How To Start A Business
By Leo Gura - March 5, 2014 | 3 Comments
Bootstrapping a successful business.
Hey, this is Leo for Actualized.org, and in this video, I’m going to talk about how to start a business.
Let’s talk about how to start a business. I’m going to give you a foundation. Five years ago, I started my first business. I got into a small business, online business development, and for me that was a huge, totally expanding, life changing experience, when you start your own business and go from being an employee to self-employed, or even an employer, if you have some people working for you.
It’s a really powerful experience. It’s one of the best ways to do personal development. How do you actually go about starting a business? If you’ve considered this, then you’ve also probably run against a couple of obstacles. We’re going to cover a couple of key obstacles here, that are probably keeping you from really starting that business and actually taking action on it, not just dreaming about it.
I think the two biggest obstacles to starting a business are motivation, finding the time and then creating the capital. Let’s cover each of those, and then I’m going to go into it a little bit further, and also talk about marketing and a little bit of the finances and marketing aspects of starting a business, which can also be very challenging when you’re starting off.
First of all, let’s talk about motivation. Motivation is important, because when you start a business, you have nobody else that is driving you but yourself. You really need to start to work on your motivation, and start to work on your psychology. That is how I got into personal development. That rabbit hole ultimately led to where I am now, five years later, shooting these videos and setting all this stuff.
Eventually, it started very simply — I wanted more motivation to run my business. The key thing when starting a business, you’ve got to ask yourself why do you really want this business. What is it? I would encourage you to find something within yourself that this business really serves on a deep level.
This should not be about simply money. This should not be simply about freedom from having a boss, or freedom from having to go to work and sit in meetings, or just sit around at home in your robe and work on your own schedule. That’s not sufficient enough motivation to really drive your business.
Your business should be about having impact on the world in some sort of positive way. Your business should be about something you’re deeply interested in, something that’s very meaningful to you. Do not make the same mistake that I made. Do not just start a business that earns you money. This is a really big trap.
What’s going to happen is that even if you start that business and it becomes successful, even if you are able to do that, and I was, the problem is that you’re still going to feel hollow inside. It’s going to be a hollow victory.
What’s going to happen is that eventually, you’re going to have to drop that business because your soul is not going to be able to take it. You’ll feel like your soul is getting sucked out of you, until eventually, you’re going to come to the hard decision to drop that business. That’s going to be very painful.
Once you do that, you’re going to be back to where you are right now, which is starting the next business that is now actually going to be living up to your true values, to what’s meaningful to you. Really consider, before you start, what is meaningful.
If you have some idea right now, that you think might earn you some money or is a good business opportunity, ask yourself is that really what is important. Is starting an internet affiliate marketing business really something that fulfills my soul? Is selling get-rich-quick products really something that’s going to fulfill my soul?
Is starting that restaurant something that’s really going to fulfill my soul? Or is there something more? Is there something else? Think about that. Find something that is really you. That will make your life so much easier, when you start a business.
Finding The Time
Next is creating the time. Starting a business and running a business, and especially launching it, those first few years, takes so much of your emotional willpower. It takes so much of your concentration, so much of your energy, and quite literally time. It takes time. It’s very difficult to start a successful business, even a little business, just a one man shop.
It’s really difficult to start that and to make it big and successful by just putting in a couple of hours every weekend. It’s really hard. I started that way, because I was working a nine-to-five job, and I didn’t have the financial luxury to quit my job at that time, and just work on my business full time.
My only option was to do this on my nights and on my weekends. It was painful. It was hard. I was basically working two jobs. I was working my nine-to-five, and then also killing it at home with my business, on my spare time. I didn’t really have a life. I didn’t have a relationship. I didn’t have any hobbies.
I was focused, all my time was taken up. That’s how it is when you start your business, the first few years. It does suck up a lot of your time. You’re probably going to have to be unbalanced in your life, those first few years when you start your business.
You only have so much time. You’ve got to prioritise stuff. The idea here is that you’ve got to really think long term and ask yourself what is the payoff going to be. I could see for myself clearly, five years ago, that I could sacrifice the energy that needs to be put out and the time, work really hard for a couple of years, that will really set me up and open up a lot of opportunities for me in the future.
