Posted by Marcel Sim in Entrepreneurship
Article Contributed by Lori Wagoner
How expensive is it to start a business?
Pop that question up and you’ll get a ton of answers. Most of these answers are either a reflection of what entrepreneurs already did or what they believe is the right thing to do.
However, not everyone starts off right. Some businesses make do with whatever they do and most others will fail. If you are reading this, it’s clear that you want to start or run your business to profit from it. For that to happen, you’ll need to overhaul your entrepreneurial mindset.
Guts and intent come first. Money is secondary.
Peep into the world of business and you’d think that it’s the money that matters. The need for capital, the run for VC money, the applications for business loans, the thirst to raise cash from any means possible, and the sacrifices some entrepreneurs make to find monetary support to run their business.
Surprisingly, it’s not necessary.
For just as many accounts of these “cash runs” that entrepreneurs do, there are many enterprising businesses that start for less than $100, according to Chris Guillebeau who wrote the book The $100 Startup: Fire Your Boss, Do What You Love, and Work Better to Live More. Meanwhile, the debate whether you should stake your own money or raise cash will rage on.
The truth is that you need guts, confidence in yourself, the ability to sell, a tendency to take action no matter what, and a strong intent to get started in business.
Tip: Raise a business first; money follows. You’ll find a way to make it all happen.
Get a website up on the cheap
Don’t ever believe it when you read “You don’t even need a website” anywhere.
Doing business without a website is like going to a formal gathering dressed on the top (and with a tie) but without your shoes on – yes, it’s just as embarrassing when you sit across a client and realize that you don’t have a proper functioning website.
Today, it doesn’t take much to put up a website. This is the age of Instant Domain Search – register a name you like (finding one that’s available is a bit harder, though). Picking the right web host is one leap you shouldn’t make before looking – compare hosting provider options at Who Is Hosting This or CNET and go for one you think is best for you.
Unless you have an online retail model, it’s safe to choose WordPress as your CMS (you can’t go wrong with something more than 55% of websites in the world run) and buy a theme you like from ThemeForest.net. Get your logo designed, choose your brand colors, put a site content strategy in place, and start adding stuff. Now that your site is ready for clients, off you go selling.
Tip: For a website today, there are no excuses. Start with an inexpensive, but functional and beautifully website. You can tweak, redesign, and change it later.
Marketing collateral, branding, infrastructure and equipment
Jason Fried, in his book Rework, states,
“In most cases, getting a fancy office is more for the entrepreneurial ego than for necessity.”
You can’t help but agree. What you certainly don’t need, especially when you are starting out, is a swanky office in an expensive location (unless you are in retail). You don’t need to hire employees right away, and you’ll certainly not have too many bills to pay.
Depending on where you live, you might have some basic setup expenditure like approvals and licenses as these are necessary. Apart from the basics, no money every goes out until you make enough.
Further, the best marketing tool you have at your disposal is you. Master the art of selling and you’ll find that you’ll never need to make brochures, flex banners, and expense-heavy advertisements when you are in beginning stages of your business.
Tip: Bootstrap like your life depends on it. If you have to spend, do it when you must or when you make so much money that it won’t matter then.
I won’t care what happens. I got nothing to lose.
Since all you do is to run with an idea and not spend too much, you get into the “I don’t care” mindset – and that’s pure power. Dan Schawbel, a contributor for Forbes.com, interviewed Ryan Blair, the CEO and founder of Visalus Sciences and author of Nothing to Lose, Everything to Gain.
Ryan reveals that “adaptation is the key to survival.” He says, “To be an entrepreneur, you got to have fighting instincts,” and also adds that he “hates writing business plans.” In his opinion, “the business plan is the one built from a business that’s already up and running.”
Think about it: you won’t even hesitate when you have to pivot, you won’t be debt-ridden when your business fails, if ever. You won’t care if the world doesn’t appreciate your idea: if it works, you are a genius. If it doesn’t, you are one of those smart opportunists who dropped a business and started another one.
You exude power and confidence. You come in from the trenches. You radiate supreme confidence when you sit across customers and face them. When you are in this mode while doing business, you become invincible, unstoppable, and a rolling juggernaut that gathers business lessons along the way.
Go with “Worth Pricing”
It’s time to disrupt and justify.
Most of the markets you might enter into end up smothering in price wars and baseless debasement of product value (include services too). In possibly every market niche, you’ll find competition slugging price arrows to snatch customers away from you.
Traditional business literature teaches you to price according to cost of goods with margins slapped on it. You’d also price based on intrinsic value of products, or based on your time for your services.
Try something new: price according to what you are worth, or what the product is really worth, or what your services can do for your clients.
Here’s the biggest marketing secret: you’ll find customers at every price point. All customers, by the way, are demanding. So, why price low?
If you find yourself nodding in agreement because you agree, it’s good. If you realize that you did exactly that, you are on the right track. If you don’t agree, do let me know why in the comments!
Article Contributed by Lori Wagoner