MY NEXT REQUEST OF CHAT GPT: Thanks for all your help Chat GPT! Would you now please use this as as the starting point and fully revise my little book on Amazon, "Daring Mighty Things-- The Simplest Way to Start Your First (or Next) New Business, DRAFT 8-24-2023 OF 3nd Edition using what I’ve posted on www.JohnWren.com back to 2004 as a resource.
Chat GPT, thanks for your help. If this is too long, take what you want and leave the rest, ok? If you want me to cut it, please tell me how many words. Here’s the book:
Daring Mighty Things—
The Simplest Way to Start Your First (or Next)
New Business, Project or Career.
Current Draft— 3rd Edition Before Chat GPT
August 24, 2023
2nd Edition
October, 2020
Still available on www.Amazon.com search for
“John Wren Daring Mighty Things Simple Way
1st edition published June, 1993
John S. Wren, M.B.A.
1881 Buchtel Blvd. #501
Denver, CO 80210
www.JohnWren.com
(720)495-4949 JohnSWren@aol.com
This is the current text of the 2nd edition my little book on business startup. It was first published in 1993 with several printings. Until a couple of years ago, I sold it through the Tattered Cover, had lots of positive feedback from readers, never a complaint. A version of this revised edition was serialized and published in the Herald Dispatch Newspaper in 2003.
Amar Bhide, Ph.D., Professor of Entrepreneurship at Columbia University (www.bhide.net) has said of the first edition “This is a very useful book for anyone who is starting a new business. I recommend it.”
The title Daring Mighty Things comes from the Teddy Roosevelt quote: “Far better is it to dare mighty things, to win glorious triumphs, even though checkered by failures, than to rank with those poor spirits who neither enjoy much nor suffer much because they live in the gray twilight that knows neither victory nor defeat.”
Your feedback and suggestions as I continue the revision process prior to publication in 2008 would be appreciated. I’m especially interested in hearing from entrepreneurs who would be willing to have me share their startup stories in the revised edition.
Thanks!
John
Introduction
My name is John. I’m a recovering MBA.
I say I’m a recovering MBA, because much of what I learned in graduate business school is deadly for entrepreneurs. Especially toxic to the success of a start-up is the big business approach to strategic planning, market research, and financing.
There are many books about how to write a business plan. These thick, complex tomes pontificate at the little guy just getting started; they seem to do more harm than good. And, there are lots of books about how to improve the operations of a business once the first few customers are sold. This little book is different. The focus here is how to get started from zero.
I believe that reading this little book would have saved me hundreds of thousands of dollars and a failed marriage. It is based on: 1) my direct experience working in a family business and as an entrepreneur who has started seven businesses; 2) the experience of hundreds of my consulting clients; and 3) the experience of members of organizations I founded--the IDEA Café, groups for people starting new projects, careers, businesses, or campaigns that I first organized in 1994; and Franklin Circles, peer support groups for entrepreneurs and small business owners that I first organized in 1996. And this experience is confirmed by the research findings of Dr. Amar Bhide.
This little book has two goals: 1) To help you start your first or next new business, and 2) To encourage established entrepreneurs to stimulate their own creativity by mentoring a new entrepreneur. It may also be helpful to you in starting a new project, career, or campaign.
All books are flawed. Teachers teach what they most need to know. That’s why I suggest a system of filtering what is said in this book through your own mind, possibly with the help of another entrepreneur who serves as your mentor, and that you join or form a group of others who are starting new businesses in a Franklin Circle or similar group.
The world needs your new business!
To understand my system for starting your new business, it is necessary to first appreciate the nature of business in a capitalistic, free market economy.
The world will always have government, big-business, and big-labor: government for those things individuals cannot do for themselves and big-business and big-labor because of certain efficiencies of scale. Unfortunately, the large scale of these three forms of bureaucratic operations leads to problems:
1) Efficiency comes at the expense of intelligence and creativity. The large organization has a tendency to get better and better at doing what eventually is the wrong thing.
2) Power corrupts. Governmental corruption is kept in check by our process of representative democracy. Big-business corruption is kept in check to the extent that the free market is allowed to operate. That is why big business hates competition.
