How To Start a Business in 8 Steps

Full Transcript

 

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Welcome to the Good Business Podcast. My name is Chris Edwards and I believe that businesses should be good for people, planet and the profit line. It’s called the triple bottom line.

 

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I’m on a mission to find the greatest minds, inspiring entrepreneurs, change makers and experts to teach you and me on how to create a good business. According to one study in America, roughly three in five people, that’s 61% have had an idea for studying a business and around a third, 34% have had more than one idea. But an overwhelmingly majority of these people, 92% in fact, didn’t follow through with turning their idea into reality. 

 

But turning a dream or your business idea into reality is a lot of hard work, so it’s not surprising. So this episode today, what I wanted to share is how to start an ethical sustainable business in eight steps. It’s actually something I’m doing right now because it’s not limited to new businesses. 

 

If you are expanding into a new market or considering expanding into a new product line, these steps can help you prepare and make the best decisions for your business success. Right now at Honeycombers, we are looking at expanding into new markets. And so we are going through this process as we speak. 

 

So let’s jump into this episode where I’m going to share eight key steps to create a good business. So number one is identify your niche. So before diving headfirst into a new venture, it’s really imperative that you identify what is your niche. 

 

So how you can do this is really reflect on your strengths and your passions and your areas of expertise. What unique value can you

bring and really understanding this niche will help you really stand out from a crowded market, but also make sure that you’re offering something that is really unique and going to attract the right people. So thinking about this and reflecting on this for my business Honeycombers, we started that business 15 years ago. 

 

And yeah, it’s really interesting. 15 years ago, digital marketing or digital media, sorry, didn’t really exist. So it was 2008 that we launched. 

 

And actually, iPhones had only launched the year before. And Facebook wasn’t really a thing like I think Facebook had launched in the US in 2007. So we were very new in this frontier of digital media. 

 

And that really helped provide the whole business with an edge, because it was a niche that we had owned really before anyone else. And that actually gave a lot of, I suppose, real core benefit to my business and really set us apart. So that’s the first thing is identifying your niche and really doing some soul searching around what it is that you are going to be an absolute expert on that’s different, what’s the unique value you can offer. 

 

So number two is I really recommend that you go through the business model canvas, it’s a template that you can get online. And it goes through nine things you should consider. And it really makes you write out the these elements. 

 

So it’s, it’s a strategic management template used for developing new business models, and documenting existing ones. So the nine areas that it will ask you to document are things like customer segments, your value proposition, your channels, your customer relationships, your revenue streams, your resources, your key activities, your key partnerships, and your cost structure. So it’s a really great tool. 

 

And it’s just a one pager. But the business model canvas is something you absolutely should do. And it’ll just challenge you to think through all the different strategic elements of your business. 

 

So number three, probably should be number one, but number three is mindset. So we are hardwired as humans to try and make things as certain as possible. We’re actually hardwired to move towards certainty, you know, it’s part of our DNA and part of our human makeup. 

 

But entrepreneurship, you have to feel comfortable leaning into uncertainty. So you need to be able to take steps where you’re not really sure. And that’s okay. 

 

I really love this quote by Reed Hoffman, who is the founder of LinkedIn. And he says that I believe starting a company is like jumping off a cliff and assembling the plane on the way down. So your willingness to jump is your most valuable asset as an entrepreneur. 

So it’s a really big mindset shift from feeling certain all the time to really embracing uncertainty. And I think mindset is probably the biggest challenge lots of entrepreneurs have. And it’s a constant battle. 

 

Like it’s, you know, I’ve been an entrepreneur for over 15 years and it’s still a battle. It’s a still a battle to feel comfortable knowing that, you know, there’s no right answers. That’s just the very best answer you can make at the time. 

 

So entrepreneurship is not for everyone. And even doubling down your business or expanding your business or, you know, taking on more risk is not for everyone as well. Number four is, and I love this one. 

 

And I got this tip from Mikey at Epic Angels, stop writing business plans. So you need to be able to move faster than what a business plan will let you do. So you do need to do some critical thinking. 

