There’s a lot of literature out there that promises to teach you everything you need to do to start and grow a successful business. Though a lot of it is written by really smart guys who think hard about it, I think that a budding businessperson looking to start selling a product or service needs a little more direction. The problem I have with how-to business books is that they have a high probability of being written by someone who hasn’t actually started a business, but is really good at sounding like they have, or worse, written by someone who succeeded because they got lucky and think that their way of starting a company is THE way, a self-centered opinion which is likely to hurt someone trying out on their own for the first time.
I’ve included a list of a few invaluable entrepreneurial tools, along with a couple of thoughts on starting a company with almost nothing.
The frustration I have with these how-to books is that they tend to “talk about doing” rather than actual “doing”. If you are looking to get started and want to know some great first steps, I’ve laid out some of my favorite tools for starting a company on a shoe-string budget. I must note that this is not THE toolbox to use for every new company. Some things from the list below may not work for you and your venture. You are welcome to try them out or suggest any better options in the comments section.
Product
The one thing I’m not going to tell you is what you need to offer. That’s for you to decide. However, when considering if a new or retooled product is worth the effort of building a business around, look for these two critical characteristics:
1. It must add enough value to the customer that it takes no longer than two sentences to describe. One sentence is ideal.
2. It’s best to have a gross profit margin of 50% per unit. You can certainly go lower, but if it’s your first time starting a company, I suggest something that’s no lower than 40%.
Sourcing Manufacturers
Simply enter whatever it is that you are trying to see into Google.
Example: “Neoprene case manufacturers”
Start going through all the search results and simply email the manufacturers from the “contact us” page on their website. Just say that you are interested in what they have to offer and will be starting small (I usually say 5-10 units a month). They usually get back to you in a couple of days. It really is that easy.
Website: Facebook Page
Screw the website. Your business isn’t legitimate for one in two ways: 1) You should use the money normally spent on website development to fund cheap, iterative experiments to validate your product-to-market fit, and 2) your business likely doesn't have enough traffic in the first year to justify the monthly hosting costs. year. Go with a Facebook Page. It’s free, you can post pictures and links, create and share events, and easily converse with your market. Make a couple of your trusted friends “Page Admins” and have them suggest it to their friends on the site. Can you say insta-cult?
Payment System
Paypal. It’s free for everyone (both you and your clients) to set up. Your customers can link to their credit card or bank account. You can move money from Paypal to your bank account and vice versa. It’s great for billing because all you need is someone’s email address to send them a request for money. Keep in mind that, however, that there is a 2.9% transfer fee for you, so make sure to calculate that into your product costs.
Email
Gmail or Google Apps. If you own the URL for the website you’ll be building in a year, Google Apps allows you to add up to 50 email addresses for that URL. Example: travis@miniballer.com.
Server Space
Scheduling
Google Calendar
Phone Services
Google Voice or Jive Networks.
Online Collaboration
Google Wave.
Workflow Documents
LucidChart. These guys rock and I am a huge fan of their products – they’re pretty much all you’ll need for mapping your startup “strat-tigery”, and they’re free. Here is a link to the LucidChart site: http://www.lucidchart.com/
Logo
Just go to the art or graphic design department of the local community college and strike a deal with a starving, “misunderstood” art student. I had a lot of friends exchange design work for a Happy Meal. Just tell him he can use the design as part of his portfolio and that he can put the project on his resume.
Marketing
Send messages to your Facebook followers. Create a Twitter account and link it to your Facebook page. Update your status like crazy. Do a lot of giveaway promotions to get more people to “Like” your page and/or subscribe to your newsletter. You can also create an invite-only Facebook group for your top customers in which you release special promotions. Make sure you make it clear what a customer needs to do to be considered for an invite. You should also start a blog on Google’s Blogspot. A great way to promote your blog is by placing links to your articles on your company’s Facebook page. I recommend using Google Analytics to see how much traffic you are driving and if that has any relation to sales in order to understand how your market is reacting the brand that you are building.. Again, all of this is free.
Accounting
Quickbooks Online by Intuit. I recommend this over free/open source accounting system because it makes reporting for financial management and taxes a breeze. Just get the cheapest one. There I got through twelve startup tools without having to pay for anything. If you need more help, email me; my former CFO has her own tax and accounting firm that specializes in start-ups.
Incorporation
If you are reading this, then I assume you know absolutely nothing when it comes to legal entity stuff. Check out this YouTube Channel, [Usparkfoundrytv]. It walks you through everything that you need to know about what legal structure might work for your company and the respective managerial implications of the business entity at various stages of growth.. There are seven 5-minute videos so those who are ADD like me can easily pay attention. Make sure you comment on the videos. My friend Matt loves it when you give him feedback. To begin the incorporation process, go to earlystagelegal.com. You’ll pay about $500-$750 to set up corporate entity.
In my experience playing in Startup Land, every company that I’ve founded or helped launch has been using some mix of the tools that I listed above. They found it to be helpful, I’ve found it to be helpful and maybe you’ll be able to find it helpful. The point of this article was to share some of the tricks that I use to get a company running on almost nothing, not to tell you “how to do it.” Entrepreneurship is all about self-discovery. Telling you how to use them would pollute your own experience. These are simply my tools, feel free to use them as you find YOUR way of starting companies.
-Travis Corrigan
-Travis Corrigan
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