The worldview of the bureaucrat is necessarily different from that of the entrepreneur. The steps recommended here for starting a new business will not make sense to most bureaucrats.
If you decide to work with a business mentor, it is important that you work with someone who subscribes to the following philosophy of business. This person almost always will be an independent business owner.
Beware of seminars about how to start a new business; the most deadly advice for entrepreneurs comes from bureaucrats, public or private, active or retired.
Yes, the world really does need you to create a new business!
There is always a shortage of entrepreneurs, that’s why it pays so well.
This shortage of start-up specialists is caused by two things:
1) The infinite power of the human mind to create new ways to help people.
2) People’s unlimited need for help.
Read today’s newspaper. It’s easy to see the world needs help. To the entrepreneur, these problems are opportunities in working clothes!
Each human life is a story told by God. The entrepreneur’s story is about doing Good Work. Good Work (E.F. Schumacher, Small is Beautiful, 1973) has three qualities:
1) Good Work helps customers by providing a necessary and useful product or service at a price they are willing to pay.
2) Good Work provides an adequate income for the entrepreneur and everyone involved in the business.
3) Good Work provides a path for personal growth. Starting a new business is the best form of adult education!
The word entrepreneur comes from a French word which means “to undertake.” The entrepreneur is a person who starts or undertakes and assumes the risk for a new business or enterprise. Entrepreneurship has been the vital catalyst to economic growth derived from three technological revolutions over the last five thousand years:
1) The agricultural revolution, caused by the invention of farming, which led to the first surpluses and the need for organized markets
2) The industrial revolution, caused by the invention of the printing press, which led to mass production and mass marketing
3) The current communications revolution, caused by the invention and continual improvement of telecommunications and the computer, and we have no idea where it will ultimately lead but we are just getting started!
Each of these technological revolutions created the need for entrepreneurs. New businesses are constantly needed to transform the new technology into new products and services. Because of the recent communications revolution, there are more entrepreneurial opportunities today than ever before.
Theoretically, the alternative mechanism for transforming new technology into new products and services is the planned economy. A benevolent dictator could, in theory, be much more efficient, but because of human nature the planned economy has never worked.
The competition of free market capitalism keeps any one person from becoming too powerful. History has demonstrated repeatedly that power corrupts. Despite its inefficiencies, competition provides more consumer benefits that the potentially efficient, planned system.
The planned system concentrates power and eventually corruption grows to the point that the system fails. In the free world, corruption is weeded out through the mechanisms of free
market capitalism and representative democracy.
Is there really room for another entrepreneur in the world? Yes! There are an infinite number of possible new businesses. The illusion of scarcity of opportunity is created by some bureaucratic economists. As Kenneth Bolding, a right-minded economist who taught at the University of Colorado, told me, “The problem is the economist’s pie-chart. There is no pie; there is just a bunch of damned little tarts!”
Disorder and Chaos—the Free Market Environment
The primary conditions that an entrepreneur finds in a free market economy are: friction, uncertainty, constant change, and disorder. The market is messy. Business is war.
Study the U.S. Marine Corps Book of Strategy (Warfighting, Currency Books, 1994). It suggests that victory in this sort of messy environment depends on character—intelligence, will, courage, the ability to take action under conditions of uncertainty, honesty, and strength of purpose.
The primary condition in business is friction. Friction is that which makes the simple difficult. Starting a new business with the approach outlined in this book is simple but very difficult.
Few people encourage a new entrepreneur. Relatives and friends are often afraid to offer encouragement because of their own fear of failure. Competitors usually do not give comfort or encouragement to a new competitor because of the fear of lost business.
The best market research can be misleading, and most new entrepreneurs cannot afford the best. It is a myth that people can accurately tell you whether or not they will buy your product or service; smart salespeople know that buyers are liars.
The only way to know if your product or service is going to sell is to sell it. Get to the market quickly. This is simple but very difficult. The opportunity that exists for you today may disappear in just a few weeks. If you see an opportunity, hundreds of others are probably seeing the same thing. Just as in war, there are the quick and there are the dead.
