Posts Tagged ‘small business startup’

I have argued for small, very small, businesses over big business.  To pursue this non-conformist philosophy requires a certain level of rugged individualism.

Take, for example, Guy Kawasaki’s advice in The Art of the Start: regarding managing for cash flow.  Kawasaki says that managing for cash flow isn’t a long term practice. Eventually, he claims, a business builder will want to strategize for “paper” profits like growth, market share or brand recognition.  Management for cash flow is a strategy only for early stage bootstrapped businesses.

If your intention is to be a very small business owner, his advice for bootstrappers is useful, just don’t be sucked in by the claim that cash flow is not a long term practice. It can be.

If your choice is to create a business that will afford you a certain, adequate lifestyle, consider the life you will create as you follow Kawasaki cash flow advice for early stage start-up businesses.

Happiness is a positive cash flow. Fred Alder

Kawasaki gives the follow advice to maximize cash flow from your business:

Choose A Product That Is Easy To Sell

He is right. As you choose a business, don’t make it hard for yourself. I have worked with clients who chose to sell a debt reduction tool. They always struggle because, despite its proven success, the product is expensive, the usefulness of the product is difficult to demonstrate and the market, by its nature, is cash strapped.  Better to choose a product your market already knows it needs. Even though the market is highly competitive, there will always be someone selling easy weight loss and get rich quick schemes because these products meet a widely recognized need.  Choose a product that is just as compelling as beauty and wealth – but look for a niche with less competition.

Position Your Product

Once people recognize their pain, you want to make it an easy step to buy what you are offering.  Develop a marketing funnel.  Give your prospects a chance to experience your wares with little or risk as they come to know and trust you.  Keep your entry level product affordable, risk free and provide plenty of opportunities to build the relationship.  Remember running a successful, very small business is all about cash flow and relationship. Give your customers every chance to deepen their relationship with you and with your product.

Fill a Need

Another mistake I see my clients make early on in the business start-up process is choosing a product that fills an narrow market need. Usually this need is based on the client’s personal interest instead of a true market analysis. I’ve seen clients struggle to sell designer cat food to co-workers, or premium travel vacations to the ladies in the Fire Hall Auxiliary.  Don’t start a business, even a very small business, without first considering the size and level of need in the market. Also check for competition. If there are only 10 customers in a 100 mile radius and someone already sells high end cat food to them, you will have an uphill climb.

Follow Trends

One way to identify a need is to follow the trend. Social Media is an obvious trend but there are others: green technology, being frugal or alternative health care, to name a few. Beware. There is an art to this part of the start.  For the very small business owner, the product and the market can consume a large part of your day.  Seek a balance between following a trend and finding a product you believe in.  You will want to enjoy your customers. If you don’t like young people, don’t open a tattoo parlor.  You will want to find meaning in helping the people you serve.

Choose the right trend and you can create the good life.  Follow the trends blindly and you may become a success but miss being happy. Choose wisely.

Piggy Back on Someone Else’s Success

Like those birds that live on the backs of water buffalo, look around and see who or what is big in your world. You could create the next killer I-phone application, if you are so inclined.  A client of mine provides rides from the hotel district to the corporate office of a local training institute. Another, moves cars around for the local car dealership when a new order arrives.  Be creative. Let someone else create the need, you fulfill the demand.

What is your product?  Share it with the Working Miracles Very Small Business community by leaving a comment and test the market.

“Enjoy the little things in life, for one day you may look back and realize they were the big things.”
– Antonio Smith

Thanks to a guest post by Chris Guillebeau of The Art of Non-Conformity posted on Leo Babauta’s blog Zen Habits I am gaining further focus on the mission of my very small business and possibly my brand.   In my tag line I say my business is “Turning small business owners in to confident business leaders”.  I do that through not only teaching the basic business building skills that are not taught in most schools but also by helping  entrepreneurs set clear goals. That clarity comes when you, the business owner, knows with certainty what you truly want.

Pundits of business start-up have a collective mind set that assumes, when it comes to business,  bigger is better.  Today, in the post affluence economy, the focus for economic recovery is on growing small businesses into big businesses.  Witness the tax breaks available to business owners who hire; the tacit encouragement for small business owners to take on debt in order to grow, even the very definition of a “small” when it comes to a service or retail business is $6 million per year in sales. Not all that small.

It may be for some insightful business owners, for me and perhaps you smaller is better.  If the goal is to provide value, make a living and create satisfied customers, the focus on growing the business can just get in the way.

In his post Guillebeau make several good points but the two that most closely reflect my business philosophy are as follows:

Relationships and Cash Flow:

For a small business to get on with the business of being small the focus should be entirely on relationship building and cash flow. According to Guillebeau, relationship building activities include talking to customers (instead of outsourcing customer service) and creating new products based on customer feedback. Cash flow activities include joint venture promotions, sales, and offers to existing customers.  Notice that, when done right, these two activities can also comprise a satisfying life style.  For a very small business owner who is in touch with her customers, customers can become a tribe of loyal followers, a community of shared values, perhaps even friends.  When as a community leader a business owner provides a valuable service, he is respected and fairly compensated.  Cash flow from creating value.

Set A Clear, Non-Ambiguous Goals:

Guillebeau says his goals are simple, “happy customers who benefit from my work, and a good living for myself.” Of course what constitutes a “good living” is highly individualistic.  Personally, I resonate with Guillebeau’s definition, “Freedom to travel and work from anywhere without worrying about money” but your definition of a good living may be different.  Some of my customers want national fame and recognition, other just want to quit their job.

Tell me what are your business goals?  Do you aspire to grow your small business into a big business or is very small all you need for the good life?

A recent blog post on ReadWriteStart, a resource and guide for first-time entrepreneurs and startups sponsored by Microsoft BizSpark , claimed “If one was to enroll in Startup Entrepreneurialism 101, Guy Kawasaki’s books would likely be required reading. Kawasaki’s years of experience from the early days at Apple and the Silicon Valley venture capital scene provides a wealth of information for the eager entrepreneur.”

Kawasaki, for those of you who’ve been too busy starting up a business to read, is perhaps the most well known and most vocal venture capitalist in high tech circles. He is the author of the blog How to Change the World and the books The Art of the Start and the more recent Reality Check, among others.

Since my small business coaching practice is intended for 101 level entrepreneurs or those a little further along in the process who believe that it never hurts to revisit the basics, I decided to begin my first podcast with a lesson from Kawasaki’s book The Art of the Start.

Enjoy. And please let me know what you think of my first podcast.

Podcast: Play in new window | Download (Duration: 17:13 — 15.8MB)