There’s never been a better time to start a business!
I wish I was my own boss!’
If I had a pound for every time I’ve heard someone say that, I’d be a very wealthy man. The desire to be in control of your own destiny is strong within most of us, and what better way to take control than running your own business? Well, despite (or perhaps because of) everything that has happened, thanks to Covid-19, there’s never been a better time to start a business.
If you’re already in business, the chances are you’ve found yourself in one of two camps since lockdown began. Either you’re busier than ever before as demand has gone through the roof or you’re contemplating your options because your sales disappeared overnight. Very few people have experienced no change at all.
If you were employed and found yourself on the furlough scheme, then, just like those whose sales disappeared, you’ve had a lot of time to consider your options. I know many people on furlough who have tasted life outside of their current workplace, and who have decided now is the time to do something for themselves. With that in mind, here’s a simple article designed to help you start and grow a successful, sustainable new business.
Do what you love doing
The first rule when starting a business is to make sure you’ll be doing something you love to do. When you become your own boss, you’ll also find you are your own salesperson, marketer, administrator, tea-maker and purchasing officer! You will spend your time covering all the work that needs to be done, so make sure you will have fun in the process.
Ask yourself this question: ‘What do I love to do for fun?’
A common mistake when starting a business is to chase the money. We see people who have been successful in a specific business area for an employer who think they could make money doing the same. That may or may not be true, but it’s a myth that money buys you happiness. If you love what you do, you will be prepared to do it just for the love of it. Money won’t get in the way, and as a result, you will get more chance to do it. More people will engage with you, your reputation will grow, and the opportunity to make money will follow.
The other mistake often made is to think that you’ve to set up a ‘proper business’. If the thing you love doing is too unusual, there’s little point in trying to run it as a business - might as well do something ‘proper’ instead. When I was a BizFizz Coach in the late 2000s, one of my colleagues had this exact example. A client had come to him, who intended to start a painting and decorating business. There were grants available at the time, and he wanted one. My colleague detected that the client wasn’t really into painting and decorating, so he asked what they did for fun. When he asked this, the client’s eyes lit up, and they described their passion for hang-gliding. They did this every weekend, they were qualified to instruct others, and it was clear that this was much more interesting to them as a way to make a living. They applied for a grant for a new hang-gliding school; it was approved, and they never looked at painting and decorating again. The local authority supported the client’s application because they saw their passion for the business. People will buy into you if you’re authentic, enthusiastic and interested in helping people above everything else.
It’s not about ‘what you do’!
Now, having got you thinking about ‘what you should do’, I would like you to set that aside. Unless there’s an immediate and obvious need for you (e.g. plumber to fix a burst pipe), very few people will come looking for the thing you do. Instead, they will want the difference you make.
People buy products or services because they have a need. They require something to be changed, for something to be different. They will buy a product or a service because they believe it will fulfil a need. When you’re looking to engage with people who might buy from you, it’s essential to start with this need in mind.
Thinking about the thing you do that you love, ask yourself some more questions.
Have you ever done it for someone else? If so, what benefit did they notice afterwards? What was the difference you made for them?
If you did make a difference, did this have a measurable value? In an ideal world, the difference will be measured in saved time, saved money, or more money made; however, it could be something else. It may be that you helped someone keep their kids calm, or helped someone enjoy a nicer garden. As long as there’s a specific, measurable difference, you’re developing an approach that will help you find your first customers or clients.
The simplest way to explain this is to look at a very common product. Soap powder.
When you buy a box of soap powder, how much do you know about the chemical formula, the machine wash cycle, or the washing characteristics of the product? Unless you work in the industry, I’m guessing the answer to those questions will be, ‘Nothing’. To help us choose their brand of soap powder, manufacturers do not spend time explaining these characteristics to us. Instead, they develop straplines such as ‘Washes Whiter’, to help us make an informed choice. If you look at the noticeable difference(s), they’re all after the product has been used. If you need your whites to be whiter, you buy Daz because that’s what it says it will do after you’ve used it. You don’t buy it because there’s a unique chemical in the box.
You can apply this to your new business, too. The good news is that taking this approach makes it quicker and easier to bring yourself to market and find some customers.
When we start a new business - especially if we’re doing something we love to do - the temptation is to spend lots of time perfecting it before we test it with some customers. We spend loads of time perfecting our offer, our product, our service and our pricing. We invest in all the marketing collateral we need, including a comprehensive website covering everything we do, and back this up with social media and SEO campaigns. We might even go so far as to rent an office (pre-Covid-19, of course), lease a vehicle, and invest in signwriting and graphics so we present a great image to the market. The good news is that you don’t need to do all of these things before you talk to potential customers.
