Step 6: Figure out how you’re going to pay for all of this
So you’ve done the legal stuff, which took a chunk of your savings away...sorry about that, but it was necessary. Aren’t you glad you waited until you knew you had a working idea?
Some ideas are cheap and only require you to devote your time to clients, others require designers, factories, and/or app developers. The latter can get expensive (100’s of thousands of dollars expensive), here are some pros and cons of the different financing options:
Bootstrapping - If your idea allows, you can spend a small amount of your own money to get the idea off the ground. Start small and reinvest every penny you make back into your business. It’s slow going, but you won’t have any debt and can still make your dream happen.
Friends and Family - Asking your friends and family is a great way to build up some startup cash. Many people (me included) do not feel comfortable with this idea, but if you have that kind of relationship with the important people in your life, it could work. Keep in mind what future Thanksgivings might be like if you owe everyone money, though.
Crowdsourcing - Crowdsourcing is an excellent way to raise money and sell your first crop of products, but doing it correctly is hard--really hard. The best campaigns have professionally shot video and expertly written text. If this is outside of your wheelhouse, crowdsourcing might cost you the same amount of money as bootstrapping. However, the upside is potentially huge.
Grants - If you’ve never written a grant before, start by talking to someone who has. They are not fun or easy. On the bright side, if you do get a grant, you don’t have to pay the money back!
Bank Loans - Taking out loans is by and large the easiest option (as long as you have good credit). This is the method I opted for. It’s incredibly easy and the money will be available in days. Downside? Interest rates can be as high as 10-20%, which is a hefty price to pay. Additionally, you may only be offered a portion of the capital you need.
Investors - An attractive option for anyone who needs more than $50,000 to start. This money does not come easy. You’ll need to come up with a solid business plan with accurate projections of the future to “prove” that your idea will make money in a reasonable timeframe. Finding investors is tricky; they get pitched every day so you’ll have to be well-connected. Be weary of what you are signing onto though. Having an investor opens you up to a world of jargon and ways to be taken advantage of. A nice compromise is to look into a reputable incubator (https://www.entrepreneur.com/article/52802) who will help you develop your idea further and introduce you to funding sources.
Step 7: Make your MVP a reality
This step is largely dependent on what your big idea is. Starting a design agency? All you need is a website. Want to make the next iPhone? Well, you’ll have some late nights Skyping with China.
Building products is my favorite part, but (again), entire books have been written on this subject, so check out the links below to help you turn your idea into a reality:
Creating a product from scratch: https://growthlab.com/how-to-create-your-first-product-from-scratch-in-4-months/
How to build a service business: https://100mba.net/the-ultimate-guide-to-starting-a-service-based-business/
Step 8: Launch your product
If you’ve followed my advice so far, you’ve already soft launched your idea! Congrats! Now it’s time to ramp things up. You need a marketing plan.
Like a financial plan, every brand’s marketing plan should be tailored to their audience and unique situation. Again, you can read many books on the subject (and we will be sure to write more - and shorter - posts on the subject). In the meantime here are some high-level thoughts for when you’re ready to launch:
Understand and refine your target audience - The audiences you created on Facebook are pure gold. Spend time understanding what types of people engage with your brand. Look for things like tight age brackets, gender, location (parts of the country/world, city vs suburbs vs rural), and interests.
Be where your customers are - This means understanding what platforms they use. The youngins are on Instagram and Snapchat. Facebook is a great place to reach a broad audience. Very niche groups are on Reddit. And sometimes, the best place to reach your customers are in person.
Create your ideal customer and stick to it - To really succeed in any marketing campaign, you need to understand who is going to be seeing your ads. Write down everything you know about your ideal customer, their average age, gender, likes, dislikes, what they do in their spare time. Create a picture in your head, name this person. Moving forward, before you finalize any ad copy, ask yourself: “What would my ideal customer think if they saw this?” Would they be interested? Or would they not even give you a second thought? What do they need to hear to pique their interest?
Everything you do needs a call to action - Whether you’re making an ad or your 700th post on social media, everything you do needs a call to action, meaning you need to tell them what to do. Posting a cool video of someone using your product? You NEED to tell them that they should buy the item for themselves, and a link to take action shouldn’t be too far away.
Don’t be afraid to pivot - You weren’t afraid to modify your idea when you were testing your concept, you should never take that mentality for granted. Digest every data point available to you and listen to it. The ideal customer you create may not be your ideal customer anymore, or your killer ads might not perform as well as ads you were less crazy about. Whatever happens, don’t be afraid to adapt and change. Something is only a failure if you don’t learn from it. Freely and intelligently iterating are what separates the meh from the revolutionary.
HZQ IS HERE TO HELP
No matter where you are in the process, HZQ is here to help you grow mighty. From helping you test your idea to taking established businesses to the next level, we have the experience and tools to help you do what you love everyday of your life.
Click the button below to schedule a 15 minute chat with us. We have a no hard sell guarantee. We just want to hear where you’re at in the process, lend any helpful advice, and see if we can be of service either now or in the future.