Eager to launch your own business?
Many people have ideas?
Some ideas or better than others?
Even if you have a good idea, that's a long ways away from having an idea people really want and will pay for.
Before you get too excited, it's important to know that starting a business is not as easy as many make it out to be.
In the beginning you will not have tons of free time, endless amounts of money, and an instant brand people will know and love.
According to entrepreneurial icon, Neil Patel..
Do possess all that it take to launch a "successful" business?
If your stomach has started to turn, it's a good idea to stop reading and close this post out.
However, if you have the commitment, drive, and discipline to push through... then you will love this step-by-step guide.
If you've never started a business before, just know that what you're about to learn is different than the glamour that's being portrayed.
Launching and running a successful startup is extremely hard word with many highs and lows along the way.
But I can assure you it's well worth it.
Startups fail for a variety of reasons. Its your job to ensure you don't follow the path of those that have failed before you.
Launching your company is hard, but keeping it running healthy and strong is even harder.
However, it's important to follow a blueprint to give you a better shot at launching a successful business.
I have launched and sold at appointment booking app in the health & beauty industry. Additionally running a non-tech app consulting business as well.
I'm using this guide to share the knowledge that I have acquired to give you a straight-forward guide to follow during your journey.
There really isn't a guide that exist for literally every step you'll take during your journey to launch your business.
But this guide will give you a detail outline how to launch your business.
It's safe for you to use this guide as your blueprint to walk you through launching your business.
Start With the Revenue Model
Choosing a business model is the foundation of any startup.
Regardless how great your idea is, a startup must have a clear way to make money.
This helps you determine if it's worth the time and effort to keep going down this journey.
It's important that you understand what type of business model would best fit your personality and preference.
It's hard work launching a business and if you're going to make the effort to pursue this then it needs to be something you're at least passionate about.
At this point there are questions you may be asking....
What is a business model?
Which ones work best and why?
How do you know if your startup has the right one?
One way to get started determining which model works best for you is using the Business Model Canvas:
This is a great tool to use as a blueprint to help you determine the right business model to fit your startup idea.
You're determine who your customers are, where to market to them, overhead costs, revenue streams, etc.
Here is the criteria you must follow to establish your business model:
- The core of any successful startup
- Must tie to the consumer pain point.
- Choose ONE that's best suited for your business
- Don't try to reinvent the wheel by creating your own model
So what are the common revenue models being used by startups today?
Below is a summary, with some of the pros and cons or special considerations for each:
1 - Software as a Service (SaaS)
Also known as the on-demand model, has changed the way businesses of all sizes use software.
Provide a simple model with low barriers to entry and unprecedented opportunities.
The SaaS model is the pinnacle of all the possible startup revenue models because of it's benefits.
Starting with your opportunity to experience extremely high profit margins.
Very simple to implement and comes with recurring revenue month after month or year after year.
This gives you a simple way to project your revenue, profits, losses, etc.
Dropbox is a great example of a SaaS model which represents a thriving business.
Summary of Advantages:
- Lower up-front costs
- Easy to upgrade
- Instantly accessible
- Easy to implement
- Simplified revenue projections
There are some disadvantages that comes with building SaaS startups. Below is a list to be aware of.
Summary of Disadvantages:
- Security Concerns - security breaches from storing client information
- Internet Requirements - Some areas may have limited access
- Control Issues - users will be forced to keep up with changes
There are many things to consider when building a SaaS application, as it come with many advantages and some disadvantages.
Your greatest motivator will be the low cost to entry and revenue predictability.
You will want to ensure that you're on top of keeping your users information secured.
When deploying a SaaS model be sure to keep these tips in mind.
2 - Subscription Box Model
Service that sends paying subscribers a box on a regular basis.
Boxes are most often sent monthly but some services send them quarterly and others send them weekly or more frequently.
Your subscription box company could send a variety of products that your subscribers would be interested in:
- Beauty products
- Food items (niche to serve people with allergies or gluten-free)
- Products for pets
But there are literally tons of options to choose from.
The subscription box model has been around for quite some time, but still thriving with new ideas.
