Going_Solo

Thinking about going out on your own? Or have you been a consultant, coach, sole proprietor or entrepreneur for most of your career? Either way, this page is for you.

As a good friend says, "if it were all that easy, more people would be doing it." In this section I'll do my best to share everything I've learned in 20+ years of being an entrepreneur. Some start-ups worked beyond my wildest expectations, some crashed and burned. And I learned more with every experience.

Getting Started

You've got this really great idea. You're sure it'll be a big hit, you just know it. OK, then:

- What problem are you solving? The answer is not "I designed this really cool website/chip/program." The answer will tell you why people will spend money on your product or service. People pay money to fix problems. Outside of Silicon Valley, very few of us buy technology for the sake of technology. Honest.

- Who's going to buy this? I'm giving you an F right now if you answer with the typical business plan yada yada, "The population of the US is approximately 304,000,000. If just 1% bought our products/services..." That's not an answer; it's lazy thinking. What does your customer look like? If you're selling to consumers, describe them as precisely as you can: age, gender, nationality, race, education level, income, where they live. If business, do the same: sector, industry, where they're located, size (revenue and employees), ownership, and so on.

- What are your customers telling you? What do you mean, you don't have customers? Get out there and sell something. Anything. Just sell it. Then get feedback. What worked? What didn't? Sell another. Get more feedback. Having real customers will focus you faster than anything else I can think of.

No Disrespect to MBAs Meant But....

....ditch whatever your professors told you. Unless you studied under someone with entrepreneurial experience, they don't know what they're talking about. Books are great--I read 4-5 a week--but reading is not the same as doing.

Don't waste time with a big, fancy business plan. Do get something down on paper, if only so you can work through your ideas and communicate them to others clearly. You need to be clear about what you're selling, but that will evolve with time and business plans are not the same as the business.

Do some rough calculations on the back of envelope: how many widgets can you sell? How much can you sell them for? Can you live on the net after you've paid all your business expenses? If you can't, can you make more widgets? Can you charge more for the widgets you are selling? No? Then how in all this green earth are you going to make a living?

Selling in a Tough Economy

I'm an optimistic realist--I think downturns provide fabulous opportunities to start businesses, but I also believe that to ignore economic reality is to doom yourself to failure. What we're going through now may well turn out to be worse than the Great Depression of the last century, but that's no excuse not to get off the sidelines and get into the game. Your strategy and plans need to adapt to today's reality, that's all.

Find ways to add value for your customers. Build a personal relationship with the people who buy what you have to sell. Go out of your way to help them in little ways. In tough times, customers respond to being treated with respect. Become a person you'd like to do business with.

Don't give the shop away. The temptation when you're starting out is to give away seats in webinars or workshops, take on customers who won't pay, and speak--for free--in front of any group that needs someone to fill up 10 minutes on a program. It's one thing to test new products or services; it's another entirely to run a charity. Don't confuse the two.

Price your products high enough that you can make a living and low enough that they sell. Don't know how to do that? If a little research can't give you the answer, then here's another way to look at it if you sell services.

- Figure out what you need to gross each year to live. Say you need $80,000.

- Assume you'll be spending 50% of your time on non-billable activities (travel to/from meetings, administrivia, sales and marketing, etc.). If you assume you're working a 40-hour week, that means there are 2,080 work hours in a year. So you have 1m040 hours to earn that $80,000 you need.

- Do the math. To keep it simple, assume you can spend 1,000 hours on revenue-generating work. That means you need to be billing $80/hour. So you'll have to price your work accordingly. Now check with your customers. When they ask "how much?," take a deep breath and quote them a price. If you don't hear an "ouch" you aren't pricing high enough; when the next customer asks, raise your price. Still no "ouch?" Then keep going up, customer by customer, until you find the ceiling.When you do hear "ouch", do one more thing to test this ceiling. Start talking about the value you add. (Note: not what you do, but how your customer will benefit if they use you.) If that removes the ouch factor, you've learned two things: you're still not pricing high enough. And you've got to work on your sales message.Stay tuned--more content coming as the muse (and mood) strike....