Lifecycle of Starting your own Business: A Step-by-Step Decision-Making Process
Everybody at some point in their life has harbored the thought of starting their own business. But many either do not have a strong enough business proposition or strong enough drive and purpose to take that first step. Yet others go at it again and again hoping to have that big break, or some are just so good at it they start successful business after successful businesses. There are also others who are forced into situations to carve a livelihood and for survival. For the former, what is it about having your own business that so many people are jumping on the bandwagon? That is a story for another time!
I’ve started a few businesses in my 15-year career and were successful with some and failed miserably in others. I am in the process of starting my newest business and I thought it was a good time to share what actually goes on in the head of someone starting his own business and perhaps this could potentially help anyone out there struggling to take that next step or find clarity in where/what/how next.
My businesses have been traditional models without raising capital and were started on a shoestring with initial founder capital investment, so if you’re looking at how to raise that $1 million to build your start-up and actualize your dream, then perhaps this is not the article for you.
I have listed out the step-by-step decision-making processes I took from deciding on the business to being cashflow positive to being sustainable, and to achieve growth and success. How profitable you choose to be, is determined by the nature of your business, your propensity for risk, and your long-term business goals.
Starting and running your own business is an immensely rewarding journey, literally with blood, sweat and tears. Even if you fail, the lessons learned strengthens your mental fortitude and with the right mindset and having mindfulness, you will be well on your way to your next success, be it as a self-employed business owner, partner or employee.
Introducing your Business Idea
So… you think you’ve got a brilliant idea and you think that it will be filling a gap in the industry/space and you feel very strongly that there definitely is a need for it. But somewhere in your head, or in your circles of friends, there will be someone playing devil’s advocate to ask, “If it is such a simple (and good) idea, why hasn’t anybody else thought of it before?!”.
A brilliant idea that serves a need is not worth pursuing if there is no foreseeable future profitability. A good way to know if a business idea can be profitable is to come up with the revenue model, to see if the projected revenue received is sustainable and if the revenue is sufficient for your basic subsistence and if there is room for growth so your income is not capped. This is simple math and does not require complex formulas and growth extrapolation.
Once you’ve got that figured out, you’ll need to see if there really is a demand for the product or service that you are offering. A feasibility study with polls, surveys and focus groups would be able to give you a sensing of whether or not your business idea will take flight when it becomes available to the market. This also gives you a chance to fine-tune and make it more relevant to what people are looking for, and the needs that you are addressing.
In doing so, you already are mitigating the risks of investing more time, money and resources into the business. And preparing yourself for success.
Identify that need and the relevant target audience to get as much relevant data as possible. Data allows you to be confident of your business idea and this in turn will motivate you to reach your goals.
Finding Co-Founders or Partners
This is subjective and depends very much on your own skillsets, the amount of autonomy you want to run the business, and the eventual scale of operations. Some business starters feel (or know) that they will need someone else with a particular skillset to contribute as a co-founder, or maybe just someone to spread the risk or having someone else to ideate and build something together with.
You could possibly find your next co-founder or partner as you are gathering data when sharing your business idea. Harness the power of social media, and there are also platforms out there that will be able to find you a match.
Many of the considerations can be replaced by having good support structures in place, building a reliable team and having a mentor or coach walk the journey with you.
Some people choose to start building a team from the beginning, but I feel it is important to understand all areas of the business before hiring for the specific needs, and it is also about being cost efficient and bootstrapping, such is the thrill of being an entrepreneur. Because of this reason, I have left the organization chart and hiring to a later part in the business cycle set-up.
I chose to go solo with this latest business.
There are pros and cons to having co-founders and partners to share in the business. If you decide to not be a solopreneur, make sure you have a partnership agreement in place to iron out the shareholding as well as expectations with regard to roles and responsibilities of each party. Someone might be very enthusiastic now, but when unforeseen circumstances happen down the road, he/she might not be/feel the same way.
Determining your Business Purpose
You’ve confirmed that your brilliant idea will be a hit when it launches. The next step is to determine your business purpose. Most of the time, you would already know it and it could possibly have been the root inspiration behind the business idea. But if you didn’t already know it, now is the time to determine your business purpose, or at least refine it.
This means the vision, mission and core values of the company/brand/business. What do you exist for and what function does it want to serve in society? If this is clearly articulated, it will automatically resonate with the audience and it will make getting the message across so much easier if you get your business purpose right from the onset.
