My Single Best Advice about Starting a Business
by Bob Voss
DCTC Business Entrepreneur Instructor
As an experienced entrepreneur and college entrepreneurship instructor, I have received questions nonstop from hundreds of students looking for advice on how to start a business. I also receive requests for entrepreneurial advice in my position as a counselor for the Small Business Development Center at the college’s Apple Valley site.
A few months ago, a student in one of my classes raised his hand and asked, “Okay, Bob, you’ve given us lots of great advice and feedback, but if you could boil it down, what is the single best piece of advice you can offer about starting a business?”
I said something about keeping focused on customers, but even then I knew that wasn’t the right answer. The question hit me hard, causing me to really stop and think. What exactly was the single best piece of advice I could give about starting a business?
For a few weeks, I pondered the question, but couldn’t arrive at the answer I needed. I came up with plenty of lesser answers, but not the single best answer. Then, as usually happens to us, the answer appeared when I least expected it.
I was watching TV with my son, who had control of the remote and was switching between a baseball game and Law and Order. We were discussing who was the greatest home run hitter of all time. As usual, we were on opposite sides. I was getting frustrated because my son knows a lot more about sports than I do. Just to end the debate, I said, “Yeah, well, prove it to me.”
Of course, he couldn’t actually prove his point so he switched channels back to Law and Order. I don’t recall the episode, but we returned to the show at the exact moment when the defense attorney made the statement: “This evidence proves my client’s innocence, Your Honor!”
I had heard instances of “proving it” twice in 15 seconds-and the words hit me like a ton of bricks. Was “proving it” the single best piece of entrepreneurial advice I could give my students?
Over the next month, I thought about this concept a great deal. Finally, I came to the conclusion that “proving it” is, in fact, the best advice I can give about starting a business. Since that revelation a few months ago, I have tested the concept of “proving it” many times and each time the results are the same. The more you can prove at the outset, the better your chances for business success.
If you are thinking of starting a business, then your first job is NOT writing a business plan to promote your new business idea. Your first job is to create a PROOF PLAN to authenticate your new business idea.
Business plans deal in speculation, industry trends and guesswork. PROOF PLANS deal in real numbers, real customers and, most of all, real data. If you are thinking about starting a business, here are a few areas that you will need to prove it:
- Prove to yourself that the life of an entrepreneur is right for you
- Prove to yourself that your prospective business is the right business for you
- Prove that customers will buy from you
- Prove that your customers will pay your price for your products and services
- Prove that you can generate a positive cash flow quickly—then prove you can stay there
During this rough period in our nation’s economy, only start-ups that can provide proof for success will receive funding. Talk to any banker. If you can’t prove that you will pay back a loan, what are your chances of receiving the capital you need? Investors need to see proof before they will part with their money. They will balk at the words, “I think…” They are looking for the words, “I can prove it.”
Proof comes in many types. Interviewing potential customers is a type of proof. Surveying potential customers and compiling the surveys is a type of proof. Working in the industry associated with your business is a type of proof. Having experts endorse your business idea is a type of proof. Obtaining certification in an area connected to your business is a type of proof.
The best and ultimate proof, however, is still a satisfied customer. Prove it with lots of satisfied customers and your business is sure to succeed. Look for more insights and advice on “proving it” in future columns. For answers to questions about becoming an entrepreneur or starting a business, please e-mail me at email@example.com or visit www.dctc.edu.