As a lawyer, you’re already anticipating my answer. You’re wrong.
If you know me as a business attorney, you might expect that my answer to this question would be “incorporate.” If you know me as a partner in a small business lender, you might expect that my answer would be “raise money” or “capitalize the company.” You likely have your own answers – design a great logo, create a website, invest in great accounting software… the list goes on.
I had a “meet and greet” with a prospective law firm client a couple of weeks ago. The company sells audio fixtures and equipment for music shows and festivals. Their work is apparently top notch, their reputation and brand are growing, and they have more work than the three founders can handle right now.
After telling me all of that great news, one of the founders, somewhat sheepishly, confessed that they hadn’t spent much time getting their legal or financial house in order. He was noticeably ashamed that they hadn’t done anything along these lines – hadn’t formed an entity, hadn’t opened a business bank account, nothing.
It’s refreshing to see founders think this way
The founders looked at me, waiting for me to tell them that we needed to get right on these things. I probably should have followed their cue, piled on just the right amount of additional shame, thrown in a healthy dose of fear that the IRS and a slew of unnamed (but aggressive and formidable, mind you) regulators would be right on their tail, and signed them up as new clients straight off. But I didn’t. I patted them on the back. Not literally, but I had no shortage of praise for them.
It’s refreshing to see founders with their hearts and minds rightly focused – on sales, landing customers, wowing customers. So many entrepreneurs spend far too much time behind closed doors, tweaking pro forma models, sprucing up pitch decks, writing wonderful form customer contracts, etc.
All these things have value, but they are a distant second to getting out and finding a customer. In my book, that’s priority number one – get a customer, make a dollar.
You’ve been trained to think about liability, and I don’t blame you
I can hear you now – “But, Brett, if I don’t form a corporation or limited liability company to house the business, I’m personally liable if something goes wrong.” Yep, you might be. But you are also going to be personally liable for a business failure if you spend all your time focusing on back office stuff and don’t get out there and bring in some income. Besides, a company with no customers and no operations is in very little danger of being sued.
I realize that it doesn’t take long to form an entity, so obviously I am being a tad extreme to make a point. And since I am a business lawyer, I want you to form an entity. Better yet, lawyers like me want to be called upon to form that entity. Those other things I talked about – pitch decks and marketing strategies – are important, too, so go do them. But you better be out there operating, selling, and closing at the same time.
Businesses don’t build themselves. They need customers and income.
The Lean Startup Method gets a lot of attention these days. What I love about it is its focus on action. Do stuff, try stuff. Put products and services out there, sign up customers, gather feedback.
Don’t spend two years behind closed doors making your product perfect, particularly if you’re creating a new product or service that the market hasn’t seen before. Guess what? “Perfect” is perfect in the eye of the beholder. The market may flat out not want what you are building, at least in the form in which you are planning to initially put it out there. So make something and get it out there. Keep some of your powder (money) dry to make changes based on feedback.
What do the most successful brands have in common?
In the business classic, In Search of Excellence, Tom Peters and Robert Waterman, Jr. identified a common attribute of hugely successful companies – they have a bias for action. They try stuff, they tweak it, they learn from it. They aren’t afraid to fail, and a lot of this failure should occur in the marketplace, with real customers.
When I launched a mortgage company in 2001, my first startup where I had the reins, I initially spent too much time behind closed doors when I should have been out selling. I was fresh off a stint with one of the largest corporate law firms in the world. In the world of high-end law, you spend a lot of time making things perfect, dotting i’s and crossing t’s. That’s what our clients wanted us to do and they were willing to pay us well for the work. Everything is overstaffed – at least it used to be. Documents get revised again and again, fixing punctuation, making everything beyond perfect.
