Garage Entrepreneurs

by garage Tags: angel investor, angels, business loan, Business Plan, Business Planning, Business Planning Blog, confidence, fastest growing companies, founders, running a business, start up capital, target customer, venture capitalist

May. 3^rd 2009

If you’ve been following the Garage Entrepreneurs Business Planning Blog Series, we’ve taken you through generating an idea, assessing good ideas, and validating your idea – now it’s time to get operational.

The majority of businesses never raise capital from a venture capitalist or angel investor – in fact, VC’s and angels fund less than 1% of businesses. However, this does not mean that you have to be in this 1% in order to become successful.

From the INC. 500 list of fastest growing companies, over 80% were financed solely through the founders (personal savings, credit cards, second mortgages), and the median amount of start-up capital amount was $10,000. Additionally, no investor will ever give you money unless you have invested significantly in your own company – you need to have some ‘skin in the game’ so that they know you’re not just risking their money, but yours as well. The good news is that starting a business with your own money or a business loan will teach you a lot about the reality of business, planning, and being careful with the way you and your business spend money.

Remember that at this point, you should still be focused on proving your business. Proving that there is a market. Proving that you can make this work on a daily basis. Here are your keys for proving and getting operational:

1. Shy Children Get No Chocolate: This is an old English quote, and it means exactly what it says. If you’re running a business you can’t be shy about selling, or soft about working. All opportunities are only prospective ones without evidence that you can access your potential buyers. In all the hype of your idea, don’t forget about proving that you have access to your target customer – prove this by selling to them.
2. You Can’t Discover New Land Until You Lose Sight of the Shore: Don’t hedge. Don’t keep doing what you’ve always done. Try new things, work on your idea with confidence and embrace that which you do not know.
3. Burn the Ships: You’re going to hear mixed reviews on this but I’ve made the most progress on my businesses when I dive into them full-time. Two years ago, I left a great-paying summer internship at Chrysler Canada to work full-time on my new start-up. This was a really tough decision but I moved my business forward an incredible amount. Although I wasn’t able to bank a lot of money that summer, making under $1000 in a summer looks great when it came time to apply for a scholarship/bursary and I ended up getting more free money that way than I would have as an intern at Chrysler.
4. It’s Iterative: When you’re trying to launch a new business, you cannot wait until it’s perfect – if you do, it’ll never happen. There is always one more feature, or one more tweak that you could be working on before you launch. Through my experience, JUST LAUNCH IT and iterate as you go. If it’s a website, make it clear that you’re in BETA and that you’re constantly getting feedback and making it better. If it’s a web design company, don’t spend two weeks on your logo – get it operational and keep improving as you go.
5. Get Stuff That Is “Good Enough”: I’m not saying that your business should simply be good enough; I’m suggesting that the tools you use to conduct business should be “good enough”. Do you really need the next best computer in order to run a video editing business? Do you really need the best lawnmower if you’re starting a landscaping company? As a new business, focus on the tools that are good enough and do the best that you possibly can with what you can afford.
6. Be Creative: Entrepreneurs come up with the best ideas when they’re on a tight budget. Tight budgets force you to make decisions (instead of just doing everything), and execute quickly and cheaply. Get creative with your solutions to problems. We operated our business out of the loft in a garage and got filing cabinets and desks from a local business that was changing offices. We didn’t have an official “office” but it was cheap and it got the job done.
7. Establish Relationships: So many people are willing to help out entrepreneurs in need. Reach out in your local community and establish a reputation as a hardworking go-getter – we’ve received some great publicity from local groups who we’ve reached out to. We also have a great working relationship with our local Small Business Centre, another great resource. Get out there and look for help, trust us, you’ll find it! If you don’t know where to start, try Garage Entrepreneurs.
8. Execute: You don’t always have to delight your customers, but make sure not to disappoint them. Deliver products or services that meet their expectations consistently. I recently spoke with the CEO of International News who said, “We’re not out to EXCEED customer expectations, we just want to meet customer expectations every day – and by doing that, we’ve exceeded their expectations.” Get your customers and deliver products/services that satisfy then consistently.
9. Find Ten: A key rule from Seth Godin. Find ten people that absolutely love what you’re doing and they’ll tell ten more. Find these people early because they’ll become your evangelists – telling everyone about what it is that you’re doing and how great it is. In turn, those people tell ten people, and those people tell ten people, and before you know it you’ve got a loyal customer base. Find those ten people today.

For the last few weeks, we’ve been focusing on mostly “soft things” like idea generation and trying to begin the startup process. These things are incredibly important to any start-up company and must be focused on diligently. In our next few posts, we’re going to get down to the nitty-gritty entrepreneurial issues like managing your basic finances and marketing your new business.

Check out the next post in the Garage Entrepreneurs Business Planning Blog Series: Managing Cash Flow.