 

And that’s why the business model canvas is excellent. But a detailed business plan, it takes so long. And it’s really an outdated way to think about a business. 

 

Even investors don’t need to see written documents like business plans anymore. And it’s mainly because everything’s moving so quickly. So for me in my business, I don’t write plans, I just do budgets. 

 

And I just put a budget together of here’s my forecast, here is how I think it’s going to work. And here’s why. So that was a really great tip from Mikey. 

 

Another one from Mikey, she came and actually spoke at Launchpad, and she spoke about how to validate your business idea. And she had lots of great tips about what you need to do before you start a business. But the other phrase she used, which I’m stealing from her is number five. 

 

And that is get out of the building. Okay, so what she means by this is don’t just do desk research about your idea or your concept. You really need to go out and test whether your concept is any good by doing field research. 

 

And this is how you validate your idea. So there’s three things that your research needs to check. Number one, it needs to check that your new product or your new offering, that there is customer desirability. 

 

So that means do customers actually want it? And you need to fall in love with the problem, not fall in love with a solution. So just think about that. I think that’s a big one that lots of entrepreneurs get wrong. 

 

I think we all fall in love with what we are selling, as opposed to falling in love with the problem we are solving. And that is, is there a real problem that our customers need to solve right now? And are they willing to spend money to solve it? So that’s customer desirability. The next one is business viability. 

Can you produce the solution and make a profit with that production process? Okay, so that’s business viability. And then technical feasibility. Do you have the skills to make it happen? Can you actually bring this business to life? So they’re the three kind of things you need to validate or to test. 

 

And the best way to do it is to get out of the building and go out into the field and actually talk to your prospective customers, not your friends and family, but actually strangers you don’t know and ask them if they would be willing to buy your product. There’s some really great books around these. So one is the Lean Startup Methodology, which is a really great resource.

 

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That one is by Steve Blank, and we’ll put these details in our show notes. But that Lean Startup Methodology is all about building it, measuring it, and then learning. Tim Ferriss is another great author who I remember reading for our work week many years ago, but he suggested that you build a landing page and start either selling or putting a waitlist together to see really what the customer demand is before you build the product. 

 

So how do you find these people to talk to? How do you find the first 10 customers to validate your idea? So we’ve just actually done this for our new market research that we’re working at at Honeycombers. And we actually reached out to people on LinkedIn and asked them if they would give us a 20 minutes of their time in return for, I think we gave them, I think it was about $50 sing value of grab vouchers in return. And we did 20 in-depth interviews with our potential customers to understand if our problem that we were solving is actually a real problem. 

 

And it was really very interesting piece of research because it’s just, it’s kind of like you learn so much and nothing’s black and white. So we definitely had some customers telling us that they do have budget to do digital media, but there’s not a lot of lifestyle media in this market. So it was really difficult for them to say, yes, if Honeycombers launched, we would spend our money with Honeycombers. 

 

So it’s very, very tricky, but just getting out of the building and talking to people has enlightened us so much into understanding really who our competitors are, what people are doing in the space, how people measure success of their digital marketing. So yeah, it’s a very, very interesting process and it takes a lot of work, but it’s really much better to do this work at the outset than to start something and realize two or three years in that you’re never going to make money from this concept because either the customers are not willing to pay for a solution to their problem or that the problem’s not real and that your assumption was incorrect. And that leads beautifully into number six, which is money. 

 

Make sure that you have enough money for your venture. So you need to be able to do your basic fundamentals on your costings and you

need to also project your total revenue and your production numbers and really use that business model canvas to fill out your numbers. There are some really good tutorials on YouTube on how to use this tool, but you need to just spend some time, like a couple of hours at least going through the numbers and putting the numbers down for what you think you’re going to make and how you’re going to fund it. 

 

So if you’re starting out, you really need to think about how am I going to be able to fund this business for the first 12 months? So it’s very hard to get investors on board from day zero. You really need to have proof of concept and a little bit of traction before you can attract investors if you decide to go down the investment route. Me from my personal scenario, I actually worked on my business unpaid for four years and I just reinvested all the profits into the business because I wasn’t that keen to take investment. 