If you are unwilling or cannot make your first sale quickly with your personal resources, think of some other product or service, possibly related to your current idea. For example, publish and promote a newsletter or book instead of starting a consulting firm. Or, get a job in the direction of your dreams, waiting for the next opportunity as you continue to prepare. Timing is everything.
Sooner or Later, You Will Be an Entrepreneur.
With the downsizing of large corporations, we are now experiencing, nearly everyone will eventually be an entrepreneur. Charles Handy (The Age of Paradox, Harvard University Press, 1994) was the first to observe that the world economy is restructuring into a shamrock
with three leaves: core businesses with a very small central management that outsource nearly all work; millions of small businesses that provide goods and services to the core businesses and to each other; and temporary workers provided through agencies.
Looking back, historians may very well call this The Age of the Entrepreneur. A Gallup Survey found that 70 of high school students want to eventually own and operate their own business. Yet, many people still plod along in jobs they hate.
I suppose some people get trapped by the allure of the high paying corporate jobs that we read about in the newspapers, CEOs who earn millions of dollars a year. But how many of those big jobs are there? Not very many. Climbing the corporate ladder is like buying a ticket in a long-term lottery. Invest your life and wait 20 years. Someone will win, but it probably won’t be you or me.
Most new ideas don’t work, and luck is a big factor in any success. In a free market economy, the cost to society of any one failure is kept low because the free market encourages millions of entrepreneurs to take many small chances. Entrepreneurs take the risk because:
1) They want to make their work soulful (Thomas More, Care of the Soul, 1992) and they have a passion for their product or service. The psychological profile of the soulful entrepreneur is about the same as that of a Peace Corp volunteer.
Or
2) The entrepreneur has a burning desire to take their product or service to the marketplace and the boss just won’t listen.
Or
3) They want to make money. Most affluent people are self-employed business owners (Thomas J. Stanley, Networking with the Affluent, 1993). Many entrepreneurs have started because they eventually realized they were doing all the work and their boss was making all the money.
The risk of being an entrepreneur is much less than the risk of betting on a corporate or government career. The corporation or government can steal your soul with meaningless work and then terminate employment just before retirement. The entrepreneur controls his or her own destiny to a much greater extent.
The failure statistics for new businesses are misleading. A close examination shows that many of what are usually counted as failures in the statistics are actually a success for the entrepreneur. Often the “failure” is a stepping stone, preparation for the next new business.
When you hit a dead-end, adjust your objective and goals, then get to your next sale. This may be a job in the direction of your dreams. Getting a job at a coffee shop is the best training for starting a coffee shop.
Finding a job is easy for entrepreneurs, corporations want people who are proven entrepreneurs! Tom Peters in his “Tom Peters Seminar—Crazy Times Call for Crazy Organizations (Vintage Books, 1994) says, “Imagination is the source of value in the economy. It’s an insane world, and in an insane world, sane organizations make no sense.” Peters encourages companies to make every employee an entrepreneur. You’ll fit right in!
The Truth about How to Start Your Own Business
The Small Business Administration (SBA) propaganda and many bureaucrats posturing as new-business consultants say it is necessary to have a written business plan to be successful. Yet, successful entrepreneurs almost never have a formal, written plan before the first sale in their new business.
“Entrepreneurs have to resist the temptation of endless investigation and trust their judgment,” says start-up expert Dr. Amar Bhide. “How Entrepreneurs Craft Strategies that Work,” written by Dr. Bhide and published in Harvard Business Review, March-April 1994 may be the best short article ever written about the start-up process. It makes a strong case for the start-up approach suggested by me here: creativity and decisive execution.
Businesses, like everything else in nature, go through three stages: inception, growth, and decline. Anyone who has taken a business course is familiar with the sigmoid curve, the s-shaped line that is used to represent this process.
The key to success in starting a new business is to get to the first sale as quickly as possible. Growth occurs as the methods used to create his first sale are perfected and used as a cookie cutter to create growth.
