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Read the article below.
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How to start a business – step by step:
- Select the best business idea for you
- Develop a product / service that your customers actually want
- Research your customers and competitors
- Make sure you have “real” product market fit
- Create a realistic budget & projections
- Review everything above then make a Go / No Go decision
- Create a brand
- Decide on a legal structure
- Develop a marketing plan and create your website
- Stay focused by remembering to maximize your impact on your customer
1. The Best Business Idea For You
What is the Theory Of Pii? Pii stands for Passion, Income, Impact and this is the simple summary of the theory:
If the thing you’re most passionate about and the thing you do to earn an income are the same and they also have a positive impact – then you are living in the sweet spot of life.
So how do you figure out the best business idea for you?
Make a list of 5-10 things that you’re passionate about and list them in order of most passionate to least passionate.
Then make a list of ways you can make money by using skills you already have or are interested in learning then list them in order of things you can do that will make you the most most money to the least.
Then make a list of things you can do that will have a positive impact and list them in order of biggest impact to lowest impact.
In an ideal world the items at the top of the list are all the same. But that’s not likely. It’s more likely that you will see a pattern emerging where there are some common items on all three lists and that is the answer you’re looking for.
Remember that you’re looking for a business where you can work on something you’re passionate and make money and have a positive impact.
You want this because this business is much more likely to succeed because you likely already have knowledge of the industry so you have a head start, you will enjoy learning whatever you don’t know, you will enjoy working with the people in the industry, you won’t give up easily, you know it can allow you to make all the money you need and, as a result of having a positive impact you will be proud of your business and you will be respected by people that matter to you.
The only way to get all of these benefits is to apply the theory of Pii so please take 15 minutes to do it.
2. Product / Marketing Plan
Now you need a PAC strategy.
What is a PAC strategy. This is a simple business planning concept that I invented that allowed me to see the most important parts of my business on one screen so that I could make better decisions and allow it to be organically updated daily.
PAC stands for Product, Awareness and Conversion.
Most business models look something like this. You need to have a product to sell, you need to generate awareness of the product then you need to convert some of those people to customers.
You can replace the word product with services and you can replace the word awareness with traffic. It’s all the same thing. It’s critical for you to understand that you need to optimize all three of these.
I’m sure you can see that the best product on the world will not sell if your site doesn’t receive any traffic and all the traffic in the world won’t generate sales if your conversion strategy doesn’t work.
If you do happen to get a lot o traffic and you do a good job of converting them to sales but you’re selling a crappy product, you will make some sales in the short term but you will get bad reviews, you’ll have a lot of refunds, your payment processor will shut you down, you’ll get black listed in multiple places and people will sue you. So you need to optimize all 3 of these.
One of the most common reasons that businesses fail is that they only do a good job with one or two of these. Your success will always be limited by your weakest link in this sequence. I repeat, Your success will always be limited by your weakest link in this sequence. You have to optimize all of them. And you need to have a plan of some kind for these three BEFORE you start your business.
A lot of people make the mistake of spending a lot of time on SEO and other traffic tactics before getting a real understanding of their target market. This is a massive mistake.
If you attract the wrong people they will have no interest in your content or your products and services. There’s simply no point in bringing people to your website if you’re not confident that you’re offering the exact thing that those specific people want.
You’re probably thinking, well it’s impossible to know what hundreds of thousands of different people want. And you’re right. This is why you need to create a persona of your customer.
This is the process of creating a detailed profile of a typical customer and it allows you to create products, features, marketing materials and other content for one imaginary person that represents your ideal customer. This is obviously much easier than speculating about the needs of thousands or millions of different people.
4. Product market fit
Now that you have an idea of what product or service you want to sell and you have done some customer research you need to review the product to make sure that it really does match the customers’ needs. If it doesn’t, then you might need to refine your product or your marketing plan or both. You might have to go back and forth a few times before you get this right.
You need to be confident that your product really is something that the target customers want and not just something you think they want.
5. Budget & projections
Now that you have nailed down the product and your marketing your marketing plan its time to create a budget and some projections. Make a list of your up front expenses, monthly expenses and annual expenses. You need this in order to calculate your up front costs and you also need it to calculate your break even point.
Then create a sales projection that includes and low, medium and high scenario. Then take a look at how much revenue you need to break even.
6. Go / No Go.
This is the time to decide whether you want to go ahead and start this business. Does it seem like it will be easy to break even or does it seem difficult?
You can also take a moment to imagine the best case scenario. Does it seem like the business can be wildly successful or does it seem like the upside is capped?
Will it be easy to deliver the product or service to the specific customers you identified or does it seem like managing the product or the customers or both will be difficult?
If the answers to these questions are only a little negative, go back through the previous steps and do them again and change a few things in order to fix the problems. If the answers to these questions are very negative you need to kill this business idea and move on to a better one.
What is a brand? Well, it’s not as simple as just a logo. Your brand is what feel and think about when they interact with your business.
Where do you fit in the market? Is your product more reliable, cost effective, stylish, sophisticated?
What does you brand stand for? Do you take a stand on issues like the environment, healthy lifestyle, high end design?
Your brand name should reflect everything I just mentioned.
Remember to make sure that your name is available as a domain and on the major social platforms that you plan to use and remember to do a trademark search so that you get don’t get sued someone else that already owns the rights to the name.
Then, after all of this you can give all of this information to a designer to create your logo
8. Legal & Financial
Now this is different in every country, but the following items apply in almost every country.
- Decide on what kind of legal entity you want use – for example, do you want to operate as an individual or should you set up a company
- You will need to get a tax ID
- You might need a business license for your city
- Select an accounting system that integrates with your bank account and makes it easy for your accountant to do your taxes and create financial reports.
9. Marketing & Website
There’s a million things I could say about your marketing and website but I will summarize by saying that your website needs to everything required to execute your PAC strategy.
For example, if you decided to promote your product by offering a lead magnet to collect email addresses then convert people form your email list into customers over time then you need to create a site that can perform each aspect of this strategy.
10. How to maximize your impact
Create a product that has the maximum positive impact on your customer. You can do this by simply answering the question –
What features can you include in your product that will result in having a bigger positive impact on your customer?
Then communicate these benefits in your sales copy to your customer.
The question about what you can do to have the biggest positive impact on your customer is a little like the question about what features your product should have but customers love businesses that go above and beyond what is normally expected in order to please their customers. Asking this question from an MPI point of view makes it easier to identify the things you need to do to please your customer.
You can make a list of things that will have a positive impact on your customer then prioritize them in order of biggest impact to smallest impact. This list is critical. This list the product development schedule that will enable you to create the best possible product for your customer. This list is also the content for your sales copy because it outlines the things that matter most to your customer.