 

So you need to be able to know that you can afford to go the distance from a financial perspective. So that’s number six. Number seven, surrounding yourself with the right people. 

 

So this is a really big one really for your own self agency. You really need to surround yourself with people who are going to lift you up and who are going to be able to give you the right advice and contacts and insights and knowledge. And this is one of the reasons I created my community launchpad because I do believe that if you want to be a successful entrepreneur, you really need a powerful role of X of, I suppose, a great network of people that you can lean on to help you with shortcuts for everything from finding a good accountant to understanding how to do a cash flow forecast.

 

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If you’ve got people in your network that can sit down with you and help you out, that’s going to save you thousands of dollars and also thousands of hours of doing it incorrectly or not knowing if you’ve done it right. So number seven is having the right community and support network. The other thing I’d add to that is you need to make sure if you do have negative nazis in your life that you really limit the amount of time you spend with them because you’re going to need people that are lifting you up as opposed to people that are cutting you down.

 

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Okay, that’s number seven. Number eight. Okay, number eight. 

 

The last one is be prepared to fail and be okay with that. So I don’t know any entrepreneur that hasn’t failed. I had a wonderful mentor once who told me that the line between success and failure is razor thin and he was like, I have so much respect for anyone who gives it a crack and fails because, you know, the difference between succeeding and failing is just like, it can be so skinny. 

So you need to be okay with failing. And another wonderful quote from Reid Hoffman, he just had all my favorite quotes when I came to research this topic, is I love this one. If you’re not embarrassed by your first launch, then you launch too late. 

 

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How good is that? So it’s like saying another one I love, expression I love, which I use all the time at Launchpad, is done is better than perfect. So you need to be able to move and launch even when everything’s not right. Because if you wait till everything’s perfect, you’d never do it, right? And lots of people have ideas, but entrepreneurs and successful entrepreneurs are the people that actually action those ideas. 

 

So be prepared to fail. All right. So in summary, just in case you want me to run through it again, the things you need to consider before you start your business or start a new arm of your business or launch into a new market is number one, identify your niche and be super clear about it.

 

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Number two, go through and use the business canvas model and just google that one. It’s certainly be okay with the unknown. Number four, stop writing business plans.

 

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Number five, get out of the building and do the research. And number six, have a good money plan for at least the first 12 months, because you’re probably not going to make any money to pay your own wage or you’re going to need to, if you’re launching a new product or a new market, you’re going to be up to need to fund that new endeavor. Number seven, have the right community around you. 

 

And number eight, be prepared to fail and move without perfection. It’s a good list, isn’t it? I hope you found this little guide helpful to starting your own good business or making a good business that you have even better with an expansion, with a new product line or a new market endeavor. So this is our last podcast episode for this season. 

 

I want to thank everyone who’s listened, who’s followed and who’s reached out to me. I have absolutely loved this journey of hosting this podcast, but it is the time for me to take a little break and focus on my family. And yeah, just have a little break from this wonderful podcast. 

 

So in saying that, if you would like to connect with me or reach out, please do so. You can reach out to me via LinkedIn. You can find me by searching Chris Edwards Honeycombers on LinkedIn or reach out via Instagram. 

 

I’m Chris underscore Edwards underscore AU and I’d love to connect. Until next time, let’s keep striving to create our own good business. Thanks for listening. 

 

This podcast is created for entrepreneurs by an entrepreneur. My name’s Chris Edwards and I am the CEO and founder of Honeycombers, a digital media platform that operates in Singapore, Hong Kong and Bali. And I’m also the CEO and founder of Launchpad, which is a community for conscious entrepreneurs. 

 

We’re always looking for new entrepreneurs that might like to connect with us and level up their entrepreneurial game. So come and check us out. Before I close out today, I just want to acknowledge the traditional owners of the land I’m reporting this podcast on, which is the Arakwa people of the Bundjalung Nation. 

 

I pay my respects to these elders past, present and future. And I extend my respect to all traditional cultures. Thanks for listening. 

 

And I hope that you feel as inspired as I am to create your own good business.