The day I started a business of my own was one of the happiest days of my life. I have successfully started a number of companies and in every case, they have been profitable within 12 months and have built from $0 – $1,000,000 within 3 years and then grown to become multi-million dollar companies.
There are definitely some keys to reaching that illusive $1M mark and just to show that it is challenging for many people, there are 28 million small businesses in the USA and the number of them that have annual incomes of over $1Million is only 0.1%!!
I understand that some people are happy to stay employees. They love the feeling of stability, the fact you get a regular income, the team spirit and the holiday and sick pay. For me, I have loved being a business owner since I was in my late 20’s. I love the feeling of being in control, of having something that is mine, of working so hard for my own company. I love connecting with clients, seeing lives change, watching stock prices grow for companies we work with and winning global awards for our services. I love what I do!
When we launched The Learning Factor a number of years ago, it started in my living room. Within only a short time, we were working with Fortune 500 companies and moved into our own offices. It was exciting to be training supervisors and managers for some of the world’s largest companies from Texas to Tokyo, Canada to Cambodia, Bangalore to Borneo, and Shanghai to Sydney.
Almost every week, I am contacted by people who long to break free and start their own company. Their big question is, how do you do it?
1. Your company is in your DNA
You need to realize that your company is in your DNA. When you ask yourself “what can I do?” think about such things as your passion, calling, gifts, skills, background, parents, and ancestors.
After the sale of one of our companies, I went to live in Santa Clara, USA. I was trying to decide what I should do next with my life, what was my next chapter. After some deliberation I asked myself, some questions, “What do I love? What are my gifts? What am I called to do? What do I enjoy the most?” I came to the conclusion that I love training and developing people and running a training company and so I started a training outsource company.
When I was a child my mother used to speak about a famous relative who was once the Lord Mayor of London. To be honest, I thought it was like Santa Claus or the Tooth Fairy. However a few years ago my uncle sent me a copy of a book about this great great uncle, Sir Joseph Savory. He was the major of London in the 1890’s and also a very successful businessman in shipping, finance as well as a public speaker. Is it any surprise that I started working in the banking and finance sector and am a public speaker and have a passion for having my own training company? In hearing about his life from my mother and reading his life story, I felt that it was my destiny to succeed in business. It is in my DNA!
2. Begin with the end in mind
Decide at the beginning what you want to achieve. Do you want to build a company to sell one day, or do you want to make just $3M per year and have a more comfortable lifestyle in five to ten years? Do you want to have multiple staff with smaller profits, or do you want to contract people when you require them, pay them more, and make larger profits?
3. Start with your own money
To me, the important thing about starting my own company is that I want to be the boss. I want to set the strategy and I want to be the leader. Yes, you can find investors and shareholders, but the moment you do, you are subject to their control. Every company I have started I have built from the ground up with no investors.
4. Run your new company in parallel to your old job
I encourage you to stay in your job and then, for the first year or two, work an extra 30 hours per week building your own company after hours and on weekends. Set a financial goal for your company, and when you reach this, then you can step out and work full time for your company.
Another option, which is what I did, is to consult to a company for 2 or 3 days per week for the first 6 months. This way, you have a buffer where your mortgage is being paid and the other 2 days per week you can use to build your own company.
5. Be willing to work 70-80+ hours per week the first few years
If you think that you are going to build a new business working 9-5, then you are fooling yourself. Startups take a lot of time to establish all the processes, products, etc. This is going to take you away from family, friends, exercise and a lot of other things that you may have time for as an employee. However, the longer term benefits will be worth the initial pain.
6. Build your network as big as you can
Companies spend a fortune building a database of contacts, potential clients, and connections. Don’t wait until you are out there on your own to do this. Start connecting now through LinkedIn. One of the biggest challenges with a database of contacts is keeping them up to date. People are constantly changing companies.
That’s why I love LinkedIn, because you can connect with people and stay connected for life, no matter what company they may move to. It’s amazing how many people you can connect to in 12 months if you only spend 30 minutes each day connecting with people
7. The power of processes
The great companies in the world have great processes. It’s the power of process that makes the product successful. We can deliver the exact same training course in Shanghai, Tokyo, London, New York and Sydney all on the same day in multiple languages because we have excellent processes. From day one, start developing processes and document them. These are worth a lot of money.
8. First the scaffolding, then the building
It takes a lot to get that first client, but all you need is one. Building a company is like building a home. First the scaffolding goes up, and then comes the house afterwards. When the house is complete, the scaffolding gets pulled down to reveal something solid and permanent.
Sometimes, in building a business, you have to start with the “scaffolding clients.” These are not permanent clients. Sometimes, these are small and painful jobs, and not always your core business. It is called “being all things to all men” to pay the bills. These scaffolding clients get you started, pay your bills, and help you eventually build the company. Don’t be too proud to accept any work at the start; it may be a blessing in disguise. Eventually your long-term blue ribbon clients will come if you stay positive, be persistent and do No. 9.
9. Sales & marketing every day
Every day, you must wake up and look at your company goals. Check out your $X per annum, X number of clients, and X people in your database. To reach $1M in 3 years, you need to be focused on sales and marketing every single day. This is your number one priority. You need to live it, breath it, love it, and never stop doing it. Although we have marketing automation set up at the end of the day, you still need to connect, even if it is virtually with your customer.
Even I this virtual world, we need to connect. Remember this, before a company buys from you the buyer asks three questions:
- Do I like this person and could I work with them?
- Do I like their company and could I work with it?
- Do I need their product and will it meet a need we have?
If all three are yes, then you will win the business.
10. Customer service is king
In this day and age, unique products don’t last long. We need a differentiator, and that is customer service. We work with some of the world’s largest companies, and many of them have learnt this lesson. We have helped them change their culture from a product-centric culture to a customer-centric culture. Products will never be perfect. At the end of the day, it’s customer service that will make or break your business.