Today I spoke with two people about starting a business, these are conversations I have more and more often these days. I’ve learned a few things along the way and want people to benefit from this beyond those who attend my classes and workshops. Here’s a tip that seemed to get some traction in my conversations today.
You have an idea, you want to see if it will fly, if it is viable, if it resonates with your target market. Traditional thinking would have us starting an entire business around it and setting up all sorts of structures to make it happen. This approach can work but it runs the risk of setting a ‘sunk cost’ trap for yourself. This means you’re so invested because of the time and money you have sunk into something and continue to pursue it, despite it not meeting expectations.
For example, you may have spent a fair chunk of change on a website and branding before testing the idea and it doesn’t get traction with customers so you pivot and tinker to make it more appealing. Or the product doesn’t make a profit so you reduce the price without adjusting the budget. You might find yourself so invested in the outcome that you persist and eventually wonder why.
There’s a lot to be said about knowing the difference between when to be persistent and when to accept that something’s really not working. You’ve heard the term ‘fail fast’? This concept encourages entrepreneurs to let go of ideas, products and services that aren’t providing the anticipated value. When we’re invested, we tend to persevere and there’s nothing wrong with that but Kenny Rogers has some wisdom for us on this.
Biz Tip: Try out your idea as a project.
- Create your concept/product/service as a short-term project, give yourself several months or a year to test it out.
- Create a budget and set some milestones for yourself and how you could get the project off the ground. What are the conditions you want to meet to feels as though it’s a success? Not just profitability, include enjoyability!
- See how many of the milestones you achieve, or conditions the project meets and how your customers respond.
- Use what you learn and the feedback from customers to adapt and change as needed. Iterate, iterate, iterate!
- When you get to the end, take a break, reflect, look at what you’ve learned. Talk with a mentor or coach, get feedback from your customers. (If your customers miss you and demand your product/service you’re on to something, if not, let it go.)
- Decide if you want to keep going or not. You may have a lot of success but learn that you don’t enjoy the actual ‘doing’ of the business, and that’s ok, don’t keep doing something you don’t like, that can’t last. You may have limited success but the information and insights from reflecting on the learning inspire you to give it another try. Go with that!
The thing about doing it as a project before you commit to doing it as a business is that a project can save you a lot of frustration, resentment and wasted effort. A time-limited project gives you the freedom to walk away, instead of being stuck with a business that really isn’t working for you or your customers. This way you learn about when to hold, fold, walk and run. Hopefully, you won’t feel the need to run!
This biz tip is based on my learning along the way, it’s not the truth, just some thoughts, take it with a grain of salt, and as always, feedback welcome. If you’ve enjoyed this, let me know, share, like, comment etc.