Updated: Dec 11, 2020
Don't have time to read? Listen here.
I have started and closed several businesses in my life. Each had multiple themes in common, and some have failed to produce fruit. Others were so successful it was difficult to turn them off once I was ready to move on. I have learned a ton from each business I've owned. If I had to start a business over again, I would make certain the following necessities were in place while getting started.
First, evaluate your time frames. How long can you survive without making any money? I can hear you already, “Kyra, what the heck do you mean, no money.” I mean NO MONEY. You don’t start turning a profit in any business for a little while. Therefore, is it a week, a month, are you starving now? It’s essential to think in terms of Now Money and Later Money.
What can you do today that will bring you an income? Even $5 is something. Start brainstorming. What is the #1 asset in what you do that will offer a solution to a common problem most people have?
Come up with ten things right now. I know you want to keep reading, don’t you? Stop, write down ten low-cost (to your customer) assets you can contribute today. Some low-cost ideas are five to 25 dollar offerings such as; short programs, done for you templates your business uses, memberships to tools you offer online, day-long classes, or retreats virtual or otherwise. Making people’s lives easier doesn’t have to cost you or them a lot of money.
You can also consider those things that are outside your brand or company that just bring in money. We call these things a side hustle. What are five side hustles you can do right now to bring in income? I can paint. If it ever came down to it, I would offer to paint someone’s room, space, or office. There is a fair amount of money in it, and it’s relaxing. I can create images in Canva for Facebook ads. I can clean a house, run errands, or buy groceries for people having difficulty getting out. You notice I didn’t say get a job.
When we work a job unless it’s part-time, we have difficulty getting our creativity moving with business ideas. This comes back to knowing yourself. I would prefer to work hard for myself than advance another person’s business I may or may not believe in. You may feel differently. You may need to work your job until you feel you have saved enough not to need to make money for at least six months. I wouldn’t recommend spending those savings and do whatever you can to keep money flowing.
Another form of Now Money is saving money. Look at all your finances and find out where you are leaking dollars. You may have some auto deductions for services you don’t use. There may be some people or things you are paying for that you can now do because you have the time and energy to do them. The caveat to this is professional services like accountants, lawyers, etc. I have had LegalShield for five years. It’s a legal subscription service, just in case I have questions. I’ve never used them. Twenty dollars per month, not once have I used them. However, I like knowing if I need them, they will be there. I have an accountant and a payroll service. These are all areas I can’t figure out on my own and don’t have the time and energy to learn. These are people I will keep.
Once the pandemic hit, Todd and I went through all our payouts. We eliminated extraneous items. We are already very frugal, so we didn’t cut much.
The first time we did cuts was when we closed our hypnosis practice several years ago. We had to whittle down expenses massively. We went from an income of $130,000 per year to $35,000 per year. We did it though, we found all the holes in our leaky boat and stayed afloat. It is honestly the same as making money. In my opinion, a penny saved is a dollar earned.
There is a danger of taking out things that make you feel good. We had to weigh the pros and cons of each item. Eating out was a massive money suck. When we had the hypnosis practice, we were eating out every night because we worked 10-12 hours per day and got home at 10 pm most evenings eating well into the night. It was a temporary stress reliever, and it was costly on our waistline and health. We knew eating out had to go.
But certain things like buying a video game every once and a while or a subscription to Netflix felt good. Art supplies and new tires for the bike were also terrific investments. Things that helped our mental health and education were also a plus. Getting a subscription to YouTube, so I wasn’t bombarded with commercials, and learning Korean Cooking has been a tremendous gift to us both. I could make costly dinners at home for a fraction of the cost. Therefore, we allow ourselves to buy anything from the grocery store we want, even if it seems expensive at first. Feeling fulfilled is the key to a healthy business. There must be a balance. Always.
This is all Now Money as far as I’m concerned. You will be surprised at how much you can save and do today to make sure your abundance is always flowing.
Later Money is all about your long-term projects, services, or products. These may be things that take some networking and lead generation. There is zero instant gratification in this. You have to be satisfied with eating two marshmallows later.