Eventually, new technology and new competitors will bring companies to a natural end if they don’t recreate themselves during good times. The key to continued growth is the ability and willingness to reinvent the business. This process can be represented as a second sigmoid. Andy Grove, President of Intel in his book “Only the Paranoid Survive” calls this the inflection point. He says, “A strategic inflection point occurs when change is so powerful that it fundamentally alters the way business is done.” See http://www.intel.com/pressroom/kits/bios/grove/paranoid.htm
I’ve identified four phases on the path toward starting your first or next business with as little risk as possible, and to then foster your business’s continued success by working with a new entrepreneur to stimulate your own creativity. If you don’t know enough to skip market research and strategic planning, you are picking the wrong business. Pick a business that you already know inside and out because of your work experience or your experience as a customer.
The four phases of business start-up are:
Phase I—Open your mind to becoming an entrepreneur.
Phase II—Prepare to be in business.
Phase III—Be in business, just do it!
Phase IV—Keep growing or die.
Phase I—Open your mind to becoming an entrepreneur.
You have probably already decided to go into business for yourself (or to grow your business by mentoring a new entrepreneur) or you would not have read this far. But if you are still on the fence, or if you want ideas about what to suggest for your family, friends, and business associates who are undecided, here are some ways to get enthused about owning your own business:
A) Pick the right “parents.”
My dad told me he made the decision to be an entrepreneur when his aunt told him, “Whatever you do, be in business for yourself, even if you just own a popcorn stand!” And, of course, I made my decision based on encouragement from my dad. Very often entrepreneurs have a parent, other relative or close friend who is self-employed.
B) Associate with entrepreneurs.
If all your family and friends are all government and big-business bureaucrats, it will be more difficult for you to start your own business unless you make up for this short coming by developing a network of support for yourself. Keep your eyes open for entrepreneurs. When you meet one, try to have lunch and pick his or her brain. Most entrepreneurs love to talk about how they got started. Eventually, you will meet an entrepreneur who is willing to be your mentor.
A good place to find entrepreneur friends can be one of the monthly meetings of the IDEA Café, see http://ideacafe.meetup.com. I held the first meeting of what is now called IDEA Café Meetup in 1994. It provides a weekly meeting where new entrepreneurs and small business owners can meet and learn from each other.
For ongoing support of your growth as an entrepreneur, consider starting or joining a Franklin Circle. The format of each meeting is based on the first group started by Ben Franklin in 1727. Franklin called it “the best school” and Training Magazine agrees with Franklin’s judgment of what may have been his best invention. To learn more, attend and IDEA Café meeting, or see my website, www.JohnWren.com.
C) Practice green light thinking.
Our society places a high value on analytical or red light thinking. The elementary and secondary education system in this country, both public and private, tends to do a good job of teaching it and pounding green light, creative thinking out of us. The child comes into kindergarten with a natural sense of curiosity and creativity and then leaves 12 years later with much of it lost.
Rekindle your own creative, green light thinking. Read books on creativity. Attend the IDEA Café Meetup, or even better start a new one and lead it each month!
Become involved with the arts. Take a vacation. Get excited about life and all the possibilities! You no longer have to just sit in your seat and do your work like you did for the first 12 years of school!
The ongoing process of adult learning is critical to your ongoing success as an entrepreneur. Always take time to smell the roses!
Creative green light thinking in all fields comes from having adequate leisure time. Sometimes the best thing you can do for yourself and your business is to take a day off and share some time with God. (Ronald Rolheiser, The Holy Longing—the Search for a Christian Spirituality.)
Phase II—Prepare to be in business.
You may already be prepared to start your own business. The marker that indicates you are ready to go to Phase III, start-up, is having a clear objective and set of goals for getting your first check from a satisfied customer. Depending on where you are now, you may be in the hunt in the next few days, or you may need to take several months or longer to prepare.
If you already have your first sale, this book can be a useful way for you to continue your own growth by sharing what you’ve learned with a new entrepreneur (see Phase IV). Here are suggested steps to prepare you for going into business:
KNOW YOURSELF.
What do you really want to do? The better you understand yourself, the more likely you will be to pick the business that is right for you. But don’t get stuck; none of us ever achieve absolute self-knowledge. You will learn all kinds of things about yourself as you start your new business, and you can always change the direction of your new business or start over.