Venture capitalists poured money into a number of companies including ShoeDazzle ($66 million) and others.
You're likely familiar with Dollar Shave Club which is a perfect example of a successful Subscription Box model.
Dollar Shave Club has now raised a total f $147.8 million.
You can set up a subscription box business easier and faster offering thousands of different products.
As with any model you decide to take on, there are both pros and cons you must consider.
4 Benefits of a Subscription Box Business:
- Recurring revenue with one sale
- Simplicity - sends a similar box every month
- Blueprint Accessibility - follow a proven blueprint for success
- Predictable revenue
Disadvantages of Using a Subscription Box:
- Marketing and Brand awareness takes time
- Doesn't address high-pressing needs for users
- Existing competition in the marketplace.
For you to have a successful business you'll need marketing channels to make user acquisition cost low.
You'll need to find enough customers through those channels to ensure your revenue exceeds your fixed costs.
This is why companies like CrateJoy and Subbly is a great way to start before building your own site.
Even with the stiff competition, there is a huge amount of interest in subscription models and will continue to grow.
Subscription models are still growing fast:
Innovation has given you the extra boost you need to come up with some new ground-breaking ideas.
3 - Membership Website Model
Customers pay you a subscription fee to gain unlimited access to a service.
Many companies.... Gyms or country clubs have been doing this for years now, so nothing new.
Over the past years, member-based websites have changed the way this model is utilized.
Membership sites have change the way we shop online and how we watch movies.
Netfllix demolished the brick-and-mortar movie rental companies by allowing users to stream movies for a monthly fee.
Crazy stats to support Netflix:
- Reported in 2015 as having more than 60 million subscribers
- 11 billion hours spent on Netflix every month.
- More than 30% household in the U.S. subscribed to Netlflix compared to Amazon only 10%.
So how do you start a membership site anyway?
- Come up with a repeatable service customers would love to pay you for.
- Determine your company name
- Get a domain name
- Set up a simple site like WordPress or get one developed
- Connect with a payment processor
- Then launch to your early customers
Netflix revenue scenario:
60 million users x $10 member fee = $600 million in revenue
Netflix and Amazon are not the norm, but came together at the right time and right place.
Are you a blogger or provide valued content?
Do you currently have knowledge in an industry that people need on a monthly basis?
I'm in the beginning stages of launching a membership site sharing startup ideas with my members.
Here is how this works:
- Determine what you have of value to offer
- Create a name and website
- Connect a payment processor
- Determine the cost (multiple tiers)
Benefits of a membership site:
- Enjoy the recurring revenue like the SaaS model
- Easy to implement
- Predictable revenue
Downside of a membership site:
- High founder involvement; no set and forget it approach
- Generally low profit margins
- More f a niche model (smaller market)
Membership models provides an ideal mix of convenience, quality, and value.
Other companies are positioning themselves to be the next Netfllix or Amazon prime.
4 - Consulting (Freelance) Model
Do you specialize in web development, graphic design or social media marketing?
Freelancing or project-based work may be a way for you to start earning some income on the side.
Freelancers now make up 35% of U.S. workers and collectively earned $1 Trillion in the past year.
The number of freelance workers is growing quickly.
U.S. freelancers hit 55 million in 2015, up fro 53 million in 2014 and 53.7 million last year.
So how do you get started?
There are various companies that have made it easy for you to market your services.
All 3 of these platforms allow you to register your profile and immediately start placing bids on work that's created by their users.
Registering with any of these sites is a great way to get started if you're new to freelance work.
Benefits of starting a freelance business:
- Work when, where, and with who you want
- You control the value of your work
- Ability to promote yourself to make more revenue
- Simple to get started
Downside of started a freelance business:
- Not a scalable business model
- Generally local (can be national)
- Starting out will have to be more hands-on
Freelance work has been around for years and will continue to be a great way to start a business.
Commerce-based sites like Fiverr and Upwork has made it easier to market your services nationally.
If you possess the desired skills by most customers, then freelancing is a great way to get started as a business owner.
Solve a Real Problem for Customers
How do you come up with great startup ideas?
Many entrepreneurs struggle with this because they are focused on the wrong thing.
