Question: I live on Cape Cod and want to start my own business. I have very little capital. What ideas can you share that can help me get to my personal goal of business ownership?
Answer: There are many ways you can become an entrepreneur without having a bucket of cash for investment. You might consider a “lean startup” using the crawl, walk, then run approach.
Here are some ideas from Edwin Dearborn http://www.EdwinDearborn.com around which you can build a business using a lean strategy:
Build your business on what you know or what you are drawn to. If you are a good baker and make outstanding cheesecakes, then start small by making them in your kitchen, selling them at fairs and farm markets. When you have generated enough revenue, you can then think about a commercial kitchen with the appropriate permits and licenses.
Create an authentic and compelling branding story of why you are in this business. The brand is the image or perception you have in the mind of buyers that render you as unique or sufficiently different to drive them to buy from you.
Have a written business and marketing plan that you follow. Winston Churchill said, “He who fails to plan, plans to fail.” A business plan using the Business Model Canvas https://canvanizer.com/how-to-use/business-model-canvas-vs-lean-canvas is a great way to create a plan when no outside funding is being sought.
Write down what you want to accomplish for that day. Refer to it and hold yourself accountable to making those goals occur. The very first task of any business operation is to create short and longer term objectives and at the same time create metrics to determine if you accomplished them. For example: Generate two new customers per week. Add 20% to the average ticket value over the next 60 days. Objectives that are specific focused, quantifiable and measurable.
Tell everyone you know what you’re doing. Often. Word of mouth (WOM) is the best, most effective and least costly marketing. If you are becoming a landscaper, roofer, handyman, finish carpenter or carpet cleaner, you need to have a strategy for creating WOM brand awareness.
Avoid unnecessary expenses. Live lean. Only invest in what you need to commence business and add to that investment as you build your revenue. If you don’t need an office at the beginning, work out of your house. If you can work out of a rented space, avoid buying brick and mortar. Crawl first, then walk, then you can run.
Don’t get buried in credit card debt or loans. Get used to paying off each month’s bill as they come due. If you are in a seasonal business where cash flow is slow in the offseason, plan for cash conservation during the active months, so you don’t have to rely so much on your credit cards. Use them for emergencies during the slower months.
Make sure your receivables policy won’t sink you. Up front decide on your terms of payment. Do you want payment upon delivery of service? If you are repairing lawn mowers, do you want to receive payment upon pick up of the mower or invoice with 30 days payment? If the project is large, do you want a deposit upon contract signing so you can pay for materials with the customer’s funds? If you don’t know the customer is offering, credit terms can be dangerous and impact your cash flow. Have a receivable policy and stick to it.
Establish a budget and follow it. After you create a business plan, create a line-item budget and review it regularly to assure that you are controlling your expenses and that revenue is building according to plan. If not, adjust the budget to reflect the reality of your business.
Take advantage of free advertising and marketing, such as blogging, social media, public speaking and networking. All promotion doesn’t have to be paid promotion, like ads, direct mail or trade show participation. Use all the FREE promotion you can, so you build brand awareness with minimal out-of-pocket expenses.
Get ready to hustle. Service and help those you meet with enthusiasm, purpose, and commitment. When customers see you enthusiastic, they feel good about their choice of you to perform the service or delivery of a product. If you can give each customer one new idea about using your service every time you engage them, they will see the real benefit of doing business with you.
Listen more, talk less. People will determine whether or not to do business with you on how you communicate with them more than any other factor.
Take time to enhance and educate yourself. Make it a daily habit to become smarter or better in some way. Personal development always pays off. You need to be a lifelong learner. Carve out some time every day to learn something new about your industry, your customers or marketing techniques. The more knowledgeable you are, the more valuable you are to your customer base.
Persistence is more valuable than education. Stay the course and remain focused. It is easy to veer off course and chase opportunities that are not in your mainstream and get you into trouble as you launch your business.
Ask for referrals on a continuous basis. WOM promotion is key to building a business. Getting referrals from satisfied customers, convince others to do business with you.
Act, measure, review, adjust, act again. Review your actions on a monthly basis. Discover what you are doing right and strengthen those actions. Moreover, look at what is not working for you and change those immediately.