It has. The opportunities that have opened up to me, and the amount of free time I have available now, after my business is up and running smoothly has really transformed the quality of my life in ways I can not even relate to you in a single video.
It’s incredibly powerful. You’ve got to ask yourself is it worth it. Is it going to be worth it to invest a little bit of time right now, extra time, work extra hard, kill yourself really, drain all your energy into this baby that you’re creating, but then that baby is going to be supporting you. It’s going to be supporting you for the rest of your life. It’s going to give you certain dividends and payoffs, not just money, but more importantly fulfillment, freedom to do other things.
You have to trick yourself and get yourself motivated in this way. Then you have to actually find that time. How do you find the time to start a business? Like I said, if you’re working a nine-to-five, and you have to, for financial reasons, keep doing that. It’s not smart to cut off your job and not have any means of support, probably will get you into trouble.
Keep doing that and start finding ways to generate more time. Weekends, holidays, take your vacation time off and use it to build your business. How about finding a way to maybe downsize the amount of time you’re putting into work? Maybe you can start to work part-time? Maybe that will work for you? Maybe you can just start to take one day off of work every week and that will work for you?
See what’s possible for you. If all you can do is just work on your weekends, then that’s all you can do. Just start there. It’ll take you longer to get it up and running, but at least you’re doing something. It’s better than sitting back and doing nothing. Don’t be a victim of the fact that you don’t have the time. You do have the time, you just have to shift your priorities around a little bit.
Pay The Cost To Doing Business
Next point is capital. Starting a business — this is probably one of the biggest obstacles people have, is something that requires capital, or at least a lot of businesses do. You might have some idea for some invention you want to launch, a book you want to write and then market properly, a website you want to build, some sort of organisation you want to create, some sort of product you want, designed and manufactured, that you just realised you don’t have the capital for.
To design a product, manufacture and then sell it might cost you several million dollars. To write that novel that you want to write might require you two years of research and study and also time just sitting down and writing the novel. Time equates to capital. Capital might be required to hire some employees in order to do whatever needs to be done for your business.
Capital might be required to run an organisation. Capital might be required to market your service and your product, even if you’ve already got a product and a service, that really doesn’t mean you have a business, because you have not marketed it yet.
Now is an amazing time in history, because we’ve got the internet. We have a lot of options for how to run businesses, and market businesses in totally free or low cost ways. When I started my business, I invested about two thousand dollars in cash, and that’s about all I invested in it.
After that, everything else came from the profits that the business generated, so I took profits from the business, channelled it back into the business, and used that to build it up. Basically, that’s called bootstrapping. That would be my idea for you — start to bootstrap.
A lot of ideas can be bootstrapped nowadays. That is an art and science in and of itself. You have to be clever. You have to be resourceful when you start. When you’re bootstrapping a business, you have to start to look for little shortcuts, little free avenues of publicity, cheap ways to get services or products created, or maybe just using your own time as the chief vehicle and the chief source of capital.
Your own time can be considered free in a sense. If you’ve got it, you can invest it in your product or business, and then generate a lot of capital, as long as you’re investing it smartly. It’s finding out where your time can actually generate the most quality product or service that is the key there to bootstrapping a business.
If you’re not going to be able to bootstrap your business, and there’s something you really want but can’t quite bootstrap, then you’ve got to start saving up for it or look for investors. Look for ways of convincing people of investing in you. There’s venture capital out there, there’s programmes like Kickstarter, where if you’ve got a good idea you can post it on there and maybe people will contribute to your cause.
There are angel investors out there, you can go find. There’s a whole art involved with being able to find angel investors, people to invest in your idea. That is out there. You can also just save up money. Perhaps you just want to work for the next couple of years, and you’re working on a decent job that’s paying you extra, more than what you’re putting away or spending on yourself, and supporting your family for.
You’re storing some of that in a nest egg. Hopefully, if you’ve got that savings and it’s building up, then maybe you can calculate that two or three years down the road, you’re going to have enough to go start that brick and mortar business that you want to start, that actually takes more money. You can’t really easily bootstrap a brick and mortar business. There’s too much investment upfront.
