When I started my career as an entrepreneur, my office was so small that when a visitor arrived, my wife, who was also my secretary, would have to leave the room. We had just enough space for two chairs. My only capital when I started Trans Pacific Traders in 1946 was my accumulated military pay. What I did have was a willingness to research, find opportunities, and make deals. Fancy furniture and a large office would have to wait.
I'm often asked if it was harder starting a business 67 years ago than it is today. My answer is no. Starting a business then versus now is about equal in the degree of difficulty, just different. The rise of the internet is one of the biggest changes. Web access allows entrepreneurs to more easily reach mass markets, as well as targeted market segments, with the ability to monitor results immediately. In contrast, when I completed my first deal to sell army surplus wool material to a Chinese buyer, my samples went by boat and took three weeks to reach the customer. Today, a company's samples can reach almost any destination in the world in 24-48 hours.
I'm a firm believer that all business is personal, and here, the internet can work both for and against the budding entrepreneur. It is absolutely vital that new entrepreneurs start developing relationships at the very outset of a deal. If all they do is trade emails and negotiate prices, then trust and loyalty are unlikely to build. Repeat business is far from guaranteed. Where the internet can help develop relationships is by offering the customer vital metrics and by supplying a customized approach with rapid feedback. Information about sales patterns and targeted promotions are valuable tools for success, and the more information the dealmaker can provide to the customer the better.
In my most recent book, The Evolution of an Entrepreneur, I included 50 of my best business tips culled from seven decades of successful business experience. The book's emphasis is on long-term success and actions that can be replicated with a variety of business types. However, in this article, I would like to share five strategies that are especially related to the initial phases of a start-up.
Number 1: Eliminate unnecessary start-up expenses such as office rent. Until profits develop, make do with the living space you have. For example, the cost of your internet connection can be shared between personal and business use. Another way to shave costs is to rely on freelancers to help with accounting, customer service, website and graphic design, order fulfillment, etc. This allows for natural expansion and contraction for most of your initial development needs.
Number 2: Your first deal must be based on a specific market need and not just a general one. Your business plan should be as detailed as possible in order to target exactly the right customers. In other words, know who your likely buyers will be. If you can't get past identifying a general audience, you will be wasting precious time and money. Many start-ups won't be able to survive this mistake. I can't say it too many times: do your research before you invest a dime. Your best bet is to garner early sales with prototypes if need be; they provide you with proof of concept and prepare you for embarking on an even larger scale.
Number 3: Structure your first deals so that some money comes at the outset, and be sure to put this in writing. Obviously, cash flow is crucial in the beginning stages, and you can make this more likely by offering new customers discounts as well as incentives to pay in a timely manner. Growth is the key to any start-up, and your sacrifices and sweat equity now will pay many dividends later.
Number 4: Think about raising your company profile by aligning with a charitable cause or mission. Community fund-raisers might provide excellent opportunities to gain brand recognition, and allow you to see firsthand how your local audience reacts, giving you the freedom to hone in on your message before reaching for a broader geographic customer base. Free or sample products and discounts provide valuable advertising and a positive reason for customers to seek you out, as well as give you invaluable input on your initial offerings. And speaking of free advertising, tell all your family and friends about your new business venture. Enlist their support to establish your presence in the local community and beyond. There might be unexpected connections or contacts you'll uncover during this process that may surprise you, or lead you to someone who may be useful during your developmental phases.
Number 5: Make the most of helpful low-cost and no-cost resources. By all means, work with a lawyer, but don't overlook the value of the 900 Small Business Development Centers or 340 SCORE chapters spread across the country. Their experienced consultants and mentors are ready to volunteer their time to assist you. Also, be sure to explore my website. I've included my critical thinking framework for developing a successful business. Called the "Nadel Method," it offers entrepreneurs a simple yet effective methodology aimed at providing a clear process for starting and qualifying a prosperous venture.
Other sources to consider consulting when planning a new business venture are websites related to franchises for sale. While you are motivated to be your own boss, you shouldn't ignore opportunities for free information. Three sites to consider are the National Franchise Association, the International Franchise Association, and Franchise Gator. Here you will find various franchise opportunities, some of which may require only small amounts of capital, but carry an already established brand name and business model. If nothing else, a visit for more information could yield helpful ideas and details about start-up costs for various sectors of the economy.
Above all, embark on a start-up you are truly passionate about and don't be intimidated by the big guys. Remember, being small means you can be more nimble. As a start-up entrepreneur, you don't have a corporate structure to slow down the process of refining and adjusting your business plan. And not having heaps of cash can actually be a blessing. Creativity is at the heart of any successful enterprise, and nothing makes you more creative than having to think up ways to stretch your start-up dollars to the max. Take it from me, someone who has "been there, done that" with a seven-decade track record of profitability to prove it. One of the greatest challenges an entrepreneur can face is self-doubt. Tapping into self-motivation is key for success from the get-go, and more valuable to an entrepreneur in my opinion than unlimited funds.
Jack Nadel is the author of the award-winning book, The Evolution of an Entrepreneur: 50 of My Best Tips for Surviving and Thriving in Business (www.JackNadel.com). He is the founder and chairman emeritus of Jack Nadel International, a global leader in the specialty advertising and marketing industry. Jack, founder of more than a dozen companies worldwide, is also the author of other books, including, There's No Business Like Your Bu$iness, How to Succeed in Business Without Lying, Cheating or Stealing, Cracking the Global Market, and My Enemy My Friend.
E-mail: Jack@JackNadel.com.