For the purpose of illustration, I will use my new business setup as an example. When I made the decision to set up my consultancy, I went through many weeks of questioning and finetuning before finalizing on this version. This was after working through the math on whether or not the services I wanted to offer would be sufficient for me to support my family and still live comfortably to put my child(ren) all the way through university.
My current work and projects already mirror the services I was going to offer with the consultancy, so I am keenly aware that there is a need for such services. The consultancy was to amplify the reach and streamline the branding.
Vision (The Why of the business)
To build a global community and alliance of leaders to help individuals and businesses lead with clarity, unlock fruitful solutions, experience growth and achieve targeted success.
Mission (The How of the business)
To help businesses and individuals discover clarity of purpose so as to navigate future goals.
To propagate the stories of others’ to inspire and motivate.
To empower with education, training and facilitation.
To engage through facilitating the building of communities.
Self, Empathy, Authenticity, Courage and Community.
Once you’ve nailed this, it makes decision-making and alignment so much easier. But this could be something you might be stuck with trying to figure out for a while, so take time to speak to others, and do your research on what others are doing/have done. How are other existing businesses in similar industries communicating their business purpose? Take reference from there.
Because this is your own business, start with identifying your own purpose. This will greatly assist how you craft your business purpose. The personal and professional purpose should not deviate too far from each other. This further adds to authenticity of the business/brand.
Now that you’ve defined your business purpose, you will be able to spin the rhetoric around it. The brand story should be authentic and personal to the founders (ie. You!). This could be anything from a childhood dream to an epiphanic moment while on a traveling adventure or the culmination of life experiences that led you to that one pivotal moment of freedom and truth.
For me, it was circumstantial. The pandemic forced me to pivot and explore different revenue channels because my wellness business was put on hold. I then decided to see how I could combine my personal Why of wanting to help people optimize and achieve targeted success, with a business purpose for a wider audience and greater impact. All this, without compromise to the time I valued with my family and being there for my daughter on a daily basis, as she progresses through life.
The brand story should also be tied closely with the business/brand name. Why the name was chosen, and how it relates to the service offerings and target audience.
Aviary & Co. is my business/brand. I chose Aviary because I love all things Avian. Every place I’ve ever visited I always bring back a “bird”. And this could be an art piece, tee shirt, book… significant to the place I visited.
“Taking flight” and “Birds of a feather flock together” were imageries associated with “Aviary” that really stood out for me with my vision.
Authenticity breeds trust and credibility. Think and act with that in mind with all decision-making.
Before putting in more time, money and resources into setting up the business, it will be wise to validate the business idea with a small sample size. This is the proof of concept and testing and trying it out with a closed network first. It is essentially your go-to-market plan tried on a smaller sample size first.
This reduces the risk of immediately going to market and having to incur costs that could possibly have been avoided. It also allows for fine-tuning and re-gigging anything that needs work. It could be the choice of platform, the way of communicating, programming or even colours.
If you are confident enough about your value proposition, like I am, then you can skip this step.
Lead-up Runway to Launch date
Timelines are important and you will need to map this out on a calendar to know when the key milestones are for you to keep focused on the different tasks you’ll need to manage. All the above steps I already mentioned should also be included in the timeline and this actually can happen concurrently as you are planning for all of the above.
There should be a minimum of a 6-month runway before you launch. In fact, depending on the product or service, you will typically need 12 months to have sufficient time to anticipate glitches and hiccups along the way. From beta testing to branding to creating awareness and interest about the product or service through advertising and marketing, to business development, sales and partnerships.
It is true that as a startup, plans change all the time. But without a timeline and calendar to refer to the multiple tasks on hand, you are essentially sailing without knowledge of stars or landmarks that mark the travel course for you. You will lose track of deadlines and your milestones, which could cause delays and also unnecessary loss of resources and cost. There are project management tools out there, but I choose to work on excel.
This is a long article, so I decided to break it up into three parts. You will be able to catch Part 2 in a couple of weeks! Please leave a comment if you found this useful.
About Alex Loh
I am a consultant and trainer in the fitness, health and wellness space, business owner, loving husband and doting father.
My compass is guided by the desire to help people. I help individuals and business owners to find purpose. Together we unlock fruitful solutions, experience growth and achieve targeted success. Having successfully built and maintained communities over the years, my focus is to help businesses and organisations harness community as the vehicle to connect, and build credibility, trust and authentic relationships.
Come speak to me about Developing Wellness Strategies, Finding Purpose, Building Communities and/or in Optimising your Life!
Photos from www.pexels.com.