You may find that a personal journal is a useful tool in sorting out who you are and what you want to do. Also useful are many of the classes, seminars, groups, and therapy techniques. For the last couple of years I’ve attended a Socrates Café and have found it very helpful, see http://socratescafe.meetup.com and www.philosopher.org.
GET AN ENTREPRENEUR MENTOR. (In the first edition of this guide, I called this person a coach, a word that has changed its meaning since Coach-U started teaching mental health professionals therapists how to market themselves to business people.)
A good E-mentor shares experience and listens as you clarify your own thinking. A good E-mentor does NOT try to do your thinking for you! One good way to find an E-mentor is to use your network of friends and relatives to identify a successful business owner who might be willing to work with you. The IDEA Café can be a good place to develop new business friendships that can lead to your E-mentor. Or you may want to hire a business consultant to work with you.
If you work with a paid consultant as your E-mentor, make sure he or she has started a business other than his or her consulting practice, and that he or she understands the process of working with new entrepreneurs described here. Ask the potential E-mentor to read this book (if he or she has not already done so) and to give you their opinion of this startup approach before you agree to a second meeting.
Make sure your coach is optimistic and affirming, sincerely wants you to do well, and has good practical common sense. Husbands and wives have been E-mentors to some of the most successful people in history. Other spouses have ruined careers with their constant nagging and second-guessing.
Have a clear understanding with your coach about how you will work together. If you pick a bad E-metor, fire him or her and try again. Or go it alone. It is better to have no coach at all than to be hobbled by a bad one.
BECOME A LIFELONG LEARNER.
Approach being an entrepreneur as you would any other profession. Learn as much as you can in whatever way is most helpful to you. Talk with people, read, attend classes. Invest in your primary asset, yourself. One powerful way to learn more is to join or start a Franklin Circle; it worked for Ben in 1727, maybe it will help you! (For more about Franklin Circles email me at JohnSWren@aol.com withe "Franklin Circles" in the subject line.)
Study alone will not teach you enough. Every industry has its own secrets, things you’ll never discover just taking classes and reading books. Get a job in an industry related to your interests before you risk your money. Even low-paying temporary work or volunteer work can supply the learning needed to launch your new business. Again, the best way to learn how to start a coffee shop is to work in a coffee shop.
BEWARE OF BAD INFORMATION.
Fred Smith, the entrepreneur who started Federal Express, is sometimes held up as an example of the power of business planning and raising venture capital. The myth is that he wrote a paper at Yale about his vision for Fed Ex and then raised several million in venture capital to get started. That's true as far as it goes, but it leaves out some vital information.
Here is the rest of the story: 1) Smith also started a successful record company when he was fifteen, 2) Fed Ex grew out of a charter air business Smith started first, and 3) when he was twenty-one he got two things from his father who died when he was four—a letter encouraging him not to become part of the idle rich, and a check for one million dollars. So you can see he did not just write a business plan and raise the money, which is the way the story is often told.
CONTINUE YOUR GOOD EDUCATION.
The best preparation for success in business is a good, solid liberal arts education. The study of philosophy, literature, history, language, and abstract science is intended to provide general knowledge and develop general intellectual capacities, both of which increase creativity and enjoyment of life. A liberal arts education also enables and encourages lifelong independent learning, which saves the entrepreneur a fortune in seminar fees and wasted time!
Many successful entrepreneurs do not have a formal education beyond high school. Many, such as George Washington, Benjamin Franklin, and Abraham Lincoln, educated themselves through independent self-directed learning.
To facilitate your own independent self-directed learning, you may want to join with others who are interested in similar topics. Franklin Circles are one way to do this, once again, email me for more information at JohnSWren@aol.com. A great guidebook about leading or joining such a learning group is Malcolm Knowles, “Self-Directed Learning—A Guide for Learners and Teachers,” 1975.
LEARN TO BE AN OPTIMIST.
Looking at the positive side of life is a learned skill. If you don’t know how, ask one of your consistently cheerful friends how they do it, or read Martin Seligman’s “Learned Optimism”, 1991 or see his website http://www.authentichappiness.org.
