4 Tips to Keep in Mind When Starting a Business [Guest Post]
August 6, 2013 4 Comments
[Guest post courtesy of James Smith, co-founder of James+James. Scroll to the bottom to learn more about James and James+James.]
Twenty-two months ago I was unemployed. Today, I’m blessed with co-owning a furniture manufacturing company called James+James. Currently, James+James has over 17 full-time employees and has sold products in over 30 states and it’s still growing! My college friend James and I started the business in my garage and it has been one heck of a ride so far.
I was honored when Lawson asked me to pen a post about what I believe has been the main contributing factors to our continued growth. While I look forward to writing more in the future about our specific online and social strategies, I thought it best to start at a higher, less tactical level. With that in mind, here are four important tips to keep in mind when starting a business:
- Start your business with a need, not a product or service
Too many companies start with a product or an idea and then desperately search for a market or even attempt to create demand for their offering. A young company has enough issues to worry about and certainly not enough capital to create demand. If you’re thinking about starting a company, start by identifying an unfilled need or demand in the marketplace and then set out to fill it better than anyone else. Create a product or service people already want (whether or not they know it) and you’ll never have to convince a single person to buy your product or service.
- Refuse to be a startup
Being an entrepreneur is hip (even though it’s often just a euphemism for being unemployed) and being a part of a young startup is even cooler. My advice: If you want a sustainable and growing business, don’t give in. If you really want a profitable company, see yourselves as a young business not a startup. Confused on the difference? Here are some common distinctions:
- Startups spend money they don’t have on unnecessary expenses like trendy office spaces. Small business owners bootstrap with a 5 year-old laptop and work out of their dad’s basement because they know the money is better invested in the business.
- Startup owners love hearing their own voice. Small business owners love listening to their customers.
- Startups hand out equity like candy. Small business owners recognize the long-term value of their business and grow responsibly to lower risk.
- Startups take on projects because they think they are cool. Small business owners take on projects that will be profitable and make good business sense.
- Stick with what you’re good at
When you’re running a business, especially one that is successful, you’ll find yourself sent a hundred different directions by a hundred well-intending individuals that have all kinds of great ideas. Trust me when I say that it is easy to follow every shiny object. Resist the temptation. Know what your company does best and do it over and over again. I am not saying don’t expand your offering and be myopic, but spend your time focusing on what already works.
- Realize that investors are usually a bad deal and that growth can wait for cash
When your idea takes off, everyone you know is going to want to get involved. People will offer you hundreds of thousands of dollars to invest. In most circumstances, getting an investor is a bad deal and one of the most expensive sources of capital. If you really believe in your company, why would you trade 20%, 30% or more for ten thousand or even one hundred thousand dollars of investment? Borrow the money or wait until your business has made enough profit to finance your next move with cash. When you’re spending your own cash, you’ll find you spend less and make wiser decisions. You’re also expanding based off sales and not based off hope or projections. We’ve had positive cash flow since day one and I can’t recommend it enough. You’ll run your business, not someone else and you’re one step ahead instead of three steps behind.
These are some of the lessons I’ve learned during my journey as a small business owner. Keep them in mind whether you are thinking about starting your own business or are currently running a company like I am.
Guest post courtesy of James Smith, founder and co-owner of James+James Furniture. In addition to starting a successful furniture business, James has done everything from interning with Dr. Phil and helping film episodes of Toddlers and Tiaras and 19 Kids and Counting to client services at a digital innovations company to owning his own production company. He is a graduate of John Brown University. You can follow and connect with James on Twitter: @j2s.
James+James believes furniture should be hand-built in America from solid wood. That it should be customized for your home, not mass produced for any home. They believe the integrity of each piece reflects the integrity of its builder. That real wood always trumps pressed wood and particle board. That talking to the guy who will be building your furniture beats talking toa salesman. That custom doesn’t have to equal costly. Visit their website or showroom in Springdale to see their beautiful furniture. You can also Like them on Facebook.
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