All of those are options, and you really have to start to think about what is going to work for you. You’re going to have to really deal with this issue of lack of capital. The next point is once you think about these issues of what you’re really interested in, where you’re going to get the time, how you’re going to generate the capital, the next thing is to really start to do research.
Get To Know The Market
You need to start to do a lot of research. Start reading about the market segment you want to go into. Start reading about the niche. Start reading about how business works. Start reading about marketing,specifically in those areas you want to apply it in. Start reading and doing a lot of research.
Start to understand who your potential audience is, who your customers will be. Start to interview them if you can, ideally. Ask questions. Try to understand their psychology. Understand what it is that they really want. What are their desires? What are their biggest frustrations and biggest problems?
When you understand that about an audience base, your potential customer base, that is so powerful. Then you can use that to optimise your product, and your service and your marketing to laser target that person, to basically find and solve that person’s problem as efficiently as possible.
When you do that, that puts you above the rest of the competition who usually do not do a very good job of understanding the audience’s needs and desires. Their product or service doesn’t quite match up to it.
The best way for you to compete is to do this research because the research is usually not something that requires a lot of money, it’s just time and critical thinking skills. Do the research, understand your audience, survey them, question them, really get to know them and then craft something unique that really fits what they want, fits exactly what they want, targets them so that they are really interested in buying that product.
What is critical when you’re starting a business is to really understand what is going to sell, especially when you’re bootstrapping. When you’re bootstrapping, you basically need the business to start to pay for itself as soon as possible. For that to happen, you really need to make sure you’ve got something people are willing to buy.
You don’t have years to sit and wait for the product to catch on. You don’t have years to sit and wait and to let your huge advertising budget, which some of these multinational, global corporations have like Microsoft or Google or Apple. You don’t have all this marketing power and this huge bankroll to just sit and wait for a product to become successful over a long period of time.
When you’re bootstrapping, you need something to be a hit right off the bat. To do that, you need to start to really understand your audience, and create something they’re going to really love. One of the keys to doing that is to do an interactive type of business model, where you are going out there and you’re not even creating a full fledged product or service, you’re just testing the waters.
Feel Your Way Around
You’re just seeing what could potentially work. You’re doing little proofs of concept. If you’ve got some sort of website you want to create, you just put that website up and see are people interested in it. You put up the most bare bones version of that website. You don’t build it as this gigantic, enormous project that takes you three years to create, because that’s too much investment in time and capital, and that might fail.
What you do is create something small, something within a month. You just put it out there and see. Do even one or two people like it? Just test out the waters. The same thing with any part of business. You’ve got to go out there and you’ve got to get a test case, a proof of concept, with feedback that tells you that it’s working and it’s something people are interested in and will pay money for, as soon as possible.
I think this is the biggest pitfall with starting a business, just saying “I’m all in and I don’t care what the market says.” Going in there and not paying attention to the market, spending all your time and investment creating this beautiful product, this beautiful service and then finding out that the market doesn’t want it, so that it doesn’t resonate with the market it, or that marketing it would be more than your resources allow for.
This is a big pitfall. If you’re starting a business, I think the biggest takeaway is to go out there and start doing these little tests. What you’ll also learn in doing these little tests is things about the market. This is actually the best way to do research — you throw stuff out there and see. Is it hitting? Where is it not hitting? Where is it not working?
Then polishing it up, and throwing something else out at the market, and seeing how does that resonate. How is that hitting? Then polishing it up again, and doing another run. You’re going to find that this process of trial and error is going to lead to your perfect niche. That perfect niche is where you’re going to get your success, your results, and your business is going to skyrocket.
It’s going to be profitable and everything’s going to go well for you. Right now, you’re still in the early phases, and you’ve got to start doing a little bit of this research, doing a little bit of this testing. Even if you start to do that just on your time off, on the weekend, little tests here and there, to start to see which direction you want your business to go in.
That is how to start a business. A lot more ideas I can throw out here, but this is just like an introductory segment. This is Leo, I’m going to be signing off. Post me your comments. I love to have feedback from you guys, because I use it to improve my videos. It also gives me ideas for new videos to shoot when you ask me different questions, and I find something interesting there.
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