What Do You Need Your First Business To Do For You?
When I was a sophomore undergrad, utterly penniless and with about forty five minutes of free time a day after a full courseload, my part time on-campus job, babysitting gigs for my Professors, and, you know, eating, I started my first business.
Sort of. You see, I had one skill that I thought I could translate into some extra cash–I crocheted. And every time I put on one of my new handmade hats or scarves, someone would inevitably croon, “OMG! That’s so cute! You should totally sell those!” Every time I walked through the mall, I saw hats and cowls just like the ones I was making selling for thirty bucks a piece. “Thirty bucks?? That’s like, four cases of Ramen. I could totally make that myself.” So, one day, I stayed up late, thought up (what seemed at the time like) a clever business name, and registered it on Etsy.
Yes, I was full of that new-venture excitement. I painstakingly illustrated myself a little business logo in avatar and web banner sizes, read through every site FAQ, printed out shipping charts, and agonized over my three-paragraph bio blurb. I subscribed to some relevant-sounding email newsletters. And I made three things, just to “see what would sell”, and waited for the sales to start rolling in.
Here’s what I spent no time doing:
1. Calculating how long it takes to crochet a thing, and how much I might be able to sell that thing for.
2. Performing the very simple math equation that would have told me that my prices were netting me less than two dollars an hour.
3. Researching who was selling what I was selling, what they were charging, and why someone might be persuaded to buy mine instead of theirs.
4. Going out and, ya know, finding some customers instead of waiting for them to find me.
Oh, and let’s not forget how I had zero plans on handling (meaning, declaring and paying taxes on) any income that I made, actually registering my business name as a business name, and handling growth. Luckily, those problems were taken care of for me, since I experienced virtually no sales or growth to worry my little head about.
When I started out, I didn’t know how much I didn’t know. I thought I had to figure it all out myself… somehow. You know, bootstraps kind of thing. Now, when I go to a craft fair– I talk to the lady at the table selling homemade scarves. I have so. Many. Business cards. When I see a cute overpriced cowl at the mall, I try to get an email of the guy who has the email of the guy who talks to their supplier. And most (!) importantly… I understand the scope of what I want my business to achieve for me now.
First Business Illusions
As an undergrad, I was desperately casting out my net in any possible direction, trying to figure out what I could do to drag in even an extra twenty bucks. I needed to be able to do this in between classes. While I had two or more toddlers running around with my balls of yarn. I wasn’t looking to quit school, throw all of my time and energy into this, go public and start hiring… I dunno, yarn-untangling Assistants. And that’s okay. It’s what I needed at the time.
Which brings us to the question–what does your business need to do for you? How much time do you have, or are willing to donate, to this venture? Is this a side-project to get a little extra spending cash, or your livelihood? How much do you need to make to make it worth it for you, and in how much time? How much do you know, and how much don’t you know? Who does know what you need to fill in those gaps, and how can you get in touch with them?
Are you looking for seed money to purchase equipment, hire some designers, and build a client base, or are you staring on a wing and a prayer? (Or a ball of wool worsted and a size H hook?) Do you need a Point of Sale solution, or will a Paypal or Shopify account cut it? Turns out, those questions had to be answered even before “what do I sell” and “who do I sell it to?”. Which is why, when I read somewhere that most sales on Etsy are made by shops with at least 100 listings, I started feverishly churning out potholders, instead of coming to the conclusion that my time is much better spent securing a very few, high-priced commissions, instead of generating a large enough bulk of merchandise to make a profit, based on the my goals and time requirements.
You don’t need to build the business that people tell you you should be building, you need to build the one that aligns with your available resources and goals. If I’d defined that, and had a better sense of scope and purpose from the beginning, I would have spent my time, energy and focus differently. And avoided filling my dorm with potholders that nobody wanted. Well, live and learn. Need a potholder?