PRACTICE THE MOST IMPORTANT SKILL OF TOP ENTREPRENEURS—SELLING.
Salesmanship has a bad reputation in our society because of the large number of clerks and other bureaucrats who resent the high earnings of sales people. The truth is, selling is a vital function in our free market economy. Nothing happens until someone sells something. That is why selling is the highest paid profession, next to entrepreneurship.
What is selling? Selling is causing others to do what is in their own best interest, but which otherwise he or she would not do. Selling uses the same techniques of persuasion as the scam or con game. The difference? The professional sales person makes sure that what is promised is delivered.
If you do not know how to sell, learn. Become a student of the profession of selling. Read books and magazines, take classes and seminars, talk with experienced sales people. But, it is not enough to just study.
To become a tennis player, you cannot just study tennis. You have to play the game. To become a good salesperson, you have to practice selling. Take a job doing telemarketing at night and on weekends. Find a job as a retail sales clerk, or become involved with a multi-level marketing organization. You will receive valuable training and experience, and earn extra money to use as capital in your new business.
If you decide to find a sales job, look for an employer who understands how to train new salespeople. Talk with past employees. Beware of the manager who doesn’t understand selling and just uses experienced sales people.
Some people say they don’t want to be involved in selling; they only want to do marketing. By marketing, these people usually mean advertising and public relations. The brightest advertisers understand that marketing is selling. Advertising is salesmanship in print. And public relations that is not carefully tied to the selling process is just a lot of sound and fury.
ACCUMULATE CAPITAL.
Save money.
In addition to cash, acquire other capital assets for start-up: a home you can use as an office, a good car, and a computer.
It is unlikely that a bank or venture capitalist will make a loan or investment with a new entrepreneur. You may be able to borrow from friends and family, but beware. As one successful entrepreneur has said, “raising money has become a disease. Entrepreneurs are wasting lots of brainpower scheming to raise money.” (From Amar Bhide’s “Bootstrap Finance: The Art of Start-Ups”, Harvard Business Revue, November-December 1992. This excellent article is based on a study of 100 founders of successful businesses. It found that most start-ups lack all or most of the criteria investors use to identify big winners: scale, proprietary advantages, well-defined plans, and well-regarded founders.) Successful entrepreneurs just do it!
Having too much money can be a serious handicap for a new business. Too much money can lead to complacency and buffering of the business from the reality of the market. Raising money from others locks you into plans that may turn out to be wrong. So, bootstrapping is the best strategy for the first-time entrepreneur.
If you are in the fortunate circumstance of having plenty of cash, invest it in your new business, invest it in yourself, or invest it in helping another new entrepreneur. Or wait. Take a job in the direction of your dream and wait for the right opportunity.
OBTAIN & MAINTAIN A FIT, READY CONDITION.
The foundation is being fit. An important part of this fitness is spiritual conditioning that connects us with a power greater than ourselves. For me, that means: 1) setting aside some time each day for prayer and meditation, 2) being part of a fellowship that follows a similar program, and 3) meeting with someone from time-to-time to check out progress.
Physical fitness for me means getting at least 20 minutes of exercise on most days, even if it is just taking a long walk. Mental fitness is recognizing insanity when it crops up in my life and then doing something about it. Insanity is doing the same thing again and expecting different results.
Fitness is necessary to get started, and it is necessary to keep going. When I hit the wall and cannot go forward another step, it is time for me to regroup and go back to these basics. Nature forces me to pay attention. God whispers to us with pleasure and shouts to us with paid. Death is just nature’s way of saying to slow down!
DEVELOP YOUR MOST VALUABLE ASSET, A CLEAR OBJECTIVE AND SET OF GOALS.
Every business starts with one person’s imagination. An idea eventually becomes a clear objective and four or five goals for accomplishing that objective. For most people, this transformation is a messy, painful process.
The core idea for the new business usually comes from work experience. Or it comes from life as a consumer—hobbies, doing chores around the house, shopping, or playing games. The right idea for you won’t require a lot of research because it comes from your direct experience. Idea minnows that eventually grow into successful businesses are usually found in oceans, not fish-tanks. Researching trends doesn’t really help. The trend may be against restaurants, but a particular restaurant at a particular time in a particular place may be a great idea. Work hard, play hard, and watch for the great white minnow.