That's thinking long and hard about ideas.
Sounds weird right? Let me explain....
Entrepreneur icon, Paul Graham said it best:
He goes further to say:
"The very best startup ideas tend to have three things in common:
- They're something the founders themselves want
- That they themselves can build
- And that few others realize are worth doing.
The startup giants we know and love today started this way...
What's the number one reason startups fail?
Founders fail to solve a big enough problem that customers truly want and will pay your for.
What types of problems will you have to solve?
The short answer is BIG problems.
- Problems that people or business owners lose sleep over.
- Problems that waste time and money.
- Problems that people are actively looking for better ways to solve.
Quote from Matt Barrie, founder and CEO of Freelancer.com
"Every company needs to solve a problem, which can compare to the function of a painkiller as opposed to a vitamin.
When we have a toothache, we want a painkiller, not a vitamin, and we're willing to pay for it."
Pretty simple when you think of it this way, right?
If your business solves a problem that your customer is experiencing, then you are their painkiller.
When you solve for this, customers will immediately run to you for assistance.
Let's review a few "painkiller" companies:
Pain: time wasted calling and waiting on a cab. Even worse in big cities like New York or Chicago trying to flag them down.
Painkiller: on-demand cab services using your mobile phone. Book pickups and pay seamlessly.
Pain: going to brick-and-mortar rental locations only to find out your movie is not available.
Painkiller: streaming movies on-demand 24/7. No wasted gas or time traveling to the rental store.
Pain: running out of storage space with storing files, photos, etc.
Painkiller: cloud-based storage functionality freeing up space on your primary device.
When you focus on problems it prevents you from building something your customers really don't want.
I made this mistake myself.
In 2015, I started a company to allow barbershops and hair salons to better market on social media.
But they really didn't care about that.
So why did I spend so much time building this platform?
It's simple.... I didn't focus on the problems of my customers.
This is a clear example that I cared more about my idea than the reality problems my customer were facing.
How do you know when a problem is a "really big" problem?
Not by building anything (coding, etc.)
Not by building landing pages or surveys.
By getting out and talking to customers. Learn what they do and not what they say.
Here are the very steps I follow when validating how big a problem is:
1 - Come up with several problems
this is pretty simple actually.
Think of problems you're currently facing, friends, family, etc.
Check out Google trends, magazines, online publications,
There are endless amounts of problems to solve all around you.
It's your job to confirm how big they are.
2 - Find the people facing these problems
Business owners in just about any industry regardless of how much innovation are facing problems.
You can walk into just about any business, get a meeting with a business owner to talk about the things that gives them heartburn.
Scroll through Facebook... people complain there all the time. Strike up a conversation.
LinkedIn is by far my best go to place. For just about any industry you can find people to help you validate how big a problem is.
4 - Analyze your results
After have enough conversations, you should start to see a pattern.
If you're asking the right questions you should start to see how big this problem really is.
Two things that can happen which will work in your favor:
- You'll discover a bigger problem you didn't initially think of.
- Or you can move onto another problem without wasting tie or money
Once you confirm this is a big problem you can start comparing that against your original idea.
In most cases you will need to pivot a bit to ensure your solution solves your customer's problem.
At this point you're still not ready to build or code anything yet.
In the next section you will learn how to do market research and spy on your competition.
Check For Competition
What does competition actually look like in the startup world?
How can young businesses be competitive?
And is your society's relationship with competition healthy?
Keep tabs on your competition is a great strategy for launching and growing your business.
So how do you go about creating value when you first launch a business, and what makes you stand out?
According to Co-Founder of PayPal, Peter Thiel:
"You have to create something of value and capture some fraction of the value you've created."
Early founders get concerned when they have an idea and another company has already launched the same thing or similar.
Competition is good!
It means you're on the right path and there are customers already out there paying for the solution you're creating.
There is an amazing book I recommend you read to help you deal with competition.
Helps you understand how to create value and stand out among your competition.
Learning from your competition is the best way to understand how to better serve your market.
The biggest mistake is to enter the market and offer more of the same thing.
Customers are already accustomed to pricing, processes, and functionality.