If you’ve worked out that you make a difference for others, the next step is to think about the people who need that difference the most, then go and talk to them.
If you’ve already made a difference for food manufacturers, for example, it’s perfectly reasonable to approach more food manufacturers and see if they need the same difference. If the difference you make is compelling and of sufficient benefit, they will want to find out more from you about how you can help them. Working this out in advance means you can channel your networking and your marketing activity towards this ‘market niche’, which makes it easier to create and deliver impactful content, activity and campaigns.
You can also move up the chain and see who else helps the food manufacturers you wish to talk to. Ask yourself how you benefit these extra people you want to talk to. For example, if you wanted to talk to lots of food manufacturers, you might seek out accountants as they could introduce you. However, don’t expect a warm welcome from the accountant if all you want to do is to talk to their clients! There must be a benefit for the accountant, so ask yourself what difference you can make to them. If you can help them generate more fees, they’ll be interested in talking to you. If that happens to involve you working with their clients, at the very least, you’re giving them a reason to talk with you about how that might work. And, more importantly, if your network knows about this, you’re giving them a great reason to introduce you to their accountant.
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Referrals and recommendations
It is a well-known fact that the best business comes from word of mouth. Various studies have shown that referrals increase trust and boost the likelihood of engagement or purchase. What is not so well-known is that the secret to generating referrals lies within your social capital.
Your social capital is defined by sociologists as your narrative in your network. That is your story developing over time in your network. If you think about the last time you referred someone to a friend, there will have been two parts to them accepting your referral. The first was that they mentioned a need to you and you knew someone who could help them. The second will be that you shared a story with them that supported the introduction. Most commonly, you will have used the supplier yourself and can tell a personal story. If you’ve recommended someone based on how they helped someone else, you will often have personal knowledge of the other person they helped. Your reputation goes with every referral you pass (which is why accountants won’t be happy to introduce you to their clients just because you ask them to!).
As we covered earlier, this is another new business process that does not involve what you do. Effective and engaging stories will be about the difference made and the way you worked. If you were helpful, punctual, tidy and on budget, you will be recommended. What you actually did and how you did it is often taken for granted and does not help with the introduction process.
So, you’ve worked out what you want to do, who it helps and how it helps them. You’re starting to generate stories in your network of how you help people. Referrals are starting to come through. The next step is to make sure you get paid.
A question I’m often asked is whether or not someone’s pricing is appropriate. It’s an impossible question to answer yet an easy one to test. Whatever you decide to charge, there should be some logic to it. There are plenty of resources covering pricing, so I won’t go into that here, but as a basic principle, make sure you’re making a profit on your products or activities after you’ve paid yourself a salary. Your profits are not your salary – otherwise, you’ll never be able to invest in staff or additional activities to help you grow.
The three-stage buying process
When people are looking to buy something, they go through a three-stage process. We’ve covered the first two, which are:
Does the produce or service meet my need?
Does the provider or supplier have credibility, in my eyes, that they can meet my need?
We’ve turned the thing you love doing into a difference made for someone else, which is meeting a need for them. We looked at the value of stories in your network and how they develop into a strong reputation. If you’re referred, you have the highest credibility that you will be able to meet the need.
The good news is that, if the buyer can answer those first two questions with a ’yes’, the next question is just:
Can I afford it?
Notice that this is not ‘what’s the price?’. If your main strategy is simply to be cheaper than your competition, you will run out of money and your business will fail. If you follow this model, you will also be missing the point.
People don’t worry about the absolute price. They worry about affordability. If a more expensive product better meets the need or has greater credibility, customers will pay extra if they can afford it. If we all bought the cheapest, there would be no need for premium or luxury brands.
There has never been a better time to start a business!
At the start of this article, I made a bold claim. Despite everything that’s going on, I believe that there has never been a better time to start a business. Having explained to you how simple it can be, what’s holding you back?
People still have needs and want things to be different. If you need to contact someone to run an idea by them or pick their brains, the chances are they’re working from home right now, so it’s easier to get hold of them. If you need to find and share stories, we’re spending more time than ever online; social media traffic has grown massively. And you don’t need to spend money on the things considered necessary before we went into lockdown. You don’t need an office or a new car, or to invest in smart new clothes or shoes to make a good impression.
Work out what you love doing, work out how this makes a difference for others, and work out who really needs this difference the most. Reach out to people who fit such criteria and offer to help them. If you do make a difference, you will gain confidence and you’ll start to build your reputation. On the back of this activity, you’ll start to be referred to more people with similar needs. And finally, whatever price you charge, if you lead with ‘needs’, and your stories give you credibility, your customer or client will simply need to ask themselves if they can afford it.
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