New Entrepreneur? Don’t Build the Business, Yet.
Are you about to start a business, and you think you must build a business? It could be the worst thing to do because you are burning through limited cash resources and wasting time.
I have made this mistake myself. I built a new business, pumped thousands and even tens of thousands of my cash into it and wasted weeks and sometimes months only to discover that what I was building was the wrong thing.
#1. You honestly don’t have a business
You can have the website, the logo, the brand design 80% complete, business cards and even a brochure you send to people. You registered the business and opened bank accounts and hired an accountant to handle the supposedly coming tsunami of cash.
Yet, you have not generated ONE single invoice.
That ladies and gentlemen is not a business. You have nothing. You have expenses and dead artefacts (website, logo etc.) that have not proven their worth yet.
If you are not invoicing and getting money in, you do not have a business. So it does not matter how fancy your website, business cards or offices look. No customers, no business.
#2. What you need to build first
Don’t build a business; build a customer book. Get paying customers. That is your nr. 1 goal, and there is more to it than you think. I understand why we want to build the business. It adds a feeling of reality, and we feel organised, yet our efforts are mostly wasted.
You would not have thought of starting this business if you did not have a product or service to offer. So, therefore, your Nr. 1 priority is to get customers for the product or service. Get paying customers through the door, without a logo, without a website and without all the fancy bells and whistles we think we should have.
It would be best if you got cash in as fast as possible, and you do that by reaching out to potential customers and working for and with them. Let me explain.
#3. Why you MUST build a customer book first
Starting a new business is cool but not doing it from a customer-first perspective means building this business on your assumptions and dreams. You are probably drunk on the opportunity you see, which makes you dangerous because you will burn through your cash faster.
Almost 100% of the time, when I launched some new business, it had to change after working with customers. What I thought was great was proven wrong by the customer.
So all the text on the website had to be re-written. The brochure had to be re-written. All the marketing I sent out based on the first idea was a waste because it never spoke to a real need customer have. So all the people I talked to I have to speak to again but with a new message, and they find that somewhat fishy sometimes.
Start by getting 10 customers. Work with them. If you have 10 customers, you have 10 people giving you feedback about what works and does not work about your product or service. You also have money coming in. Like my dad used to say, “Happiness is a positive cash flow”.
If you get 10 customers and they leave. Maybe your business is not as fantastic as you thought.
If you get 10 customers and they only use your product or service once, although it should result in repeat business, then maybe your business is not as fantastic as you thought.
If you get 10 customers and they stay and refer other people to you, you are on to something. Then only do you BUILD THE BUSINESS. Then you know what they want, what they value and what gets them to come back for more — making marketing and sales much more effortless.
Don’t fall for the trap of starting a business before you have customers. It is dangerous and can financially ruin you. Why? I am proof of it. I have ruined my finances many times over in my 21 years as an entrepreneur. So please don’t make the same mistake I have in the past.
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In fact, in November 2020, we took 50 young people from previously disadvantaged areas in Johannesburg, South Africa. They had to build a business in 21 days, generating enough profits to replace their salary.
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