Just merely adding the same thing bust with different colors will not cut it.
Offering something that decreases overhead expenses or reduces time is the way to disrupt the market.
So how do you get under the hood of a business and know their magic?
The traditional way we learned in school was this way:
In today's startup climate, we're taking it a step further...
Pretty simple talk to their customers or become one.
Everything your competition does to be profitable is available to you.
Once you determine who the most successful companies are in your market, go to their site:
- Buy their products
- Learn from their processes
- Offerings, sales funnels, and opt-in offers.
They're all avilable to you.
The best way for you to stand out, you need to know your competition inside and out.
Competition allows you to not reinvent the wheel.
Your competition is a great starting point to know the following:
- who your customers are
- what the like and don't like
- what they need ore of or less of
- are they looking for something better
How do you get stared with market research?
Sounds a lot like college or graduate school work.... well it king of is.
1 - Hire University Students
Hiring college students is a great way to get market research done for a low cost.
Think about it...
College students are in this mindset already because they are doing this exact things to earn their degree.
The other win is that college students are always looking for ways to earn income.
It's a great win-win proposition for you and the student.
I leveraged a university student when I was doing market research for my health & beauty appointment booking app.
Freed time up for me but I was able to outsource to get this work done.
Be sure that you're clear what you're looking for in terms of results.
Also make sure you're clear in regards to the terms:
2 - Talk to the Customers of your Competition
This is the most effective way for you to learn about your competition.
Finding your customers in some cases is harder than others.
If you're launching another social media site, not really hard to find those users.
But if you're looking to find customers using WordPress Tech Support on-demand service, that's a little more difficult.
Beginner strategies to find your competitions customers:
- Niche forums
- Quora or Reddit
- Facebook groups
Advanced strategies to find your competitions customers:
- Google Adwords
- Facebook Ads
- Twitter Ads
When placing ads you will want to target those users for a particular niche or company.
Direct them to a landing page getting their contact information for future follow-up.
3 - Past Failed/Successful Founders
Not reinventing the wheel is a great strategy to successful launch a business.
Not reinventing a broken wheel (business) is definitely a losting strategy.
You can learn a ton from founders that have succeeded and failed with their startup ventures.
Not likely you're going to get much help from someone that's still playing in your market.
But for those that have failed or succeeded and mvoed on in most cases willing to help you.
Here are some things that you want to know:
- what they did wrong
- what they would have done more of
- overview of thier customers
- revenue model
There's more but this basic information you will want to know.
Connecting with other entrepreneurs should be a part of your daily routine.
But if you need to get started here are a couple of places to start:
I've used Clarity in the past and it's a great place to get business advice for a fee.
As you can see, competition is not a bad thing at all.
It's a great sing that you're on the right track and don't have to create a totally different route to success.
Do more or better with what's working and do less of what's not working.
One Page Business Plan
Your goal is to start a project in a short period of time that earns money outside your day job..... initially.
A feasible idea is one that you can turn into reality using skills, time, and resources you already have.
This is confirmed establishing a business plan.
Not the traditional 15-20 page exhaustive business plan we're accustomed to.
You will only need either a sheet of paper or even better a note card to completely map out your plan.
All startup plans begins with either a simple problem or idea statement:
"I'd like to create an app that introduces a new way for nail salons to allow their clients to test polish colors on their mobile phones."
Before you can start building your plan from this statement you will want to do a little research by asking yourself the following questions:
- What will you need to get started, and how much will it cost?
- What potential obstacles stand in the way of launching your idea?
- How hard will it be for you to get your first sale?
- Has anyone ever done something like this before?
- If everything goes right, what's the best-case scenario?
- If everything goes wrong, what's the worst-case scenario?
The more clearly you can answer these questions to better your chances of moving your idea forward.
To plan and estimate the profit potential of your business you don't need a fiance degree or a business plan.
You just need a note card or a sheet of paper. A pen and bring your power of observation to build your plan.
Your basic principle to follow for your business is this:
"The secret to turning a profit for any business, boils down to one basic principle: don't spend more money then you take in."
