Jan 29

Jan 29 5 Things You Need To Know BEFORE You Start A Business

I got an inquiry on LinkedIn from someone requesting advice on how to start a photography business. This isn't the first time I've received such an inquiry. I'm going to attempt to provide some useful advice, based on my experience, that is in no way specific to photography. From what I've observed from other small business owners I interact with, the information in this blog post is applicable, regardless of the industry.

Tip #1: Identify your target market

What problem do you solve? Who has that problem? Those are the beginning steps to identifying your target market.

Another way to look at it is to ask yourself "who do you want to be the go-to person for?" You have to continually refine your answers to these questions until you've identified a very specific customer profile. If you make shoes, for example, your target market is not anyone who needs shoes. What kind of shoes do you make? Men's shoes or women's shoes? Leather shoes or hiking shoes? $75 or less shoes or $500 and up shoes?

You have to work through a process of identifying a very specific customer profile in order for your marketing efforts to be effective (see Tip #2). A great tool for helping you systematically develop that customer profile is the Business Model Canvas (BMC).

Here's a link to a BMC tool I found useful and a YouTube video that explains how to use it.

Tip #2: You are not in the business you think you are

You're in the marketing business.

The sooner you understand that, the better off you will be. It doesn't matter what product or service you specialize in, your primary business is marketing because if your marketing business fails, it doesn't matter how good you are at whatever your secondary business (your specialty) is.

We are ALL in the marketing business, first and foremost. I cannot emphasize this enough and I don't know if it's even possible for anyone to grasp the extent to which this is true until they start a business. You will spend more of your time, energy, cognition, and money on marketing than you will on anything else. You need to understand that going in and plan accordingly.

That means committing yourself to studying marketing and setting aside an annual marketing budget as well as developing a strategy for using it effectively over the course of the year. And I do mean a strategy, as opposed to spending your budget on whatever shiny thing that pops up and promises to bring you business. Those are ad hoc, tactical moves that are unlikely to yield any results.

You want to develop a marketing plan for the year and align your budget with it and execute that plan. Stick to it. This is another place where many people fail. Most things will work if you just stick with them long enough for them to work. But most people will try a marketing tactic once or twice and give up on it because it doesn't bear fruit immediately.

How do you develop a marketing plan?

Find a mentor. Engage your network and see if someone knows someone who is where you want to be and is willing to share their knowledge. Good luck with that, though.

More likely, you’ll have to do this by yourself. The following books will help you:

Now that you know what your target market is and you understand that you're in the marketing business, you need to figure out effective and efficient ways to reach your target customers consistently. Video marketing needs to be a part of that strategy.

You have to "touch" people eight to ten times before they buy from you. That's your second lesson in marketing. So that marketing plan you develop needs to be supported by a budget that will support a consistent outreach. Once or twice or four or five times usually won't get it done.

Tip #3: Learn how to effectively present your value proposition

Superior marketing can make an inferior product or service wildly successful. But the reverse is not true. You can have a world-class product or service, but if your message about it is bad or poorly delivered (or not delivered at all because you aren't marketing), you are not going to have any sales.

Figure out how to present your value proposition in a way that it resonates with your target audience. That world's greatest product or service that you offer that should sell itself, won't. YOU have to sell it.

And you have to do this over and over and over again using whatever channels you've determined are appropriate for reaching your target audience. Again, nothing works as well as video marketing, so it should absolutely be a part of your marketing strategy.

Eventually, this will yield results that will build upon themselves and your marketing machine will be airborne. You'll still have to put in work to keep it in flight, but nowhere near the effort it took to get it off the ground.

Tip #4: Learn your costs of doing business (CODB)

In creative disciplines like photography, new business owners are particularly uninformed about the costs of doing business and they undercharge by gross margins all the time.

Getting paid $1,000 for a day of work sounds great to lots of people who don't know anything about CODB. That thousand dollars is not so great if you do a CODB calculation and determine that it actually costs you $1,025 to deliver that service.

