David Waring is the co-founder of Fit Small Business, a website that provides small business reviews and recommendations. Previously he served as a top executive at Forex Capital Markets LLC, which he joined as an initial employee and grew to a team of over 700.
I have been involved in a number of successful startups as a founder, employee, and friend…
The one thing that I see consistently over and over again is that it takes around 3 years before a business is generating solid profits. The first year is all about just trying to figure out what you are doing and finding product market fit. Once you have your head on straight after the first year, then it’s all about refining the revenue model. It’s not really until the 3rd year that you really start to hum and make a good profit from the business.
From my experience, this runs counter to what most first-time founders think. They think they can get up and running and be supporting themselves in 6 months or less. Because of this many founders fail not because they have a bad idea, but because they run out of capital to support themselves until they can get things working.
Vienne Brown, founder of VienneMilano, is an entrepreneur and independent professional. Throughout her career, her passion has been to see products come to life, from concept to market. She has served a variety of clients, from international corporations, to startups, to nonprofit organizations, focusing on marketing and product management. Her personal interests include fashion and automobiles. Originally from Hong Kong, she lives in Boston.
Don’t conduct market research…
In the 70s, Sony conducted market research in order to determine if consumers would purchase a portable device that played music — a.k.a., the walkman. Sony ignored the resounding “no” that they received and launched the walkman anyway, and the rest is history. The fact is that consumers don’t always know what they want. Entrepreneurs should have a very clear message of what they want to do and remain consistent. For example, people aren’t always clear on what thigh highs and hold ups are, but people are buying the product. I stuck with my belief that there was a vacuum in the hosiery industry that needed to be filled, and filling it worked. Know what you want and believe it will work.
Sid is an entrepreneur, marketer, and VP of Growth at Thinkific, the all-in-one online course platform.
My #1 unconventional tip for starting a business is…
To start marketing your business before you even create it. If possible, get people to pay you up front and then figure out how to deliver your service or product.
This completely flips the traditional method of starting a business – creating a business plan, creating the product or service, and then marketing. The problem with this is that you put in all that effort only to get crickets at the end. However, by marketing first, you can determine if there’s a market for your business before you build it.
Neil McLaren is the founder of Vaping.com, a leading online supplier of vaping devices, supplies and accessories.
Build a community, then spawn a business…
The conventional way of launching a startup is to build a business and then find consumers to purchase the products or services that you are offering. We decided to do this process in reverse, and in paid off greatly! We began by building a community forum and attracting members who would eventually become our customers.
By engaging heavily with consumers within our industry, we were able to identify their pain-points, issues and challenges, and respond by creating and providing products that they really wanted. There is no market research equal to what you can gain by listening directly to buyers in your market. The feedback we were able to generate gave us insight that our competitors didn’t have, and allowed us to build a catalog of products that far exceeded the quality of what other brands were offering.
Don’t assume that you know your customers. Instead, get out there and speak with them and figure out what their real needs are!
Linda Murray Bullard is the Chief Business Strategist at LSMB Business Solutions which supports startup companies in making powerful needle moves toward their next levels of success.
Go under an existing company for one year to learn the skills…
Then, strike out on your own. I’ve actually worked with two very strong companies for the past two years and now, I’m ready to start becoming more independent.
David Mercer is a best-selling author of programming, Web and business books. He contributes to SME Pals, a blog dedicated to helping entrepreneurs and small business owners thrive online by turning creative business ideas into profitable startups.
Find a way to make money as early as possible…
A vanishingly small number of home or Web based startups actually make a profit. More often than not founders spend far too much time focusing on their product/service and far too little time networking, marketing and promoting in order to get their first few paying customers. Securing a trickle of funds as early as possible is vital because it gets the business in front of customers and reduces the financial burden of starting up. This allows your startup business to operate for longer (many small startups are bootstrapped and fold because they run out of funds before the business can become established).
To get this right, you have to understand how your business will make money right from the start. That’s easier said than done, because it means knowing who your market is, what they want, and how to convince them to trust you and pay for it.
Nenad is a veteran in the digital marketing and technology space with over ten years experience. He is currently the co-founder and CEO of CroatiaTech, a technology partner for agencies and corporations.
My biggest tip for starting a business is…
That no matter what you want to go into, make 2 or 3 sales by closing deals with people that aren’t family or friends. Then work on fulfilling that order. A lot of people think they know what others want, or will pay, or what it’ll take. So they make some big initial investments, without knowing how long it’ll take or how it’ll go. Make 2-3 sales, then fulfill on them, and you’ll be a year ahead of anyone else.
Paige started a global marketing firm 16 years ago, Mavens & Moguls, and clients include Microsoft, Virgin, venture-backed startups as well as non profit organizations. She graduated from Stanford University and Harvard Business School. She is a popular speaker and columnist who has written for Entrepreneur and Forbes.
Even though I started a global marketing firm…
I would recommend NOT spending money on things like fancy brochures, letterhead, business cards, etc. Until you know your business is launched I would say to put your budget into things that help fill your pipeline with customers. I created online stationery for proposals and invoices, ordered my cards online and made downloadable materials as leave behinds for people looking for more information. I know other business owners who spent thousands of dollars on these things and found it was a waste of money. Your story will evolve as you find your market, you need to look professional and have a web site to be taken seriously but embossed paper with watermarks and heavy card stock is not going to accelerate your sales cycle. Find those reference customers quickly, use them to get testimonials and referrals. There is plenty of time later to dress things up!
