What does a new business owner do first?

Recently I received an email from a reader who said my blog made them feel like they had come in during the middle of a movie.

Why? Because they’re at the startup stage in their business, while many of my posts focus on existing businesses.

Fair enough. Let’s talk about startups.

The overwhelming load at startup can freeze you in your tracks. You’re just starting to learn how to market (usually). You may need to know where to find less-expensive supplies, how to introduce your product to customers and how to price what you make/do.

Best of all, you’re trying to figure out how to do all of this on a limited budget without feeling like your investment is as fickle as a bet at the horse races.

It’s a tall climb. It feels like there’s so much you’re supposed to do before you start and the list gets longer on opening day.

What Nike would say

The key is to start.

People freeze in pre-launch because they’re worried about everything being perfect…which frequently breaks your focus on starting. You may have heard this described as “perfect is the enemy of good” (or “of done”).

Don’t you need business cards first? Or a fancy color brochure? Or a sign? No, no and maybe. Where a home-based manufacturing or service business is concerned, the answers are likely no, no and no.

Permits: You need to take care of whatever permits, licensing and tax registration requirements exist in your state/community/neighborhood. Not optional.

Business cards, stationery, brochures, etc: I still don’t have a business card. I just haven’t gotten around to it. In my business, people who meet me almost always know or have heard of me – and that’s intentional. I make it super easy to find and contact me, yet I haven’t met many of my clients face to face. If you sell what you make on the internet, you might not meet your customers except at a trade show (trade show prep is another post). You may absolutely need a business card – but it shouldn’t stop you from opening the doors.

Is it an attractive model?

You might be just starting to figure out how to price your products and services. Typically, people in a new business start as low as possible, thinking that’s their “in”. Price should never be your only competitive edge. One edge, sure. Only edge? Never.

Setting a price depends on your business model. If your business model doesn’t makes sense financially on day one, it might never make sense.

Start by determining your fixed and variable costs. Fixed means “expenses incurred even if you don’t sell a thing”. Variable means “expenses that change as sales volume changes”. Of course, you’ll want to have some money left for your salary, taxes, utilities, marketing, support/service, and profit margin.

This requires knowing your numbers. Knowing what every supply costs, knowing how much time processes take so that you know your labor costs, whether you or someone else is performing that labor. Use a yellow pad, spreadsheet, whatever. Don’t get tied up by the mechanism. Start.

Note: Profit is not salary. More on that another day.

Don’t forget the locals

Everyone looks on the net for quality supplies at low prices, but don’t forget the locals. You might be surprised to find that you don’t need to pay always-rising shipping costs (because “free shipping” isn’t free) to buy beeswax from three states over because there’s a beekeeper in your community who can deliver it *today*.

You might have to buy online at first, but never stop talking to customers and friends about your supply needs. Find online communities of people who make similar products or serve similar customers. For handmade goods, the communities at Etsy.com are good and there are others out there in every niche. People in these communities are surprisingly helpful and will tell you things a website/catalog wouldn’t ever mention.

Feed your mind

No matter how insane my schedule, my daily ToDo list includes a page from Peter Drucker’s and John Maxwell’s daily readers. They’re a great centering read to start my day. Don’t underestimate the value of this.

Next in this series, identifying who’s just right for your porridge.