15 Things You Should Know When Starting a Business
Let's just get this out of the way right off the hop: starting a business is not for everyone. Some people possess a particular set of traits that just fit better with the entrepreneurial template. You can be happy and successful by working for someone else. It all depends on who you are as a person. If you believe you're destined to be an entrepreneur and are looking to start a business, this video will help you figure out both a game plan and double-check your existing beliefs.
When people talk about the stuff, they usually avoid the hard-to-swallow truths, right? So, we structured this so that it's perfect for everyone who's in the beginning stages of their company, but we're not giving you any false hope here. With that said, here are 15 things you should know when starting a business.
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Number one: Talk is cheap. Nobody cares about what you're planning to do until you do it. We get hundreds of emails from people who say they plan on launching a company, but how many do you think actually did anything about it? Actually, we can answer that one: in 60. For every 60 people that say they're planning on starting a business, only one actually does it. The rest just talk about something they never end up doing. Most people will find excuses, saying it's not the right time for whatever reason they find. But the result is always the same: the world doesn't care about what you plan on doing. The world doesn't run on wishful thinking. Talk is cheap.
Number two: An idea isn't worth anything before it yields results. An idea is worth $1 million only after it makes $1 million. New flash: Elixir ideas are free. Everyone has ideas. Tons of them, actually. And they're not very special. Talk to anyone around you, and they'll immediately bring up five ideas or businesses or projects. But as we've mentioned in the previous point, since everyone has multiple ideas, there's an abundance of them. Most of them are actually pretty good ideas, but that doesn't mean that they're worth anything. Ideas are worthless unless they're paired with the right execution.
Let me just put it this way: a good idea with poor execution not only will not yield any positive results, it'll end up consuming resources and time. Meanwhile, a mediocre idea with great execution will become a viable business. It's very rare that good ideas and great execution meet, and they almost never happen. You start off with a simple idea which over time could evolve into a good one. But execution is everything. Just because an idea sounds great to you doesn't mean the world will think so as well. We recommend that you find unbiased opinions. Don't listen to your friends and family because they care about you, and they'll sing your praises.
If you want real feedback on your ideas, ask people to front you the money; you'll find out everybody says that an idea is good until they have to put their money where their mouth is. Don't be protective of your idea; it's not that special. It all depends on your ability to execute. Also, you don't need a revolutionary idea to get rich either. You don't have to reinvent sliced bread to have a successful bakery. Facebook wasn't the first social network, and delivering food is not revolutionary. You just need to execute it better than your competitors.
Number three: Nobody cares about your business more than you do, and they never will. You might inspire people to join your cause, but nobody will ever want this business to succeed as much as you do. This is something really important to consider in the very early stages, especially if the business has multiple founders. If you partner with other people, every single one of these members needs to want it as badly as you do. Many times, we see best friends teaming up in order to start a business only to realize six months later that one of them isn't really that passionate about the idea and wants to move on to something else. Partners can be a great thing, especially if they can fill up the skill set. But with every person you bring in, you're slicing up the pie as well. Rarely do you see businesses started by a single founder. The upside is you get to keep all the rewards; the downside is it's going to be a lot more exhausting than you think.
No matter which way you're moving forward, think of your team as a chess set. You want as many of them to be around you when you win, but don't refrain from sacrificing some of them; otherwise, you'll end up losing the game altogether.
Number four: You don't need money to start a business. Not even people who actually have a lot of money use their own money to start a business; they use credit. That's a story for another time, but it is worth talking about. You are the business in the beginning. This is one of those things that stops people from starting out. They all think you need a ton of money to get started, and this is because most people look at the final stage of the company. The part where you have a ton of employees, a marketing team, multiple products, raw materials, and registered intellectual property. But that's not how businesses are started. Okay, they start with one person, you hustling your butt off and growing.
As the journey progresses, you can start a business with under a hundred bucks. What you need to understand is that in the beginning, you have a lot of time, and that is your main resource. If you can't convert your time into money through your business, then having an influx of capital is only going to sink that boat more quickly.
Number five: Be ready to make sacrifices. Something most people don't realize when starting a business is the amount of work and sacrifice that is needed to turn this into a success. Most people start a business because they don't want to work for a boss; they want to be the boss. They despise having to work the 9 to 5, so they do something about it. But it doesn't take long to realize that instead of working 8 hours a day, you're now working 16 hours a day every day, including the weekends, and you can barely sleep at night because you worry so much about the future. Yes, okay, creating a successful company leads to a way better life than you would have had otherwise, but those rewards do not come for free.
