How do you start a business from scratch? With this question, Kailene, this week’s guest on SUCCESS Line, came on the show and I suspect a lot of you have asked this question.
Starting a business is a daunting undertaking, especially if you don’t have investors or $ 1 million to fund it. But if my wife and business partner and I provide a clue, it is possible. We built six companies from the ground up, made mistakes, learned lessons and gathered a wealth of tips and tricks in the process. If, like Kailene, you’re a bootstrapping entrepreneur looking to start your own business, check out my top three takeaways that all young entrepreneurs should know.
1. Don’t ask, ‘What should I do?’ Ask, ‘Whom shall I serve?’
This is the # 1 mistake new business owners make. You focus on yourself and ask, “What should I do?” At Brand Builders Group, we encourage our customers to ask, “Whom shall I serve?” When you first come up with “who”, it automatically creates both purpose and clarity. The “who” informs, instructs and designs your entire business model for you.
Once you’ve answered who you serve, the next questions (and their answers) will appear:
- Whom do I serve?
- What do you need?
- What can I give you?
- How much time and money will it take to give them this thing?
All of this comes from this simple question: Whom shall I serve?
2. You need more customers than revenue.
Don’t get me wrong – I’m not against income or money making. But you need customers first. Your first customers offer a training ground. They give you the opportunity to practice and try out your service, your product or your idea.
Most importantly, your first customers (hopefully) provide testimonials. My wife AJ recently led a study at Brand Builders Group looking at current trends in personal branding. 62% of Americans said the most important factor in their decision to pay for a product or service was whether the brand or company had testimonials about their work. Even if you have to offer free services to your first few customers, it was worth it when they are willing and able to talk about the quality of your work.
The beginnings of any business are just practice; You need to have time to build systems, processes, content, and trust. Focus on finding customers and delivering a great experience first, and then, over time, the revenue will come.
3. You need referrals even more than you need customers.
While it’s important to find customers, it’s even more important to find referrals. For any entrepreneur with no investors or millions of dollars, these recommendations are likely to come from your friends and family. However, in order to receive these referrals, it is important that you don’t overwhelm your friends and family with endless sales pitches.
Often times, when you sell to your friends and family, you burn out tolerance within those relationships. It becomes almost awkward for you to approach them, “Here they go again and sell us your product.” It will be much more effective (and less damaging to your relationship) to ask your friends and family for recommendations first.
Make a list with every person you trust. Then call these people and explain what you are doing. Say, “Hey, do you mind if I take a minute to let you know about this new business I’ve started?” If they say yes, tell them what you are doing and ask if they would be comfortable introducing you to others. As a bootstrapping entrepreneur, referrals are so much more valuable to you than the individual sale a friend or family member might make.