Starting a New Business Is Always Scary. But You Can Minimize the Risks by Acting on These Great Advice.
Starting out is confusing and by far the hardest part of the journey. By the end of this Sunday motivational article, you’ll walk away with the most valuable advice and lessons that over a decade in business has taught us.
We want you to realise that:
Every successful person was once in your shoes!
Feeling what you’re feeling right now and anxious about what the future holds for them.
Every master was once an apprentice!
So we want to be for you, the teacher we’ve never had! You might want to take notes and see where you stand on each of these.
As always, here is the video version of this article:
Here are 15 Business Advice We Wish We Got When We Began Our Financial Journey.
Start With the Imperfect Version, But Start Now
There’s a saying going around in Silicon Valley that goes like this:
If you’re not embarrassed by your launch version, you launched too late!
Beginners fall in the trap of perfectionism all the time.
The truth is the sooner you get in front of your potential customers the quicker you realise what needs to be improved.
Stop with the nonsense: Launch now, get the ball rolling and polish it along the way!
Sales Solves Everything
In business, nothing matters but sales. Your ability to generate sales is what will make or break your business.
Sales means money is coming in and there is a demand for what you’ve got to offer.
Unless you master sales, you don’t have a business, you have a hobby!
Your website might not be perfect, your packaging not great, but none of this matters unless you’re able to convince someone to give you their money.
Hire Fast, Fire Even Faster
When we started out we wanted to be personal friends with everybody we hired. We know.. A pretty human thing to do. The problem is that the relationship you have with your friends has a completely different dynamic than the one you have with your employees.
We treat everyone with respect, we’re there for them in case they need help, but this is a business. Our agreement is that we will pay your salary on time and in exchange we expect you to deliver the agreed upon work on time.
This distinction right here is what allowed us to deliver one of these piece of content every single day for so long.
Our advice is to hire fast, test out and see if they fit with your company’s business culture. If they don’t, fire them. When you’re looking to build great things, you don’t need to get caught up in your feelings.
There’s a big difference between running a business and running a charity!
Focus on 1 Thing Only
Ask yourself: What does my business do?!
Then focus on doing that to the best of your ability!
This means figuring out:
1. How to improve the quality of your product
2. How how to reduce the time it takes to produce or serve a customer
3. What can you automate or at least outsource
4. How can I get in front of more people who need what I sell
That’s your job. From the smallest street-salesman to the highest ranking CEO, they’re all trying to figure out how to do these 4 things.
Do not get distracted by shiny objects! You’re not in that business, you’re in YOUR business, so take our advice and act like it!
Set Bigger Goals
When we were starting out we set our goal to get to $1 million dollars. This was the goal. We taught if we could only get to this one goal our entire life will be set.
It took us 7 years from the moment we started with less than $10 in our bank account to get to 1 million and you know what happened when we did?! It didn’t feel like we made it. Sure, the title is nice, but we realised that the goal wasn’t 1 million, it was to feel financially free, that we had enough money to never have to worry about money again.
When we were starting out, in our minds a million dollars would solve that, but we had to get there to realise it isn’t enough.
So now we’re going for 100 million, because why the hell not?! Now we have money, we have knowledge and we’re living in the most prosperous time in human history.
Here’s the lesson:
It takes between 7 and 10 years to reach a big goal!
So you might at least set a really big one!
Setting goals strategically and building a framework on how to get there in time is the difference between those who wish they had success and those who plan for it. Everything we’ve learned in our journey from getting to 0 to 1 million we put in the Goal Mastery course available at goalsbyalux.com
People were blown away by it, which is why we’re maintaining a level of exclusivity. Make sure you’re on the email list for when we reopen later this year. It will be available for enrollment for 1 week only, so if you miss it, you might have to wait 6 more months to get in.
Nobody Cares About the Business as Much as You Do
In time you will hire a bunch of people, they will all work hard, but nobody has the skin in the game you have for this business to succeed. For you it’s personal, for them, it’s just business.
You can not expect the people that work for you to have the same vision and burning desire to expand the way you do.
This applies to people who position themselves as experts who are meant to help you grow your business.
Nobody knows your business the way you do. Everytime you sit at a table discussing your business there will always be an asymmetrical distribution of knowledge and vision.
Talk to Lawyers and Tell Them Your Long Term Plan
A call with a lawyer will cost you a few hundred bucks, maybe a thousand. But this call might save you a lot of time and pain in the long term.
Fortunately for you, business from a legal perspective has been pretty much standardised. We have templates for every possible contract out there, the thing is: you don’t know which ones to have your people sign and what kind of impact they have on the long run.
A decent attorney will get you set up in no-time. This is incredibly important especially if you want to sell the company at some point.
Get a Good Accountant
Legal will take care of the paperwork, the accountant will take care of the money.