That mindset cost my own company dearly
That mindset is in sharp contrast to the “git ‘er done” mindset most companies should have when they launch. I brought that bias-for-perfection mindset into my new venture and it cost my company the strong start it needed. Plus, there was that part of me that didn’t want to get my hands super dirty, wrangle with customers, etc. I wanted to build something pretty and let others do the heavy lifting. I wanted to play puppeteer and direct others from on high. Customer service? Sales? Ugh.
Think you need your website just right to get out there? Afraid to show up without your business cards, which are still at the printer? Think your logo needs a little work and don’t want to launch without it being done? Get over it. No one really cares about your logo. It’s so unlikely to make a difference in whether or not you close your first sale.
“But, Brett, what will I say when they ask for my business card?” How about, “I ran out.” Or, “I’m having more printed.” Don’t feel comfortable with those responses? How about, “Business cards? We’re not using those anymore. We’re getting ahead of the curve. They’ll be extinct within three years.”
Say anything. Or nothing. My point is, don’t use any of these things as excuses for not getting out there and landing customer number one.
I learned my lesson in the mortgage company and, for a while, I had the FICO score to prove it. We burned through our capital quickly and our perfect logo, ideal form independent contract agreement, and meticulously organized company files weren’t recognized as currency by our vendors. Those were some lean times for me.
If you have more money than Google, you may never have to get your hands dirty
But if you don’t have a bottomless coffer, you need to have a sense of urgency about getting out there and bringing in customers (and, if you’re the leader, you better be out there showing your team how it’s done).
We got it turned around after I got off my high horse, felt the fire under my arse, and started hustling to bring in customers and build relationships. Along the way, I happened to learn a thing or two about what our customers wanted. Imagine that: a president who understood what it was like to be on the front lines.
Sure, I learned. But I am hoping that you don’t have to sport a 508 FICO score for a couple of years because you learned the hard way like I did. Tweak your pro forma, spruce up your pitch deck, get the messaging on your website just right, hire an awesome business attorney (hint, hint), but, please, pretty please, get out there yesterday and land a customer. Bring in the first dollar. Yes, you. Get hungry, get dirty. Interact. Try. Learn. Tweak your offering. Sell more. Git ‘er done. Everything else can wait.
‘Small’ business is a point of pride in the US, no longer a stigma
(BUSINESS ENTREPRENEUR) Small businesses make up the majority of companies, employers, and money makers of the American economy, that’s something to be proud of.
Prior to the Industrial Revolution, all businesses were small businesses. Independent craftsmen served communities with vital services. Small merchants opened shops to provide the community with goods. Lawyers, doctors, and other professionals hung out a shingle to offer their services to neighbors. Small businesses were the norm. Some of the most beloved American companies started out local. John Deere, Harley Davidson, and King Arthur Flour, all got their start as small businesses.
Business changes led to a attitude change
It wasn’t until manufacturing allowed businesses to scale and produce more efficiently that the idea of big business became more important. Post-World War II, the idea of a small business became derogatory. It was the age of big government. Media was growing. Everyone wanted to be on top. Small businesses took a back seat as people moved from rural to urban communities. Small business growth plateaued for a number of years in the mid-20th century. Fortunately, the stigma of small business is fading.
Small businesses are the backbone of the economy
According to the Small Business & Entrepreneurship Council, the “American business is overwhelmingly small business.” In 2016, 99.7% of firms in American had fewer than 500 workers. Firms with 20 workers or less accounted for 89.0% of the 5.6 million employer firms. The SBE also reports that “Small businesses accounted for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016.” Small businesses account for a huge portion of innovation and growth in today’s economy.
Modern consumers support small businesses
According to a Guidant Financial survey, the most common reason for opening a small business is to be your own boss. Small business owners are also dissatisfied with corporate America. Consumers also want to support small businesses. SCORE reports that 91% of Americans patronize a small business at least once a week. Almost half of Americans (47%) frequent small businesses 2 to 4 times a week.