The moment you start a business, it needs to become priority number one if you want to have a shot at success. Your social circle is gone; your family will see you less. It'll take a toll on your health, physical and mental, and that is just the beginning.
Number six: Build smart from the start. If the foundation of a company is fractured, it doesn't matter how high you plan on going; it is bound to fail. This is something you should definitely consider when starting out. A smart business will check off at least some of the following boxes:
It doesn't have a demand ceiling, which means that as you grow, you will always have customers. If you're the only one selling blue hats to a small town, well, at one point, you would reach a certain ceiling where sales cannot be increased anymore. People only need one blue hat, and at some point in time, you will sell one to every person in that small town, so no more growth.
Every part of your business is replaceable, which means the business can survive if one of your future employees or one of your suppliers decides to leave.
Your business can scale; you have a clear plan on how you can increase production as the demand increases.
There's a clear direction for the business; both you and your employees understand what you're working toward.
Number seven: People should free up your time so you can focus on your strengths. Don't be an employee in your own business. Now, one of the most common mistakes that people make is they trade their job for another one, this time within their own company. When you're starting out, you are the first employee. You need to get your hands dirty so you understand, optimize, and perfect the system.
At the previous point, we talked about building a smart business, which means once you have your entire process figured out, break it into smaller interconnected systems. Then find people onto which you can unload that specific part of the chain. Your employees are here to make sure the engine is running while you're holding on to the steering wheel, getting everyone to the promised land. The founder should be in charge of innovation and business growth. Your job as a founder is to figure out ways that this business can grow so everyone who works for you gets paid. That is your job; their job is to make sure that they can take the day to day so you can focus on your job.
In the early stages, you'll feel the need to micromanage everything, but this keeps you away from the most important task you have, which is growth. Every individual who moves into entrepreneurship has some traits they can use to their advantage. These are your strengths. Identify them and put them to work; use them to get the biggest return on your time.
Number eight: Fail fast and adapt quickly. Be ready for things to not go according to plan. You are a novice at this, so keep in mind there are many things you have yet to learn. There are going to be plenty of bumps in the road, but if you're serious about this being your life, you need to keep on going. You need to rethink the way you look at failure and what failure actually is for us because failure is not achieving your dream life. Everything else is just a part of the game.
Think about your journey as gathering data so you can make a more educated decision on the future. Eight out of ten businesses fail in the first 18 months. This is because, one, they hit a bump so big they decide to call it quits, and two, they failed to adapt to their newfound reality. A great example of this is Nokia. For those of you who don't know the history of the brand, they used to be a rubber manufacturer before moving into technology.
Their rubber factories were struggling, so they adapted to a newfound opportunity. But a few years later, they failed to adapt to the changing environment with the smartphone and almost bankrupted the company. This giant that once dominated the space is now fighting for breadcrumbs left by those willing to fail faster and adapt quicker. This right here is how failing to adapt looks like in real time.
Number nine: Long-term success depends on your ability to manage your resources. Life is a lot like a strategy game. You've got several resources at your disposal: your time, your willpower, your ability to work, and maybe some money and some people you know. This is the hand you've been dealt. It's time to make the most of it. Don't complain about not having enough to begin with. Okay, yes, there are other players who've been dealt a better hand, but you have your own storyline, you have your own journey, and your challenge is to make the most with the resources you have.
Many people undervalue time. Time is a resource we've all been dealt at equally. The best players are those who are strategic with the way they make use of everything they have at their disposal.
Number ten: The right mentor is worth ten years of struggles. They've walked the road that you're on right now. They know where the potholes are; they know what's up ahead, and you'd be a fool to not leverage their knowledge on your journey. You need people who inspire you that have done the things that you're about to do. Analyze them; study them. Alex, or see what nuggets of gold you can extract from their experiences. If you're lucky enough, serious enough, and prove that you're worthy enough, one of them might become your mentor.
Think of mentors like power-ups. Things get so much easier when you've got one. But you know we also recognize how challenging it can be to find the right mentor, depending on where you live or what your budget looks like. And that's exactly why we designed the Alux app. We wanted to level the playing field and give everyone access to the same top-quality mentorship the ultra-wealthy are getting, but at a price that you can actually afford.
So many industry experts charge thousands of dollars for just an hour or two of their time, so we paid them on your behalf to produce valuable and actionable courses that are available to you with a subscription to the app. On top of this, we use large-scale academic studies and real-world experience to craft daily coaching sessions for you, the perfect way to kickstart your morning and compound wisdom every single day.