Accountants will give your business more fuel for it to grow. They will make sure you’re in good standing with the state and knowing everything is taken care of on the financial side is such a flex.
As a rule of thumb:
A good accountant pays for themselves tenfold!
Have Money Set Aside for Opportunities or Rainy Days
The business needs to be sitting on some cash at all times. You never realise the importance of cash until the best opportunity passes you by because you didn’t have the money do play.
As a golden business advice:
You should always have at least a 6 month runway!
This means you have enough money in the bank to keep paying rent, keeping the lights on and your employees… well, employed, for up to 6 months.
As a founder, you’re the least one to get paid in times of trouble, so make sure you’ve got something saved up yourself.
Use Leverage as Much as Possible
The most valuable business advice we can give is about the concept of Leverage and using multipliers. We talked about this before, but it’s a game changer.
Multipliers are there to scale your business! Here’s how this works.
Let’s say you have a cookie business.
People are a multiplier: if you bake cookies alone, let’s say you can do 100 cookies per day. You hire someone else, they might not be as good as you but they’re doing at least 50 cookies per day. Bring another one and you just replaced yourself as a baker. You are now putting on 0% of the baking time, but getting 100% from what’s left after you pay the 2 people.
Machines are a multiplier: if you get a bigger and more professional oven, you might bake twice as many cookies at the same time. This doubles your output through technology.
Websites are a multiplier: You used to sell cookies in your brick and mortar store and you still do. You get around 100 customers per day you walk into your shop. But now you set up a website and sell your cookies nationally. You sell 3 times as many online as you do offline and things are picking up speed.
Ideas are a multiplier: One day you have an idea for a fun video. You create a tiktok page, make a funny video and it goes viral. You just increased the sales from your website by 30X.
Stack all these together and you can rapidly grow your business using multipliers.
You’re in the Buy Low, Sell High Business, Figure Out Your Numbers
It takes a while, usually a few years until you understand you’re actually in the buy low sell high business. No matter what you do, every business is in the buy low sell high business.
It might be simple, like products, or it might be more complicated like software or services. You’re still paying someone to write code, cheaper than you sell it for.
The quicker you realise that this is technically what your business is, the quicker you can have a look at your numbers. How much are you paying to get your product or service out the door to your customer? How much are you charging for it? What is the difference?
Can you buy it cheaper than you do right now? How?
Can you charge more for it? How?
Business is a number’s game according to our advice! Figure out your numbers!
Who Is Your Customer and What Do They Want
The second thing on this list was: sales solves everything!
The evolved version of that is knowing your customer and what they want. The more you learn about them the better you will be at both putting together your product and selling it to them.
A mistake we’ve made in the past is ASSUMING we know what the customer wants. We invested a lot of money into things the customer didn’t want.
A valuable advice in business:
Never ASSUME, you’ll make an ASS of U & ME!
Learning from someone else’s mistake is a smart thing to do. Check out 10 Biggest Business Mistakes in 2020.
Figure Out Where the Puck Is Going and Get There First
Many of you know that ALUX was initially one of the biggest publishers in the luxury space online. Our website still has thousands of articles, written on everything luxury. Until one day when we asked ourselves… how often do we actually read online articles in our spare time? How is the average person using the internet?
We figured out that video is a much better consumption experience for the user and that video will soon take over. We risked everything, took all the money the website was making, retrained our staff, hired a bunch of new people and got to making the videos on our channel that you know and love.
Taking risks leads to progress!
See where the puck is going and make sure you’re already set up before it gets there!
Building a Brand Requires Building a Community
When we started out we were ignorant. We taught building a brand means having a few colors, a logo people like and a few keywords they associate with you.
In reality: A brand is the sum of all experiences and emotions people have with your company!
The way you’re treated at the reception of the hotel is as important as the job the housecleaning staff does.
In order to build a brand, you need to build a community around your company, of people who are having positive feelings about what you do.
That’s why we take pride in the quality of the people who subscribe to our channel. These are visionaries who see what we are trying to build and how we are systematically changing the way education is done.
Stay Humble, Put Your Head Down and Keep Working
Here’s an advice nobody gives you when you’re starting out in business: there is no phase in which you step aside and the business runs itself. There’s no such thing as a passive business. The 4 hour work week is a lie and even Tim knows it.
It will be a grind, but it will be a pleasant one, for you are working for yourself and your future. You chose to do this, nobody made you. You could’ve gotten a job at a bank, but you said nah.. I want to do this other thing.
Every morning we wake up we feel blessed that we get to do what we do for a living and that our future is under our control. We don’t need pats on the back from anyone, we are just happy doing what we do.
There are plenty of specific pieces of business advice that we found valuable along the way, but we want to pass this on to you, the Aluxers: What is one thing you wish you knew when you started your financial journey?
Let us know in the comments below!