Be proud of small business status
Small businesses are the innovators of tomorrow. Your neighbors want to support small businesses, knowing that their tax dollars stay in the community, and that they’re creating opportunities within their own city. Your small business status isn’t a slight. It’s a source of pride in today’s economy. Celebrate the fact that you’ve stepped out on your own in uncertain times. Celebrate the dirt under your fingernails, literally, or figuratively, that made you take a risk to do what mattered to you.
Positive self-talk can improve your performance
(ENTREPRENEUR) Speaking to others can be scary, but speaking to yourself is normal and can actually improve your speech performance overall.
Do you talk to yourself? Don’t worry, this is a no-judgment zone. I probably talk to myself more than I talk to other people – especially when considering the inner monologue.
I once read that people who talk to themselves are likely to be more intelligent. Whether or not this is factual I don’t know, but I do know that it’s important that you’re smart about the way you talk to yourself.
I’m a fairly self-deprecating person, so when I’m talking to myself about myself, it’s usually some sort of insult. About a year or so ago, I realized how often I was doing this, and made a conscious effort to be a little bit nicer. In that time, my mood has been a bit more positive.
This experience fits well into the research efforts of psychologist Ethan Kross, who has examined the differences in life success based off of how people talk to themselves. “Talk to yourself with the pronoun I, for instance, and you’re likely to fluster and perform poorly in stressful circumstances,” said Kross. “Address yourself by your name and your chances of acing a host of tasks, from speech making to self-advocacy, suddenly soar.”
This can be simplified as: Talk to yourself the way you would (or maybe, should) talk to someone else, and respond in the way you would want them to respond. Act with kindness, and receive kindness back – as a result, things are more cohesive, copacetic, and successful.
After working with participants in his study, Kross found a number of performance benefits to this self-talk method, including: better performance, higher well-being, and greater wisdom.
To demonstrate better performance, judges were brought in to listen to five-minute speeches prepared by participants about why they should be hired for their dream job. Half of the participants used “I” statements, while the other half referred to themselves by their own name. The judges found that the latter half performed better, and were found to have experienced less depression and felt less shame.
In regards to higher well-being, Jason Moser, a neuroscientist and clinical psychologist, measured electrical activity in the brain during participants’ usage of the different types of self-talk. During stressful situations, those who used their names instead of personal pronouns were found to have a significant decrease in anxiety levels, which positively correlated with a major decrease in energy use by the frontal lobe (talk about a win-win!)
With greater wisdom, the research found that people who use their names instead of pronouns are able to think things through more wisely and more rational and balanced way. “The psychologically distanced perspective allowed people to transcend their egocentric viewpoints and take the big picture into account,” Kross said of this piece of the research.
Well, Taylor is now ready to wrap up this article, and she hopes that you’ll give name-first self-talk a try, as The American Genius only wants what is best for their readers! Additionally, encourage people around you and those on your team to give this self-talk, first name idea a try – circle back after a week of trying it and share the results.
How to turn your side hustle or hobby into a successful business
(BUSINESS ENTREPRENEUR) Surely you have a favorite hobby by now, well what can you do with it? You can grow it into a full time business, but how?
Almost everyone has a hobby they enjoy doing in their spare time — something that sparks their creativity and engages their senses. If you look forward to your weekend pastime more than your nine-to-five job, perhaps it’s time to turn your passion into profits.
This path requires dedication and commitment. However, as you turn your hobby into a profitable reality, the hard work pays off. Getting to that point requires several steps. Thankfully, there are many resources out there that will help you pave the way.
- Establish the Basics: Establishing the basics will act as your roadmap for turning your passion into a business. This plan will no doubt change along the way, but it’s important to have preliminary ideas of where you want to take your enterprise.First, establish what you’ll be selling. Most hobbies can become a business, but you’ll need to hone in on what people will be buying. Anything of value — like products and services — can be an enterprise. Once you have that in mind, you can decide if you want it to be a part-time or full-time job. If you already have a job, managing your time between the two can get tricky.