Without knowing your CODB, you can slowly go out of business and not realize it. And for many people, the deficit between what they charge and what it costs them to deliver their services is much greater than the example I gave.

You need to figure out how to profitably solve whatever problem it is you solve, which means learning how to calculate your CODB. CODB is going to vary wildly from one industry to another, so the best advice I can give is to join a professional association for your industry. The members will be happy to tell you how to calculate CODB.

Here's some insight into what goes into a CODB calculation for a photography business. But some of those costs are universal across industries, so anyone can find useful info in it.

Tip #5: Leverage social media, but don't put all your eggs in that basket

Don't fall for the social media fairy tale of generating great content and getting discovered by some big brand or celebrity and your business takes off.

Yes, it happens. And, yes, people win the Powerball. If your business strategy is based on the Powerball odds that you'll generate business through social media, you're setting yourself up for disappointment.

There are hundreds of millions of people on every social media channel. The wild success stories you hear about are statistically insignificant. That doesn't happen for the overwhelming majority of people who are on social media specifically trying to achieve that kind of success.

The myth of blowing up on social media is just that for most people: a myth. Getting lots of likes does not correlate to revenue. You do have to have a presence on social media, but you also have to have a realistic understanding of what social media is likely to do for your business.

Pick one or two social media platforms and go all-in on them. If you spread yourself across all of them, you'll do a little bit of nothing everywhere, instead of doing a lot on the platform where you should be doing it. Pick a platform and engage consistently.

LinkedIn is my platform of choice. It's just a natural home for the topics that hold my interest both for consuming and creating content. And creating is key. Don't just like and share other people's work. If you're thinking about starting a business, you need to establish yourself as an expert and you can't do that using the like and share buttons.

“Setting appointments is how you generate business. Setting appointments. Every. Single. Week.”

But don't rely solely on social media marketing

PEOPLE make purchases. PEOPLE make referrals. PEOPLE are who you have to get out and meet, face-to-face and build relationships.

Social media is a supplement to real world interaction, not a replacement for it. In-person networking is where my best leads come from. When you find the right kind of organization, you actually look forward to attending the meetings/events because you know they will be productive.

So find the right real world networking groups (you'll need more than one) for yourself and make sure you're having a face-to-face meeting with at least five new people per week.

Setting appointments is how you generate business. Setting appointments Every. Single. Week.

You can get lucky and generate business running social media campaigns, but the tried and true method of generating business is to set appointments and go talk to people every single week.

If that's not something you're willing to do, you may want to reconsider whether or not starting a business is for you. It's not for everyone. For some, a better solution is to start a side hustle instead of a business.

Conclusion

Only after you address everything I've written above does it matter how good you are at what you do.

I never previously understood how a general business degree or an MBA could be useful because they aren't specific to any type of business. After starting my own business, now I get it.

It doesn't matter what the product or service is, the tenets of running a business are universal. This is why the sharks on Shark Tank are able to evaluate any business idea that comes before them.

I hear "great" business ideas all the time from people who are clueless about business, like I used to be. But through the hard and ongoing lessons of running my own business, I'm able to see all the ways that a "great idea" is not so great, beginning with the originator's complete lack of understanding of what it takes to actually run a business.

So if you want to start a [your skill set] business, understand that you'll spend five or ten percent of your time on [your skill set] and ninety to ninety-five percent of your time on business activities. This is what a day OFF looks like for me. A typical workday doesn't include me having a camera in my hand.

I hope someone finds this useful. I tried to put it in a logical order, but there really is no order. You have to do everything all at the same time, all the time in order to get a business off the ground.

If I convey nothing else, I want to convey that It. Is. Hard. Whatever that skill is you have or that thing you're passionate enough about that you want to earn your living selling it, just know that you're going to spend almost no time doing whatever that thing is. Your time and energy will be spent running a business or you won't be in business for long.

This is the first post on my new business-focused blog. There won't be any photography on this blog, just business content where I share knowledge I've gained the hard way so hopefully you don't have to. If you found value in this post, subscribe and share it with someone you think might benefit from it.