And when it comes to how well our app is helping our community reach their goals faster, you don't have to take my word for it. Thousands of people are using the Alux app to incrementally improve their lives, and we want you to see the very same kind of improvement. So, if you go to alux.com/app and download it now, then come back here and scan this QR code on screen, you'll get 25% off the yearly subscription. The next year is going to pass you by either way; if you want to actually have something to show for it, well, you know what to do. Alux.com/app. We'll see you on the inside.
Number eleven: There are no shortcuts to any place worth going. Don't try to cheat the game because it's hard. Okay, we are fascinated by people who jump from business to business, from shiny thing to shiny thing, because they're looking to get rich quick. Even if they settle on a business, they never put in the work. Instead, they spend most of their time looking for shortcuts, for loopholes. But real value comes from building a solid foundation and laying brick next to brick until you put your dream life together.
And you can easily see this stuff on social media; right? There are so many Instagram profiles with millions of followers which only get a few hundred likes and several comments per post. People want the cake, but they're not willing to learn the recipe and how to bake one. When others offer them a cardboard cut-out of a cake, they will take it because they don't understand what a real cake even is. If you're trying to cheat the game, you're just cheating yourself. Okay, never forget that.
Number twelve: Keeping your head down and grinding is what will make or break you. The only thing you're in complete control over is yourself. It's easy to see some initial results and let it go to your head. There's a difference between winning a battle and winning the war. You should be playing the long game, my friend. Sure, celebrate your wins when they happen, but the next day, it's back in the trenches, day in, day out, until you've achieved the life you started.
We can't stress this enough, just how important self-discipline is, especially when you're building a life. Success is the sum of small actions, repeated every day for extended periods of time. That's what you need to keep on grinding for. Keep learning, stay humble, and keep your eyes on that goal.
Number thirteen: Sales solve all of your problems. Sales are the gas to your machinery; without it, you're just left with a pile of scrap metal. As a new entrepreneur, it's easy to get sidetracked into marketing, branding, and social media glam, but it doesn't matter how pretty your logo is if you ain't selling. Your job is to bring money from the marketplace into your company and use it to grow. Money makes the world go around. Okay, without it, your business isn't going anywhere.
It's shocking to us how many people leave the sales part out of their business for later. They've got no idea how they're going to make money or if people are actually willing to pay. You need better equipment? Get more sales. You need better marketing? Get more sales. You need a better accountant? Get more sales so you can afford one. There are very few problems sales cannot solve in a business, and that is why getting paid should be your number one priority.
Number fourteen: Raise capital from investors only when you can't do it by yourself. Mark Cuban has a great saying, and it goes something like this: the first time you raise money, that's the first time you lose because you were unable to do it organically. We've got a lot of acquaintances in the technology space, and they all celebrate their funding rounds like they've won. But what did you win?
Okay, you just gave away 40% of your company in exchange for a little bit of cash, which you would waste in less than 12 months. Now, don't get us wrong, okay; having access to capital is amazing, but it's not something that should be your main focus. We know entrepreneurs who spend more time trying to raise money than actually working on their product or business. There are strategic moments when a business can no longer grow or survive without external capital, but this should not be something a new company is dealing with. Do it yourself; figure it out, bootstrap, and get creative.
Okay, it'll teach you a lot more about business than anything else will.
Number fifteen: A business without an endgame is headed nowhere. Why are you building this? When do you know that you've made it? What is the goal of the company? What are your personal goals related to this company? Will this company be sold at some point? These are all questions you need to be able to answer even at day one of your business because it puts everything else into perspective.
All of your actions you'll take from this point forward should align with this goal. You need a game plan; without it, you're just going to be shooting in the dark. A business is where the founder knows what the endgame is, not only to have a better shot at success but to evolve quicker. It'll take you less time to get to wherever it is you're going because you know what to measure for and focus all of your energy on checking off those boxes.
Alright, so these are just some of the things that most aged entrepreneurs would have wanted to know when they were starting out. But at this point, Aluxer, we're curious to know: are you planning on starting a business, or do you already have one? Please share some details in the comment section. We would love to hear from you.
And as a reward for sticking around all the way to the end, you know you've earned a bonus point!
Number sixteen: Don't worry about the legal part in the beginning because you'll figure it out as you grow. Legal and finance are both important in the long run; absolutely. But to be honest, you don't really need to worry about any of that in the beginning. Think of your early days like a trial period where you get to experience what a business might look like without all of the add-ons.
Your number one priority is simply getting that first dollar. You'll know when the business is ready for a complete package, and you'll quickly understand why it's better to form a certain type of company versus another.
Hey, Luxer! We hope you found this video valuable, and we're so glad you spent some time with us today. We'll see you back here next time, my friend. Until then, take care!