (both recent college grads) whom he immediately put to work--one on sales and one on operations--with the promise to hire them full time after 90 days if things went well.
With no office yet, Ostermiller's interns worked from coffee shops while he did so from his kitchen table. Likewise, Friedman's parents' basement served as the first office for College Hunks Hauling Junk. For Fish and Integra Staffing, a modest office, spartanly furnished with used furniture, sufficed. From the outset, she says, the goal was to "minimize the monthly burn."
Another tip: Beware the glowing promises of efficiency and speed from shiny new technology and software. "Unless technology is part of your core competency, you need to be careful how much you invest in technology early on, because it can become very expensive very quickly," Friedman says. "You really need to fine-tune your model before investing a lot in technology solutions."
Bringing in profits means making sales. Ostermiller and his interns chased leads even before his company launched officially. Fish's sales efforts began with tireless networking. "I didn't have any money then, so I got my ass out of the chair and into the community," she says. "Any event in town with more than 25 people, I was there. Breakfast, lunch or dinner--it didn't matter."
To lay the marketing and sales groundwork for his startup, Friedman let people in his personal network know about his new venture. "We had a support network, a group of cheerleaders who were really inspired to help us with our idea before we launched."
Work the media
To generate buzz and sales, make¬ media relations¬ a priority. As Turner and Friedman discovered, media outreach by a business owner can pay quick and substantial dividends. "I called different TV stations the first day we went to market to tell them about [National Storm Shelters] and ended up on the 5 o'clock news," Turner says. "That was huge!"
Similarly, right around the time of its launch, College Hunks got a major boost from an article that landed in The Washington Post thanks to Friedman placing a call to a reporter there. "We shot high, and it got us on the front page of the Metro section," he says. "Our phone rang off the hook from that article."
Fake it to make it
Success is often a self-fulfilling prophecy. However modest your beginnings, however short your track record, think big and act like you belong. "We were scraping by, but we walked, talked and acted like a bigger company," Friedman says.
College Hunks launched with an 800 number, a memorable logo and a website that provided e-mail addresses for a range of company departments (pr@‚Ä¶, marketing@‚Ä¶, HR@‚Ä¶), all of which funneled back to Friedman and his partner. "It made us look like we were an established business," Friedman says. "Having that image not only gave us confidence, it established a level of credibility and confidence in the consumer's mind. I think that's what got us those large corporate accounts early on."
Fish took a different tack. She says she invested in a receptionist prior to launch, primarily to impart a sense of professionalism to callers.
Work in and on your business
For startup entrepreneurs, the fast route to profitability often means working in and on the business concurrently--at least in the first days and weeks. It's a constant battle for time between hustling up new business and taking care of new customers with outstanding service. "We were at the dump at 5 a.m., doing all the physical stuff, while also doing all the customer-facing stuff whenever we could," Friedman says.
When the day-to-day workload from the business becomes too heavy--a good sign, because it means you have customers--it's time to move tasks such as strategic planning, hiring and marketing programs to the back burner. Focus on generating cash flow first, Friedman suggests.
Throw a party
With the foundation for your business set, invite your network of contacts, vendors, friends, family, customers and prospects to a grand-opening celebration to generate buzz and goodwill within your community. Doing so solidifies your image, telling people you're open for business and you mean it.
At the party, take a breath, sip some champagne, make a speech thanking everyone who's helped and seek feedback from your guests. In short order, you've created your first focus group, one that will likely provide you with a laundry list of tweaks, ideas and improvements that you can start on tomorrow.
How to Name Your Business
Why Small Businesses Should Be Utilizing Customer-Loyalty Programs
The philosophy behind a customer loyalty program is simple: Repeat customers are rewarded and businesses increase sales. It‚Äs a basic but powerful strategy.
For instance, My Starbucks Rewards, the coffee giant's customer-retention program, significantly contributes to the company‚Äs record growth.¬ Starbucks claims that the program played a key role in its¬ 26 percent rise in profit and 11 percent jump¬ in total revenue in 2013‚Äs second quarter fiscal results. ¬
By¬ Roger L. Brooks
Best Buy also turned to customer loyalty after experiencing stagnant revenue growth year after year in its brick-and-mortar stores. To keep up with major online retailers like Amazon.com and eBay, Best Buy increased reward points from¬ 4 percent to 5 percent¬ last year to motivate customers to keep coming back. This strategy along with additional changes has helped the company‚Äs¬ stock more than doubled since early last year.
Whether the goal is to continually increase sales or to jumpstart sluggish revenue, customer-loyalty programs appear to have become a staple for many large corporations. But what about small businesses? ¬ Manta‚Äs and BIA/Kelsey‚Äs joint report¬ ‚ÄúAchieving Big Customer Loyalty in a Small Business World‚ÄĚ reveals that for early adopters who already have a customer loyalty program in placed, 64 percent of them report it‚Äs been been effective, meaning it makes more money than costs to maintain it. It‚Äs important for business owners to keep in mind that customer loyalty isn‚Ät just for big businesses ‚Äď a well-designed program can help any size business scale and reach new heights. ¬
Here‚Äs why customer loyalty programs matter to small business:
A repeat customer gives and gives.¬ Having a customer-loyalty program could help you increase repeat customers, which, in turn could boost your business‚Äs revenue. Based on the same report by Manta and BIA/Kelsey, a repeat customer spends 67 percent more on a given purchase than a new customer does. And they should be rewarded for this action, as retaining customers is less costly than acquiring new ones. By providing loyalty programs for current customers, small-business owners are not only saying thank you but are also motivating them to continue to be their brand ambassadors. They can easily spread the word about a business to their professional, personal and social networks, helping small-business owners increase their customer base even more.¬
Rise above the competition.¬ It can be difficult for a small business to compete with a large brand considering that most large brands have more locations, resources, marketing dollars and the ability to offer lower prices. However, a good customer-loyalty program is an easy way for small businesses to show their personal side and remain competitive in spaces dominated by big business.
For example, many consumers may not love the coffee at a big-brand coffee chain but do love the fact they can earn points through their purchases and save money in the long run.¬ However, it would be very simple and cost effective for a small coffee-shop owner with quality coffee to do the same.
Customer loyalty doesn't cost a fortune.¬ Customer-loyalty programs don‚Ät have to drain small businesses‚Ä budget. While some corporations spill millions of dollars into loyalty programs, small businesses don‚Ät have to follow the same tactic to achieve promising results. In today‚Äs mobile era, cost-effective digital rewards programs are just as fruitful as the ones put in place by bigger players.¬ Belly, a digital-rewards mobile app, enables small businesses‚Ä customers to earn points on their purchases by simply using their smartphones. Similar services include¬ PunchTab¬ and¬ Perkville, and subscription price starts at as low as $50 per month. Small-business owners no longer have to waste time and money printing cards and buying ink when they are using digital customer loyalty programs. More importantly, they‚Äre making it easier for their customers to keep using their service. Here‚Äs to the end of losing paper punch cards in a pile!
Customer-retention programs are not just for big brand name players. They can provide many benefits for small businesses, such as increasing sales, helping them stand out and developing a stronger relationship with their customers -- and technology is making it easier and cheaper than ever before to launch one.¬