10 Business Lessons I Learned From My First Start-Up
There are 10 Business Lessons I Learned From My First Start-Up. Since then I’ve become a serial entrepreneur and my current business Mindspot Research has been going strong for 13 years now. This story is about how I got here – it’s about books –the real ones.
My first business was called ‘The Student Book Swap’. It was a reactionary business based solely on my firm opinion that college text books were too expensive for poor college students. This first start-up business was driven by my limited budget as a college student and my desire that books be less expensive. I’ve found this to be true over the years too – inventors, serial entrepreneurs and smart people create what they can’t find. They look to make something possible in a space where something currently does not exist. I looked for alternatives to the student bookstore and I could find no other options at the time. The internet wasn’t available – I was lucky if I got enough time in the computer lab to learn how to program. With no alternatives I had no choice. It was on.
Once the start-up decision was made – I looked for allies. I was going to take on the establishment. At least, the only establishment that I knew at the time, the student book store. Was this even possible? This consideration of possibilities I now call a feasibility assessment. I began asking people, “If there were an alternative to purchasing full price books at the books store would you consider it?” I waited outside classes and asked people this question. I was conducting my first marketing research project using a technique called intercept marketing research. Most entrepreneurs are naturals at gathering insights or finding people to gather them on their behalf.
It turned out that three out of four students would consider an alternative to the student book store. It usually sounded like this, “Hell ya I will buy from you.” I now consider this to be the top-box answer “extremely likely to purchase.” I still had no money and no support; however, I had a good idea based on my initial marketing research.
And for those of you who are thinking about creating a business but think it is not possible to create a business without money or resources– all it took was a good idea to create ‘The Student Book Swap’. Well…a good idea and who you know…and I had to find out who I didn’t know yet who could help me.
I did know that I had to get the word out with some kind of advertising and this advertising had to be free. I arranged a meeting with the president of the student newspaper. Prior to my new idea of The Student Book Swap it had not occurred to me to get to know the president of the student newspaper. Fortunately, the president of the student newspaper was waiting for a protagonist to appear. Not only did he meet with me – he agreed to partner me with on this idea of the Student Book Swap Startup.
We negotiated an ad on the full back page of the student newspaper and he provided reporters to cover the opening and our entrepreneurial progress. Apparently there was very little oversight at the time. The advertising was enough to stop you in your tracks (see photo, of course I saved a copy). The president of the student newspaper was what I now call a connector. He was involved with the student theatre and conveniently the theatre concession stand was available for a small rental fee. We set up shop directly across the hall from the book store.
At the time I didn’t realize or care that this undertaking was aggressive. I was solving my problem (and creating about 100 more). What I realize now was that the college and the book store management were very gracious. They could have shut this down. However, I now believe it was their choice to let us learn. We charged 10% of every returned book sale and worked for days collecting books at the end of the session. We then stored all of these books and sold them at the next session. I learned some life-long business lessons and here are:
The Top 10 Business Lessons That I Learned From My First Startup Business
1. Marketing Research: Answer these questions right away: Is there a need for it? Are people interested? How many people are interested? And are they interested enough to claim they will purchase?
2. The Value of Networking: It’s easier to turn to someone who you already know than someone you don’t. Keep your network fresh – add new contacts and reach out to long-term relationships.
3. Scope of Work: It took more work and time than I expected. Spend time up front scoping your projects and initiatives to have a realistic idea of the time and money it will really take.
4. Time Value of Money: 10% wasn’t that much money if you had to hold that much inventory until the session started. Clearly we would need to charge more to make it worthwhile as a for-profit venture.
5. Break Even: Learn how to calculate it. Fixed Costs ÷ (Price – Variable Costs) = Breakeven Point in Units. We had expenses. Make sure you calculate your break-even cost and then set your profit margin to make enough to stay in business.
6. Location Matters: And it always will. Even if you are selling online being in front of your customers allows them the opportunity to buy what you are selling.
7. Opportunity Cost: This is critical. Consider what you are giving up. Ask yourself if the desired outcome is worth it? Don’t forget that everything you get costs you something. Yes, this is always true.
8. Don’t be Afraid to Ask: Success isn’t for those who remain silent. You will need help and Customers. Ask for help often and keep an on-going dialogue with your customers.
9. Customer Service: Customers will come back if you serve them. Make sure that providing outstanding customer service is something you are predisposed to, and if not find someone who is.
10. Experience is the Best Teacher: There’s nothing like seeing your vision actualize. It’s never going to be perfect. Perfect is the enemy of done or in this case launched. Do your best and learn from it.
I sure didn’t learn these lessons from a book; however, I learned them because of books. And books have been with me my whole life. Fortunately, The Orange County Library System (OCLS) is a Client (clearly I’ve got experience) and I borrow my books from them for free.
Lynnette Leathers, CEO of Mindspot Research and Serial Entrepreneur