How to Launch a Business Without Quitting Your Day Job
Most would-be entrepreneurs start with a business plan. Which is the last thing you need.
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An old friend of mine called me earlier today to discuss his new business idea. I spent a couple of hours helping him flesh it out and create an action plan. However, like most would-be entrepreneurs, he had his priorities mixed up.
When most people want to launch their own business, they start by writing a business plan. Unfortunately, business plans are pretty useless in the early stages you won't yet know enough to write a meaningful one until after you've launched your business.
Why do the obsession with business plans? It's not because you need one to get investors because--surprise!--investors aren't going to believe your plan without proof of concept, unless you've already got an established track record.
The real reason, I suspect, is that writing a business plan is a low risk, no deadline activity that can be accomplished in one's spare time. It therefore allows would-be entrepreneurs to remain in their day jobs, while still pretending that they're moving the ball forward.
Rather than write a business plan, it usually makes more sense to launch a stripped-down version of your business to create proof of concept and to learn what problems you'll encounter going forward.
As an added benefit, this can usually be accomplished without quitting your day job. Here's how:
1. Define and execute the barest minimum.
You may be bursting with ideas and ecstatic about the possibilities, but you've got to focus on the basics: 1) what is our product, 2) how will we take orders, and 3) how will we fulfill those orders. Everything else is bullsh*t until you've got the basics in place.
In my friend's case, he wants to sell a customized product. While he wanted to talk about getting endorsement and extending the concept to other product categories, what he really needed at this point was: 1) the basic product, 2) a way to order it on-line, and 3) a manufacturer who can customize and will drop ship the product.
In most cases, assembling the bare minimum will be about the same amount of work as writing a detailed business plan. More important, the spare time that you spend executing the basics actually launches the businesses, rather than just define it.
2. Do some easy but effective marketing.
Given any business, there are probably "n" number of things you can do to market your product. The trick in the early stages is to only do a few marketing activities that will have an outsized effect compared to the amount of effort involved.
Here's how to prioritize your early-stage marketing:
- List out every possible way you could market or promote this product.
- Assign every activity a number (1-10) where "1" is easy and "10" is difficult.
- Assign every activity a number (1-10) where "1" is cheap and "10" is expensive.
- Assign every activity a number (1-10) where "1" is "if successful, will get a lot of customers" and "10" is "if successful will maybe get a customer or two."
- Assign every activity a number (1-10) where "1" is absolute certainty you can do this and "10" is highly skeptical you can pull this activity off.
- Now add up the numbers for each activity.
- Throw out the bottom two thirds.
- Execute the remainder in ascending order (starting with the lowest number).
I realize the above sounds simplistic but--believe me now or believe me later--you're vastly upping the likelihood of success if you just do minimum marketing at this point.
3. Assess and pivot as necessary.
Yeah, I know that the term "pivot" is biz-blabby but it's convenient here so I'll go ahead and use it. At this point, you either have 1) a viable business that's got some cash flow or 2) your business isn't working out. If it's viable, jump to step 4.
If your business isn't working out, do not fall into the trap of thinking that if you spend more time and money on marketing, you'll start getting customers and it will be successful. It won't and you'll just be throwing good money after bad.
Instead you've got to step back and take a hard look at the basics (step 1) and make changes so that the easy-peasy marketing (step 2) starts creating some revenue.
4. Grow your customer base.
Now that you've got a miniature business running and you've learned how that business will actually work, figure out how to sell more. In most cases, you'll find that doing more of "what worked" (step 2) will create more new customers than trying to execute the remaining list of marketing activities.
For example, my friend knows a lot of celebrities so one of the easy-peasy marketing tasks is to get endorsements on Twitter. He originally wanted to jump right into this, but I advised him to wait until he had the basics in place. That way, the tweets would drive traffic to his site.
If those endorsements drive traffic that converts to customers, then I would advise him to go for more endorsements rather than, say, worry about Google ads or brand extension.
5. Quit your day job.
6. Write a business plan.
BTW, if you follow the previous five steps you probably won't need a business plan anyway. The main thing is to take action and start small. That way you'll be worlds ahead of most other folk who want to start a business.