This is a book worth reading. If you’re looking for a quick-start guide to starting a business then look no further. Whilst it can be tempting getting carried away thinking about starting the next Facebook or Google, Guillebeau takes a more modest approach when suggesting how to start a business. If you’re serious about starting something then this book is a perfect companion for doing that as all the examples and suggestions are things well within all of our abilities!
Get the book here: The $100 Startup by Chris Guillebeau
Who this book is for
If you’re looking to start the next big start-up – lets say Facebook for example – then this book probably wont help much. The $100 Start-up takes a more humble approach and instead focuses in on “Micro-businesses” anyone with a marketable skill can start.
Welcome to the world of “Micro-entrepreneurship”
Traditionally, being an entrepreneur involved taking on a huge risk to start an enterprise. You would have to take out loans, employ personnel and constantly keep your guard up and compete against any new start-ups in the area.
However, things have seemed to change. There are now a new breed of entrepreneurs; ones who are starting-up from their kitchen table and growing from an initial idea into fully fledged businesses in the space of a month – all for less than $100!
Guillebeau uses these businesses as his inspiration in writing the $100 Startup. Starting your own Micro-business probably won’t make you a billionaire, but it could make you a decent living.
Many of the businesses used as examples in this book were founded upon the following factors:
- Follow your passion model
- Low start-up costs
- Earn at least $50,000 a year
- No specialist skills required
- Full financial disclosure – no hiding stuff!
- Fewer than five employees
If the above factors sound like a type of business you would like to start then Micro-entrepreneurship might be for you!
Deciding what business you should start
There are 2 key things you should focus on when looking to start your company.
This represents the intersection between something you like to do (or are good at) and what other people are also interested in.
It’s important to remember: Although you might be passionate about something, others might not and if it’s not marketable then it will be a struggle getting others to buy into your idea. Now, don’t get me wrong: If you enjoy what you do, then do it. However, if you want to start a business which could make you a living this is a important factor to bear in mind.
When you’re looking to start something new, don’t get too tied up on worrying whether you have enough experience. You need to know what you’re doing, but everyone has transferable skills and can pick-up new things quickly so don’t talk yourself out of your new ideas too easily…
Many of the individuals who started their businesses included in the book did not have directly attributable skills to what they were doing. They instead had transferable skills. Let’s say you’re a teacher, you’re not doomed to staying in that career forever because that’s what you’ve always done, you have transferable skills too! You could be good at communication, adaptability, crowd control, relations management and other things too – all factors which you can consider and use when looking to start a business.
Minimum requirements to starting-up
When you’re looking to start something new, you generally have a blank canvas to go crazy, but if you’re looking to make something sustainable there are some key things you need:
- A product or service
- Customers who are willing to pay
- A way to get paid
If you have these 3 things then you’re ready to get started!
Some tips on what people want
If you’re struggling to think of ideas it’s always good to follow the money and deliver things people want in the first place. A great place to start when thinking about what others want is to think about what we want more or less of:
If your product or service can help remove things from the Less column and provide things from the More column then you’re definitely heading on the right track.
Providing a service
If you have an idea for a product then go for it! However, if you’re thinking about providing a service, here are some important things to bear in mind:
1. Be specific
Aim to have a specific service as opposed to something general. Avoid becoming a “life-coach” or “business-consultant”. Get specific about what you provide, you won’t only stand out, you’ll attract the right customers too.
