Starting a business is a daunting endeavor, especially if you don’t have investors or $1 million to finance it with. But if my wife and business partner and I are any indication, it is possible. We’ve built six businesses from the ground up, making mistakes, learning lessons and amassing a wealth of tips and tricks along the way. If you, like Kailene, are a bootstrapping entrepreneur looking to start your own business, read on for my three key insights all fledgling entrepreneurs should know.
1. Don’t ask, ‘What should I be doing?’ Ask, ‘Whom should I be serving?’
This is the No. 1 mistake new entrepreneurs make. They focus on themselves, asking, “What should I do?” At Brand Builders Group, we tell our clients to ask, “Whom should I be serving?” If you can get clear on the “who” first, it automatically creates both purpose and clarity. The “who” informs, instructs and designs your entire business model for you.
Once you answer who you serve, the next questions (and their accompanying answers) will begin to appear:
- Whom do I serve?
- What do they need?
- What can I give them?
- How much time and money will it take to give them that thing?
All of this flows right out of that one simple question: whom should I be serving?
2. You need customers more than you need revenue.
Don’t get me wrong—It’s not that I’m against revenue or making money. But you need customers first. Your first customers provide a training ground. They give you the opportunity to practice and try out your service, product, or idea on them.
Most importantly, your first customers will (hopefully) provide testimonials. My wife, AJ, recently led a study at Brand Builders Group that looked at the current trends in personal branding. 62% of Americans said that the number one most influential factor in their decision to pay for a product or service was whether the brand or company had testimonials about their work. Even if you have to give your first customers free services, it will have been worth it if they are willing and able to speak to the quality of your work.
The early days of any business are simply practice; you need to time build systems, processes, content and confidence. Focus on finding customers and providing an excellent experience first, and then, in time, the revenue will come.
3. You need referrals even more than you need customers.
Although it is important to find customers, it is even more important to find referrals. For any entrepreneur without investors or millions of dollars, these referrals will likely come from your friends and family. However, in order to get these referrals, it is important that you don’t barrage your friends and family with endless sales pitches.
When you sell to your friends and family, you often burn out the tolerance within those relationships. It becomes almost awkward for you to approach them, “Here they go again, selling us their product.” It will be way more effective (and less damaging to your relationship) to ask your friends and family for referrals first.
Make a list of every person who trusts you. Then, call those people and explain what you’re doing. Say, “Hey, do you mind if I take a minute to update you on this new business I’ve launched?” If they say yes, tell them what you’re doing and ask if they would be comfortable introducing you to others. As a bootstrapping entrepreneur, referrals are so much more valuable to you than the single sale a friend or family member might provide.