Screen your ideas quickly. Look for an idea that is easy and cheap to implement and that will result in a profitable business. A profitable business for a new entrepreneur with limited resources has clients who: 1) buy enough on the first sale to create a good profit, and 2) who make repeat purchases. For most first-time entrepreneurs, this means you will be selling to businesses, or forming strategic alliances that help you make the connection with the consumer.
It is best to start your first business doing something you know inside and out. This knowledge comes from your first-hand experience as a consumer or on the job. This intimate knowledge gives you the confidence to take action based on a hunch.
Phase III—Be in Business—Start-up!
Just do it!
You are in business once you have a passionate belief in an objective and set of goals that define what you are going to do for your future customers and what you want in return.
Usually the successful entrepreneur does not have a written plan beyond this simple objective and set of goals, what I call a strategic intention. At startup, a full-blown, formal strategic plan is a handicap because: 1) writing it wastes time you could be using for selling and operations; and 2) you become a slave to the written plan and lose the entrepreneurs advantage—being able to rapidly adjust to the reality of the market on a daily basis. I call the date you first have this strategic intention the Aha! Date for that business or project.
Each morning, plan your day based on the most current version of your strategic intention, your objective and goals. Make a list of the five most important things you can do that day to advance toward your objective. Every few days, review what you’ve accomplished, think about what the market is telling you, and revise your strategic intention. If you go in a new direction and change the objective, change your Aha! Date.
Sell Your First Customer as Quickly as Possible.
The successful entrepreneur combines analysis with action. Selling is always the primary job of the successful entrepreneur, from the first sale to the end of the entrepreneur’s involvement with the business. (See my Power Steps for Creating New Customers in 14 Days or Less.) Selling is pay-as-you-go market research. Write about what you learn in your journal.
Talk with your mentor, or find someone to mentor yourself. Now that you are in business, you may meet someone who recognizes the value of your fresh experience. Being a mentor is a great way to make what you have learned permanent. Share what worked, and share what did not work. Those who don’t remember their mistakes are destined to repeat them.
Set Up a Business Checking Account.
After your first sale, set up a business checking account and deposit your first check. Hire a good CPA (and a good attorney if your CPA thinks you need one). Let them deal with the government for you, and make sure you understand fully what they are doing for you. Ask questions. Good accountants and lawyers are good teachers. But don’t expect them to know whether or not your business idea is worthwhile, the market renders the final judgment.
Big time-wasters for the new entrepreneur, especially during this start-up phase, are the short seminars conducted by groups such as the SBA, SCORE, Small Business Development Centers and Chambers of Commerce groups. You may want to go to these seminars while you are preparing to go into business, and during the growth phase of your business. During start-up, you are much better off working directly with a good accountant. Guard your time carefully during this critical phase.
Form a Team of Advisors.
Eventually, you may want to form a board of directors (if a corporate business form was chosen by you and your accountant) or a group of advisors to help shift from the start-up to the growth phase of the business. The best group includes your accountant, attorney, and banker. You may want to continue working with your mentor, but only if it is clear that the work will continue to be of benefit to both of you.
You may also want to hire a sales consultant after your first sale or two. A good sales consultant will be able to help you convert what you’ve learned making your first sales into a polished system. The system will make sure you are working smart, and it can be used to duplicate yourself through other sales people.
Hire other specialists as needed to help you build a website, do advertising, get publicity, etc. Always have a clear understanding of what you will get, what it will cost, and when you will get it. It is usually a good idea to have this understanding in writing, which can just be a simple letter or memorandum that lists who is doing what.
Continue listening to what the market is telling you. Advisors can help you with the mechanics of your business, but they can never tell you how to best meet the needs of your market. No matter how much you tell your advisors, they will never know as much about your business as you do. Only you can see the complete picture, so only you can make the final decisions about your business.
Phase IV—Growth
After you have started, grow after tax profit as fast as you can, consistent with what you want. Businesses are like anything else in nature, they grow or they die.