"EXPECTED INCOME - EXPECTED EXPENSES = PROJECTED PROFIT"
EXPECTED INCOME - EXPECTED EXPENSES = PROJECTED PROFIT
Your first task is to get a full picture of your income and expenses potential.
Let's say you want to launch a healthy beef jerky business primarily for corporate offices:
For your expenses you will need to account for the following:
- Cost of the jerky itself
- Shipping cost
- Payment processor fees
For your income you will need to account for the following:
- how much are you going to charge
- different plans (monthly, semi-annually, & annually)
This is pretty basic but for more complex ideas there will be other factors you will need to consider.
Now let's put this on a note card to get the full picture:
Using this method you can change any of the elements to impact the outcome of your projections.
Keep in mind... it's more important to understand what your customers regardless what you have on your plan.
But this is a great starting point that you will validate later.
You can take it a step further and put this in an excel spreadsheet to project monthly sales, expenses, revenue, etc.
Grab the startup projections spreadsheet I use to determine how profitable my ideas are: CLICK HERE
Your business must have a clear plan to make money and the note card strategy is a simple and easy way to display it.
Trying to figure how you'll make money is a losing strategy and will never result in launching a successful business.
Don't get stuck worrying about trying to be 100% accurate with this.
Focus on understanding the income vs. expenses, and making sure you are working with a profitable idea.
Any idea that you're working with that doesn't have a clear path to profit you should stop working on immediately.
You've likely heard people say "money isn't everything".
But in the case of launching a business it absolutely matters.
****ONE SHEET PAGE METHOD****
For more complex ideas, I use the Running Lean method by Ash Maurya.
He uses the lean canvas approach which is a one-page plan which helps you answers all the resources, income, & expenses questions from above.
Below is a 20 minute video from Ash walking you through how to complete the Business Model Canvas.
Test Your Idea
Do you have a million dollar idea in your head, just waiting for you to launch it?
This question is one that stops many aspiring entrepreneurs before they even take a shot at launching their business.
Protected ideas are as good as dead, both yours and mine.
Your lack of ideas will never be the reason we as entrepreneurs don't launch our projects.
However, your ideas are worthless unless you take action and execute.
The best way for you to test your ideas are to put them out there in the universe and get feedback from real people.
There are some misconceptions about testing your ideas that can cause you to get stuck:
1 - Fear of Someone Stealing Your Ideas
Your idea is just that an idea. No one wants your idea.
It takes time and effort to build a business, validating the right problem, the right customers, price points, etc.
It takes hard work!
With you sharing your idea, there is a group of people as we speak in a room thinking about your idea.
Ideas are for pretenders, but executing is for winners.
It's important that you develop a 'testing your idea' mentality to successfully launch your business.
This includes getting feedback, learning about the market, customers, and making adjustments.
2 - You Have to Code Something
It's human nature that when we are in a meeting or perceived sales situation that we have to put something on display.
You may feel the need to put a PowerPoint or landing page together.
That way of thinking is wrong and stops you from testing your idea.
Your initial focus should be on your customer and learning about what they do and how they do it.
Not spending time coding or putting presentations together.
3 - Co-Founder Agreements
If you have a partner from the beginning there are a lot of things that can go wrong for you.
Like becoming a company before you're 'actually' a company.
You shouldn't spend time setting up agreements or company structures when you're simply validating an idea.
Remember... at this stage you're simply testing and validating your idea.
Nothing is confirmed yet, no money is exchanged... there is a time and place for this but not now.
User your time and energy speaking to customers and learning.
There is a simple 2-phase strategy that you can use to effectively test your ideas.
Let's assume you've identified a list of potential customers to talk to:
Round One: Focus on the Customer
When talking to people your focus is all about them, and not your idea or product.
You should refrain from asking them questions around features or services.
Asking these types of questions initially will steer you away from testing or validating your idea.
Henry Ford, one of the world's great innovators said it best:
"If I had asked people what they wanted, they would have said faster horses."
People will tell you what they want, but it's your job to create a product that not only solves their problem but a larger customer-base.
Instead, ask questions based on the 'real' problems they face today.
"What's the hardest part about doing _______________ as your business today?