The Marshmallow Study at Stanford University in 1972. Children were put into a room and placed in front of them a single giant marshmallow. If they didn’t eat the marshmallow, they would get an additional marshmallow in 15 minutes. But they had to sit with this one marshmallow and not eat it. The children knew of the potential reward, and those who refrained from eating the marshmallow tended to have better life outcomes. A profitable business is delayed gratification. Holding off on the marshmallow is very hard, which is why Now Money is so important. It gives you a sense of accomplishment while you are working on your long term goals. Not only that, but once you achieve a long-term plan, it’s time to create a new one. Otherwise, you risk becoming bored.
More about Later Money
Sometimes, what you think people want, they don’t. After extensive market research, putting together a stellar product or service, and even if it’s priced perfectly, it still may not sell. This isn’t meant to discourage you; it’s meant to make you go back to the drawing board. You don’t fail; you recreate. Start small and expand. The biggest pitfall new entrepreneurs face is wanting to get investors for their first-ever project; this is a mistake. It puts them in a position where they may be splitting profits or trying to pay back loans or interest they can’t afford. Expanding little by little will grow your business. Getting investors or funding is, dare I say, eating the marshmallow a little early.
I know you have an idea, and it’s a fantastic idea, and all your friends think it’s an amazing idea, that doesn’t mean it’s marketably viable. How do you fix this? Create a portion of this big idea and see how it sells. Follow your gut. Trust your instincts. But never listen to your ego. How can you tell the difference? The ego wants bigger, better, faster, and even after getting what it wants, it’s never satisfied. Doing something simple and elegant brings a sense of peace.
The cool thing about later money is once it's starts going, it will keep generating income for years. Even if you stop feeding the marketing machine. Google business is really good in this way. It takes a while for Google to rank your website, but once it does, it's hard to turn off the flow.
Starting from Scratch
When starting a business from scratch, I would need all of the above. At a minimum, a small amount of money flowing in, long-term promotions of big ideas and branding, a clean balance sheet with reduced expenses, and a good profit margin for short and long-term products and services.
Next, I need people. I always did, of course. Your community defines your business. If your community has always gotten things from you for free and you begin to charge, they may leave the community or even complain directly to you or others. If you are offering a service, you need to charge unless you are a 501c3, then you need to fundraise. I have seen more times than not people giving themselves away; this has long term side effects. I recommend you have a free community and a paid-for community.
I’ll give you an example. I started a small community when I was suffering from burnout and just wanted a safe space to hang out online. Once I decided I wanted to create a business, I dipped my toe in the free pool I initiated to see if anyone would be interested in my service. They said YES! Once the offer was made, they didn’t pull the trigger.
Isn’t that interesting. I have poured time, money, and energy into this group and zero return. It is because the initial intention was that the group be free. We see this with Meetup groups also. If a group or service’s original intention is free, the group members expect it and your other services to be free for life. I don’t blame them. Once the free train is moving, it takes a tremendous amount of effort to pull it in a different direction.
Interestingly, no one is wrong here, it’s just that my expectation was flawed, and they are acting normally. This is why when we do collaboration books, they have a whole separate group. They have paid to be there and often are more responsive, responsible, and accountable to the project we are working on. It’s a night and day difference.
Don’t get me wrong free groups or communities are fantastic. You can do some market research, and the connections you make can lead to opportunities. Just make sure you know the intention before going in. Do you want to make money? Offering a low-cost product or service which grants them entry to a special group feels not only good to you but to them as well.
Your paid community doesn’t have to be on social media. Some are moving away from social media for several valid reasons. You can use slack at https://slack.com/, which is free. It’s better than email, and you can be more responsive to questions and community building. Getting away from Facebook can also be healthier for your business because those in that community may feel they are heading to a more professional setting and have the “we are doing business now” mindset. It may help them to become more focused as a result. As we all know, Facebook can become a rabbit hole of distraction.
If I were to start over. I would determine what I am best at, know myself and my work style, get money flowing with affordable products and services that offer value to my customer, have long term goals, and begin building a community. From there, new ideas will come to me. As long as I’m focused on being of service, doing my best, creating boundaries for my personal life, and finally trusting that everything is working in my favor, things work out beautifully for everyone involved.
Knowing when to scrap an idea and start over is being a responsible business owner as well. That is an article for another time.
Keep going, you’ve got this! Two marshmallows are calling your name!