Be ready to sell or abandon your business, especially your first business, if it is not meeting your needs. One entrepreneur who has started over twenty successful businesses told us at an IDEA Café Meetup that he knows it is time to sell when he stops having fun.
Do Just Enough Planning
Continue the process of having a clear objective and set of goals. Stay flexible. Expend the time and money to write a formal business plan in this phase only if:
* You are forced to raise capital from investors or lenders, or
* You have employees you do not directly supervise, or
* You want out and the plan will help you sell the business.
Large companies are forced to do formal, strategic planning. The fact that you do not have to waste time with this very time-consuming process is one of your biggest competitive advantages. You have a strategic planning conference each morning when you plan your day and review your objective and goals. Write down as little as possible, so it is easy to change direction quickly based on new information.
Reinvent Your Business to Keep it Growing.
All businesses eventually become mature and go into decline as new technology becomes available and new competitors come into the market.
Today this decline starts very soon after start-up for most businesses because of the incredible information/communications revolution we are experiencing. Reinvent your business by going through the Phase II—Preparation and Phase III—Startup steps again.
One way to get out of the rut and stimulate your own creativity is to go through these steps again yourself as you mentor a new entrepreneur.
Passing on your experience reinforces your own learning, and it is an invaluable source of information and inspiration for the person who is lucky enough to work for you.
Finding a new entrepreneur is not difficult. Friends or relatives will come to you once they learn you own and operate a business. Or, you may meet a new entrepreneur at the IDEA Café or other business organization.
When you find a new entrepreneur who is interested, set a time to meet on a regular basis until he or she makes the first sale and forms a group of advisors, which may or may not include you. On your first meeting, explain that you are agreeing to be a coach for your own benefit, to stimulate your own creativity and as a tool for your own learning.
Promise to share your experience as honestly as you can, to act as a sounding board, and to give encouragement not advice. Keep things very simple, and help the person find their own answers by being a good listener. Try to limit what you share to your own direct experience during the start-up of your business.
Hire a Potential Entrepreneur as Your Assistant.
Working with family, friends, and other potential entrepreneurs can be one of the great benefits of owning a business. If you don’t have a family member you can work with, it’s easy to find others.
Your assistant-to takes part of the burden of detail from your desk which allows you to spend time training him or her and reinventing your business. Limit time in the assistant-to position, from 6 to 18 months seems to be best. If your assistant-to isn’t ready to launch at the end of that time, put him or her into a line position in your company.
Working together you both benefit: explaining your business helps you see it through fresh eyes; and the experience of working with an experienced entrepreneur is invaluable for your assistant.
My first job after graduate school was working as the assistant-to-the-president of an entrepreneur. Later, I taught the “Assistant-to Seminar” for the American Management Association with Victor Phillips, author of “The Organizational Role of the Assistant-to.” Phillips had done his DBA on the Assistant-to after getting interested in it when he was teaching at the Air Force Academy. Using the assistant position for training is a very common practice in the military (aide de camp) and with some large organization.
You may want to make part of your assistant’s compensation package help starting his or her own business. Maybe you can become his or her first customer. Or you can help by providing some of the capital for the first business in the form of a lump sum payment or gift (usually the best for both of you) or in the form of a loan.
Conclusion
Starting a new business is very simple, but success is very difficult. Success depends primarily on character, personal resources, and making an endless series of difficult decisions quickly that result in effective action. Luck comes to the prepared.
Know when to pick a new direction (see Seth Godin's The Dip http://sethgodin.typepad.com/the_dip/) and always do the work you love. The biggest problem with our society for the last 50 years has been retirement. The best and brightest too often cash out and die young. Humans are designed to wear out not rust out. Plan on constantly reinventing your work.
Follow your passion. Be open to all the possibilities. Maybe you will be led to work with the poor, run for political office, or teach small children. Your happiness and the welfare of society depend on you and me doing something, even if we just own a popcorn stand.
Appendix I—Creating New Customers
Also,
Chat GPT, please write a replacement for Aendix I, focus on social media and the use of AI in getting new customers for a new business today. Thanks.
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