After you've talked to about 10-15 people you should start to get a since where your idea stands.
At this point you can literally put faces and names to people that are facing your problem today.
Now you're ready to move onto the second round of your conversation with the people you've already talking to.
Here you will create a mock-up of the solution to solve their problem.
Round Two: Get Feedback on Your Solution
Instead of coding and showing an actual version of your product you're going to draw it.
There are several options that's available:
- Draw it with your hands
- Create it in PowerPoint
- Use Bubble
- Prototype software
You can't go wrong with any of these options. Don't over think it.
Here is a sample mock-up I did in PowerPoint for a client:
It's important to put something together and start getting feedback.
You're not looking for responses such as... "I really like it" or "I would definitely buy this!"
That all sounds great.
You're looking for things like, "This will help me save 'x' amount of time" or "This will help me save 'x' amount of money.
It's still important that you listen for more problems and poke holes in the first version of your prototype.
The best way to confirm if your solution is a vitamin or a painkiller, ask them for their credit card to pay for it when it launches.
After you have completed these two rounds of the discussion it's time to dissect and analyze your feedback.
Below is temple I put together to help you track your user feedback.
Here are some high-level interview tips to structure your conversations:
Do it in Person
When you're conducting these interviews it's best to do it in-person or via Skype.
This allows you to see facial expressions and emotions as you're asking your questions.
When you record your conversations you don't get distracted with taking notes.
This frees you up and allows you to just focus on body language and emotions.
Play the video back when you're ready to take notes and capture the feedback.
You should always ask for permission to record and be transparent why you're recording the conversations.
Talking to users should be one of the first steps when creating a startup and help guide you through each decision you make.
Testing you idea is critical very early in your startup creation process.
To truly understand how big a problem is, your market, and opportunities for growth....
Build The First Version
While there is good learning that happens during the idea validation stage, most learning happens after you release your product.
Many people in the startup arena refer to your first version as the Minimum Viable Product (MVP).
Simply put... your first version (or MVP) should be the basic version that solves the biggest problem you validated with your customers.
This means keeping all the fancy features you're thinking about out of your first version.
One of the challenges you will face during your second round idea testing sessions is "feature overload".
Your customers will get excited and started giving you advice to add multiple features.
It's your job to manage this.
You should definitely listen and document the recommendations but don't immediately just add it to your first version product.
The benefit of keeping your MVP to a minimum is it helps you to learn faster and reduces distractions.
MVP characteristics for success:
- keep it basic and simple
- start with the #1 problem in mind
- eliminate the nice-to-haves and don't needs
- listen and document your customers feature requests
- charge from day one; offer a 30-day trial and refund guarantee
- focus on learning, not optimization
Keeping these characteristics in mind will increase your chances for success.
Many time entrepreneurs see the highlights of many successful startups not realizing there was a beginning as well.
Facebook didn't have the state-of-the-art platform they have today.
They started where you are today with their first version:
Google is another example that started from scratch.
Building your first version can require some technical skills or ability to write code.
Many non-technical entrepreneurs stop at this point. Don't let this stop you as there are other options to push your idea forward.
options to code your first version
- Partner with a tech partner
- Outsource technical resources
What should you do if you don't have technical skills or the budget to outsource your first version?
Check out my blog post where I share how to build and launch your product without writing code or a limited budget.
Getting your business off the ground is a lot of hard work and coordination.
Many entrepreneurs just take the "lucky" approach to building a business by not setting a plan, not talking to customers, or market research.
Successful entrepreneurs follow blueprints and plans.
They know their competitors inside and out, and put a lot of effort in their customers.
They form partnerships with their customers and understand their problems, fears, goals, and desires. They validate their ideas and solutions with their customers.
Most businesses fail because they try to everything at once. In reality your customers don't care how great your site looks.
Customers want their biggest problems solved and are forgiving of an ugly first version of your product.
Use this step-by-step guide to help you launch your next business and bypass all the wrong steps other entrepreneurs are struggling with.
Focus your energy on your customers problems and getting the solution right to help them overcome those problems.
What steps will you take to take your ideas out of your head and into the hands of your customers?