To stay on top of your tasks, you can look into a time management app or software. With these platforms, you can input how much time you spend on certain projects. From there, you can properly divide your time and give your new business the attention it requires.
Next, you’ll have to conduct research. Is there a market for your product nearby? Can your business realistically take off in your location? How much needs to be e-commerce? Market research can help you determine who’s interested in buying and what you’ll need to get your business off the ground.
- Know Your Finances: Your finances are one of the biggest factors when starting a business. Too often, people rush into things without planning their expenses and resources first. Be sure to ground your plan with actionable steps. For instance, If you’ll be working from home, you can save on renting costs. However, some businesses require a storefront, so keep that in mind.You can also look into financial planning software or budgeting tools. Research relevant tips for budgeting when starting a small business. One pro-tip to keep in mind, if renting, is that you’ll want to save around six months’ worth of rent beforehand. That way, when you get started, you won’t rely on revenue to pay this expense.
Additionally, don’t forget about taxes. You’ll likely need to pay estimated quarterly ones and potential sales taxes, too. There are multiple tools to help calculate these expenses online. Don’t be surprised by the costs, a hobby can be inexpensive but ramping up to a business can be costly, but worth it.
- Take the First Steps: As you form your plans and goals, you can start to take the first steps toward a sale. This phase consists of setting up space in your home or a store and developing your products or services.You’ll also want to set up a digital platform where you can access information at any time. In this central base, you can refer to all the details about your plans, finances and marketing strategies. With tools like Google Docs and Spreadsheets, creating accounting documents and client lists become easy.
- Create Marketing Strategies: Your first sale will likely be to someone you know. That’s an important step. No matter who it is, though, marketing and advertising can take your business to the next level. Make sure you have a strong online presence. With social media and Google’s resources, you can increase your reach.Having social media pages on multiple platforms can help spread awareness of your business. You can use hashtags and locations to establish yourself so others can find you. Most of these platforms have analytic tracking, too, so you can see who engages with your pages and when.
From there, you can work with Google Analytics. It connects to your website and tracks activity and sales. It shows you which visitors come from social media, referrals and search engines. Then, you can focus your marketing strategies on strengthening those areas.
Additionally, it’s vital to focus on search engine optimization (SEO). SEO works with search engines like Google to push your listing to the top with keywords and links. As you cover your bases with SEO and social media, your online presence can grow along with your sales.
- Network: Outside of the online world, you have options for growing your business, too. Local companies can work together to help each other succeed — you can look into other small businesses in your area for new opportunities. People often overlook the power of collaboration, but it can bring about significant results.If you can provide a service or product to local businesses, they may be able to advertise for you at their locations. For instance, if you’re a florist and provide arrangements for a local coffee shop, it could put your business cards next to your display. Customers will see your information and know they have a local option should they need flowers.
You can also bring this connection to the digital realm. When you interact with other businesses on social media, people will see that engagement and click on your pages. That dynamic could translate to more traffic and sales. Check online to find the communities of your chosen hobby, the people there can fill you in on vital info that may be missing, or be a customer base you can connect w
- Keep the Growth Going: The last step is to perpetually keep your business growing. In this phase, you can quit your full-time job or reduce your hours to be a part-time employee. You can then focus on your new enterprise.You should expand your outreach through email newsletters, deals and coupons. You can give rewards to loyal or returning customers if you’d like, too. You can also add a blog or a section for customer service and inquiries to your website. Once your business grows enough, you may need to hire help.
As you progress, adjust your goals. You’ll see that your trajectory differs from your original ideas, but you can keep building to take it to the next step. Set new milestones and watch your business thrive.
When a Hobby Becomes a Business
You should be aware that this a long-term process. Building a brand won’t happen overnight, but the small changes will add up until your company is a force in the market. It’s also an ongoing activity. The more you grow your enterprise, the more possibilities open up. It all starts with your hobby and your entrepreneurial spirit, which can take you anywhere.
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