Starting a business is an exciting adventure, and has the potential to be incredibly rewarding, both emotionally and financially.
However, it is also fiercely competitive, unforgiving and littered with traps waiting to trip you up!
On this page, I will go through some of the core principles you should consider before starting a new business, and my top tips for navigating the journey.
- New business ideas
- Services vs Physical products
- Your ideal client
- Funding vs Bootstrapping
- MVP: Minimum Viable Product
- Essential Tools
There’s a lot to go through here so let’s dive straight in!
new business ideas
Coming up with an idea for a new business involves:
- Finding an unsolved problem, or…
- Solving an existing problem in a unique way.
Option 1 can be risky and expensive because your customers probably won’t know the problem exists yet.
But, if you get this right the opportunity is huge.
Option 2 is the far more common approach, and is what I recommend if you’re new to business.
The main things to consider when coming up with a new business idea are:
- What problem do you want to solve?
- Should you create a product or service?
- Who is my ideal customer?
- Where does my brand fit into their journey?
- What is the minimum viable product I need to test demand?
- How much will it cost to launch in the first 3 months?
- How many units sold = £1 million in revenue?
- What should the profit margin be?
There are many more questions of course, but these are the core ones to get you started.
If you want to learn my full strategy for launching a new startup, you can download by startup guide here.
services vs physical products
Once you’ve come up with an idea, you need to decide whether a physical product, or a service-based business works best.
Usually, you will be able to do both, but it’s best to start with one type of offering.
The benefits of services are:
- High ticket (revenue per sale)
- No inventory cost
- Flexible offering
- Relationship driven
However, make sure what you sell has a mixture of in-person and online components. Otherwise, your ability to scale will be limited.
The benefits of physical products are:
- High profit margins
- Low operational costs
- Easily scalable
Most of my businesses have been service-based, with a physical product component like clothing or apparel.
Make sure you think hard about what will solve your customer’s problem in the best way before deciding on either one.
your ideal client
Understanding your ideal customer is critical to your success in business.
When you figure out the persona who has the problem you are trying to solve, it makes it much easier to create a product or service that will solve it for them.
Some of the things to consider are:
- Are they male or female?
- What is their job?
- What industry do they work in?
- Are they married?
- Do they have kids?
- What do they think, feel & hear on a daily basis?
- Where do they get their information?
- What are their beliefs?
There are many other questions you can ask depending on your specific business, but this list should be enough to get you started.
funding vs bootstrapping
Funding and bootstrapping are both valid strategies for launching a business.
- Funding involves securing investment from other people to pay for initial operations.
- Bootstrapping means making a sale, and using that money to fund growth.
Typically, you will need some proof of concept before you are able to secure funding, but that does not have to be in the form of sales.
If you have a good-sized audience that is primed to buy, but you need money to pay for product inventory, then you have a good case to raise capital.
To raise the money, you could try:
- Selling shares
- Getting a loan
However, with service-based businesses, it’s more common to bootstrap because of the high ticket price which will easily cover a 1 person team (which is how service businesses usually start).
minimum viable product
“Minimum Viable Product” is the most basic version of your product or service that you need to create in order to test demand for it in your market.
A big mistake companies make is spending months developing something, at great cost, and then realising nobody wants it.
A better strategy is to:
- Identify the problem
- Identify a basic solution
- Try and sell that solution
If you make a sale, great!
Build on that and improve your offer.
If you don’t make a sale, great!
Now you know what doesn’t work, haven’t wasted any time or money, and can get valuable feedback on how to improve your offer.
I learned about this in “The Lean Startup” by Eric Reis, which I highly encourage you to read.
There are a number of essential tools I like to use in my businesses.
In reality, all you really need is an idea, a phone and a determined attitude, but some of these can also be helpful:
- Accounting software
- Calendar booking software
- Video call software
If you have all 3 of these set up from the beginning, it will streamline your sales call process much better, and help you keep track of what you are spending so you don’t break your budget.
However, if you’re interested in a more detailed list of tools that I use regularly, download my full list of essential tools here!
Hopefully, the information on this page has given you some idea of how to start a business the right way.
Every business is unique, and there are many different variables of each one, so it’s impossible to cover everything here, but it should be enough to get you started.
If you’re interested in learning more, I encourage you to download official YBMB business e-books below that will help you take your first steps towards a successful career…
Or, if you want to work with me more closely, I encourage you to join my programme Business Mastery which has helped thousands of people build the careers they deserve!
Download The Official YBMB Business E-Books
Ideal Customer Worksheet