Matt Bentley is the Founder of CanIRank, an SEO intelligence software and digital marketing agency that helps small businesses and startup companies.
Start a remote-based company…
More and more companies are allowing employees to work from home with more flexible schedules. There are tons of collaboration software tools that can help facilitate team communication, even if you aren’t all working in the same location. One added benefit working remotely is you avoid having to pay for an expensive office, which can be one of the largest costs a startup faces. When you are first launching a business it’s important to keep your monthly expenses as low as possible.
Dustin Montgomery is the Digital Marketing Director at Shippers Supplies. With over 15 years of experience dealing with websites he continues to push the web forward.
My best tip for starting your own business is…
Start it before you are ready. Most people wait around and subconsciously make excuses for why they need XYZ in place before they launch. Don’t do that, 90% of your business can be figured out along the way. Just start it already.
Mario Serna, of CeremonialSupplies.com, has worked in the e-commerce industry—retail and wholesale—for more than 11 years. He has gone from working with well-established companies selling specialty products to working low-funded start-ups entering new, highly competitive markets. Being unconventional is a necessity in today’s overcrowded e-commerce market.
My number one unconventional tip for a new e-commerce business is, don’t stock anything…
As a matter of fact, don’t sell anything and don’t develop a full website with bells and whistles either.
Many new businesses start out of a perception of a need that is not being met within an industry, but unless you have hard facts about the supply and demand for the product, you are gambling on unfounded expectations. I am not just referring to the hard facts published by an industry newsletter or the experience of a buddy who made it big. I am referring to your personal niche within that industry. How will you fare against the established competition?
Before you invest thousands in a fancy website, merchandise, marketing, employees, a facility and all the other good stuff that seems like a recipe for success, invest a small fraction in a basic test website with solid copy/product information, and PPC traffic. Of course, you should have/gain some knowledge on how to properly optimize a PPC campaign, but your cost-per-click along with your click-through-rate will be telling of two very important things. One is how competitive the market is and two, how many people are in search of that product/solution.
Is your competition willing and able to outbid you for a large range of keywords, and if so, is a conversion worth the investment? You can create ad campaigns for the product even if you don’t stock it. Just try to see how many searchers click on the ad, how much time they spend on the product page, how many click further into the site to explore other products (vs how many bounce back), etc. Of course, the most valuable action is if they complete the checkout process.
No inventory? Don’t panic. Just establish contact with a supplier beforehand and be ready to slowly invest more and more into the products as you see orders increase. If the order volume grows out of your control and your CTR is efficient, this is an excellent problem to have as long as the cost to acquire that customer is justified by the sale. If so, it is time to move forward with the bigger investments to make a full-on e-commerce business come to fruition.
Todd Stichler, MBA is the Founder and Managing Director at LendSpark Funding & Advisory, which has provided $200 million in small business financing since 2012. A past owner of several businesses, Todd Stichler understands well the opportunities and challenges entrepreneurs face. He’s stewarded the financing of start-ups, growing and mature businesses, but he’s also helped businesses sell and wind-down. He’s acted as the chief financial officer of several corporations, including one with 350 employees and 7 offices.
Small businesses should know…
They can use multi-step financing to keep their businesses going far past the point of full capital utilization.
While every company believes they will be profitable quickly, it often takes twice or three times longer than estimated to meet revenue goals. It can also require two or three times the money.
Once capital is used up, businesses should know what assets they can leverage for capital. Many start-ups don’t realize that they can finance equipment they own to get working capital. As they sign more contracts, they can use accounts receivable for working capital and start paying off the equipment loans. When money comes in after work is concluded, they start getting even farther ahead. Depending on business need and industry, a workable path exists for a business to use smart financing to grow.
Shortly after graduating from UCLA with a degree in economics, Jeremy founded Schaedler Insurance, a Northern California insurance agency specializing in surety bonds for California contractors. Outside of work, Jeremy enjoys outdoor activities with friends and family. He is happily married and the proud father of two young boys.
The only mistakes that will hurt you are the ones you don’t learn from…
When starting your own business from scratch, there seems to be an unspoken code that your supposed to have all the answers for everything that gets thrown your way and that’s simply not the case. Successful people learn from experience and especially mistakes. In truth, the faster you can make mistakes and learn from them often dictates how efficiently your new business can adapt and grow.
Paul Riddick is an English creative, and multi-disciplinary designer. He founded his first company, Studio1337 – a design & online marketing company – in 2005, and has since gained experience in over a dozen industries.
My #1 tip for starting a business would be…
To consider a non-domestic location to register the business. For example, if you consider the Estonian e-Residency program to setup a business, you can simplify the process, accounting, tax returns and cut maintenance costs. Plus, it can help you gain access to the EU market without import/export taxes.
A great example is if I’m getting started with a low budget and want to dropship a product. I can find an international supplier with products warehoused both inside and outside of Europe – allowing me to sell to a wider audience and navigate away from archaic import/export taxes.
Categories Startups & Innovation