How To Start A Business From Scratch

Published by Mike Michalowicz (Google+)

I think there are two dreams everyone on this planet has. First we all dream of being a police officer and hittin’ the lights, when that jackass cuts us off on the highway. Am I right or what?

The other dream… Starting our own business. This is evident from the sheer number of businesses that are started, each year. But while the idea of hanging your shingle out for business sounds great, you may not be sure where to start. That’s okay. We have all been where you are, so here’s your wake-up call, Chief. Plus a little bit of advice on how to get it started.

The Straight Dope

Here is the dealio – everyone and your mother is going to tell you how great entrepreneurship is, and how much money you are going to make, and all that good stuff. While it helps to motivate you, there is more to it than that. Before I tell you how to start a business, let me first give you a big ol’ kick where it hurts by saying that entrepreneurship isn’t hard. No it’s not hard… It’s very mother-F’ing hard.

You have to understand that starting a business is going to literally drain your life. It is going to test your courage and make you curse more than you ever thought possible. In addition, as if you need more to worry about, it is going to really scare you, at times. But… if you stick it out, you will make it to the “other side” and get to experience the riches (financially, of course, but emotionally, as well).

Choosing a Direction

Okay, if you are still reading then I know you have been toughened up a little bit and are ready to hear how to actually get started. First, you need to examine yourself (not a self-physical, you weirdo, but an examination of your life). What is the one thing that gives you the most enjoyment in life? What is the one thing that, when you go out with friends, they start rolling their eyes because you won’t shut up about it? What is the one thing that, as you do it more and more intensely, actually gives you more energy, and gets you more excited?

Discover this, my friend, and you will have made the first and most important step toward starting a business. You will have found your passion.

Now, before all you naysayers yell, “Passion, smashion,” let me be the first to tell you that passion absolutely does not guarantee success in the business world. But what passion does give you is an essential key element to business success – persistence!

If you are passionate about something, that can keep the fire burning, motivate you beyond all belief, and give you a reason to continue building, brick by brick.

Now, having said all that, watch out for hobbies versus passions. Hobbies are those things that you like to do and they give you enjoyment, but they don’t build energy. Hobbies are an outlet, while passions are an addiction.

Expand Your Thinking

Next, it is important to understand that your business does not need to be a direct translation of your passion. You read that right, it does not. And, in all reality, maybe it shouldn’t. What your business does need to do is serve clients. That’s how you make money, and let’s face it, no matter how passionate we are about something, at the end of the day we still need to pay our bills.

Your business must deliver something that customers want. Maybe your passion is baking pies (which happens to be only a hobby of mine, but maybe a passion of yours). That does not mean you need to be in the pie-baking business. But it could translate into making bake ovens, baking pans, necessary ingredients, instructional videos and books, designing kitchens, or even making aprons. Do you see where I’m going with this?

Testing it Out

Once you know your passion and have multiple ideas on what you can do that the client wants, you need to test it out. The goal here is to start offering stuff to clients and see what they respond to. Remember, clients speak the truth with their wallets, not with their words. So watch for what clients are repeatedly buying and put your efforts on doing more of that.

If, on the other hand, customers aren’t buying, that is an indication that it is not something they want. If that happens, as difficult a decision as it can be, you will need to modify or ditch it. You can start by modifying it until they buy, or just stop doing it altogether.

And when you find out what customers are willing to open their wallets for, focus on that. Refine it, focus and learn to master that. Then you will be well on your way to the fame and fortune – or, at least, financial security – which your mother has been lecturing you about all these years.

By Mike Michalowicz, Author of The Toilet Paper Entrepreneur

Category: Managing Focus, The Kick In The Ass
Tags: , , , , , .
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  • Ken Siew

    Man now I know where you got your cursing from! The last section totally rocks – clients speak the truth with their wallets, not with their works. That’s why sometimes survey could be misleading (not always), because people say they would buy your products if you produce them, but when it actually happens nobody will open their wallets.

    It’s great to hear from a successful entrepreneur like you that building a business is really really really hard. Get rich right alright!

  • Mike Michalowicz

    @Ken – Yes… survey’s AND focus groups can be complete disasters. Real world proof (people actually shopping and buying) is the only thing that is 100% accurate. Wallets don’t lie.

  • John McNally

    Your right about passion giving you persistence Mike. 8) It’s that which provides the motivation to overcome the hurdles, setbacks and outright disasters on the way to success.

    I also wouldn’t trust customer ‘opinion’. Often they want something but are not prepared to pay the price. Only trust what their wallets are saying. ;-)


    • Mike Michalowicz

      @John – AWESOME POINT!!!! Don’t trust opinion, trust their purse strings.

  • Morgan

    I completely agree with John and this is also what Armando Montelongo teaches. Trust the opinions of people who have either gone through the same thing or have the dollar amount to back it up!

    Love this advice, it’s very candid and to the point. That’s what I like most about you, there’s no fluff! :)

    I especially like how you mentioned to either modify or ditch an idea if it’s just not working. Some people will try to go to such GREAT lengths to get their idea out there and sold and will end up hemorrhaging money because of it.

    • Mike Michalowicz

      @Morgan – The rule of thumb is to give an idea 90 days to get traction – if it is not working then change it or kill it. If it is working – then exploit the stuff that is working.