2. Don’t undersell yourself
Nobody will value a $15/hour consultant. Even if you provide an amazing service, part of the battle is perception. Don’t underprice your service in a bid to please customers. Be realistic about how much your time costs – after all, you probably won’t be charging out 40 hours a week consistently so factor this in…
Making an offer others cannot refuse
Once you have that great idea under your belt it’s time to step-up and make an offer your potential customers cannot refuse. Here are some tips to help you with that:
1. What we want and what we say we want aren’t always the same thing
We all love to complain sometimes, however, that doesn’t show our full intentions. Think of budget flights: There’s constant complaints about the leg-room, additional charges and how comfortable they are, however, we still use them. That’s because they still deliver what we used them for in the first place: cheap flights. As long as you deliver what you say you are going to deliver well, you can forget about the other things for now…
2. Most of us like to buy, but we don’t like to be sold to
You should try to apply subtle pressure in trying to secure any sales but not enough to put others off. Make your purchase seem like an invitation instead of a sale. Channel that “FOMO” like feel around your product. Capitalize on peoples praise around your product and show prospective customers what they are missing!
3. An FAQ is there to answer peoples’ doubts
Although an FAQ is useful for having a document which answers all of the same questions, it’s also a pretty useful tool for marketing your product or service. A well designed FAQ will reassure any pre-purchase doubts anyone has. Think of reasons why people might be hesitant in giving you business and sneak the perfect answer to their worries into your FAQ’s!
4. Provide an incredible guarantee
Regardless of what you are selling, the overriding concern amongst customers might be “What if I don’t like it, will I get my money back?” The best way to combat this is to provide a satisfaction guarantee: nothing too complicated, just something which gives people that easy way out to return the product and get their money back if they want to. As long as you’ve designed a good product or service then this isn’t something that many people will use, however, it will improve your customer satisfaction greatly – something which can only help future purchases.
When you launch
The goal of launching is not only to try and convert as many prospects as possible; it’s also to build and preserve your relationships with those customers and increase your influence in the process.
You don’t want to hammer people too hard – if people are hesitant to buy your product, don’t force them or seem desperate for their sale, instead try to build genuine and lasting relationships.
It’s important to remember: People will complain regardless, it might be that you’re selling the wrong thing or that you’ve priced it incorrectly. There’s nothing you can do about that attitude – just listen, see if there’s any meaning to it and then move on. You should make sure you pay attention to the people you’re trying to sell to, however. Keep a record of what they are saying and how they perceive your product, then see if you can make any changes to improve how satisfied they are.
A good launch should increase sales but also influence at the same time. Don’t worry if your sales aren’t flying through the roof – as long as people vouch for you and help advertise your product then you’re still on the right track!
It’s the small changes which make a difference
Once you’ve launched you’re going to want to keep improving. But, don’t worry, you can make substantial improvements through small consistent changes.
One of the factors you’ll want to focus on is your income: without that you won’t have much of a business. To ensure that you continue to increase your income you can make small tweaks. Don’t view gaining new sales as a monumental task whereby you need to find 100 new buyers. Instead look at things like conversion rates: If a product typically has a 1.5% conversion rate, try to get it to 1.75%. Whilst that increase seems small and even quite manageable, the effect will make a big difference on your bottom line.
Some other things you can make small tweaks to are: Website traffic, average sales price, customer satisfaction.
How to make these changes
1. Create a hall of fame
The 80/20 rule is useful here. Chances are 20% of your customers will make up 80% of your profits. You need to recognize these customers and keep them. Make a hall of fame, show them you appreciate them and offer incentives and rewards to keep them around.
2. Encourage referrals
Referrals are a great way to increase your traffic and obtain further loyal customers. Each time a happy customer refers your business to someone else you are gaining more reliable potential leads.
3. Everyone loves a contest
We love to get things for free. Host contests, attach no strings just give free things away as long as people enter! It’s a great way to get publicity for your products and services.
Most important takeaways
Starting your own business shouldn’t just be a pipe-dream which you never end up doing. If you set realistic expectations then working for yourself isn’t a too distant possibility. The key here is to be realistic. Whilst many of us won’t start the next Facebook or Google, if you pour your heart and effort into a smaller micro-business then the odds are much more in your favor in terms of it paying off in the long run!
Hope these insights were useful! Stay tuned as our podcast will be launching very soon along with a re-design of the website!
Get the book here: The $100 Startup by Chris Guillebeau