Editor’s Note: This is a guest post from Justin Spring.
On Friday nights, most testosterone-driven high school guys head out to the football field to either put on the pads or chase after the girls in the stands. I went to turn a profit.
At 16 years old, I started my first business among the throngs of a community gathered on muggy summer nights to cheer on the home team. Cheering means one thing: yelling. And yelling means that people will have tired, sore, dry throats.
For the penny pinchers unwilling to spend concession stand prices for their carbonated relief, the school had conveniently provided a pop machine in the stadium that would deliver an ice-cold can of heaven for 50 cents.
This pop machine had a particular quirk that lent itself fantastically to my young entrepreneurial spirit: it stubbornly required exact change.Â
A lot has changed since 1998, but one thing hasnâ€™t: nobody carries exact change. I set up shop beside that beautiful, glowing, humming machine and offered people exactly what they needed: exact change.
For a small fee to compensate my kindness and service, Iâ€™d sell them two quarters. Because they needed to soak their thirst, theyâ€™d gladly give me one dollar and Iâ€™d kindly give them two quarters, easily turning a $10 profit each home game.
It wasnâ€™t much of a payday, granted, but I learned five invaluable lessons from that pop machine that helped me build the two successful businesses that Iâ€™m running today.Â
Lesson #1: Be Necessary
If Iâ€™d sold can-koozies at the game, I have a hunch that I would have had far less success. Why? Because people needed a cold drink, not a holder for one. In my experience, Iâ€™ve learned that there are two types of business ideas: 1) â€œIt would be nice ifâ€ ideas, and 2) ideas that make necessary things better.
Here are three questions to ask yourself to figure out if you have an “it would be nice if” idea or one that makes necessary things better:
- Does this help someone do a necessary action more easily? Does it make someoneâ€™s job, responsibility, or task less of a pain in the neck?
- Does this idea save someone money? What about time? Will the idea provide a way for people to do something more efficiently?
- Is this idea a game changer? Does the idea change the way that people behave, operate, or think? Will this idea revolutionize an industry? How?
If you canâ€™t answer yes to at least one of these three questions, you have an “it would be nice if” idea on your hands. Proceed with caution.
Lesson #2: Do Something You Know Something AboutÂ
Over the years, Iâ€™ve had hundreds of seemingly great ideas for a moneymaking business. Some of those ideas have since been discovered and turned into great profit by someone else. I should be bitter, right? Iâ€™m not. Hereâ€™s why:
I wasnâ€™t the right man to lead the companies that would be birthed from those ideas.Â
Over the last two years, I have raised over $1 million in investment capital for my technology start-up. All that nerve-conquering, sweat, presenting, and hustle served to teach me an invaluable lesson: the leaderâ€™s story (read: your story) matters.
Your background, experience, and education must align with the business that you are creating. Your business must be a part of you. I was able to raise the necessary capital for my start-up because I spent seven years preparing myself. Before building a digital marketing software product, I built a digital marketing agency. That means that I prepared myself to be the one person capable of executing my new business model.
Everyone has ideas. Successful people arenâ€™t measured by the amount of ideas they have, but by their ability to execute a chosen few.
Lesson #3: Resolve Is Your Biggest Asset
Despite anything that youâ€™ve heard or seen on TV, starting your own business isnâ€™t very glamorous. Itâ€™s a grind that involves obsessive dedication and an unrelenting amount of effort and resolve.
It took five years for my digital marketing agency to fit into the â€œsuccessfulâ€ label. I wanted to quit every single year before that. There were too many hurdles, too many unknowns, too many obstacles for the company to thrive. Many late nights, I laid awake justifying walking away from it all.
I canâ€™t tell you how glad I am that I stuck it out. Hereâ€™s the lesson: Your resolve is the real â€œXâ€ factor for your business.
Every start-up will encounter obstacles that will threaten to shut it down. Every beginning business will face seemingly insurmountable odds. Getting your idea off the ground will require your weekdays, weeknights, and weekends. Thereâ€™s no getting around any of that.
To be successful, you must be resolved.Â
If youâ€™re launching out to start your own business, you must be able to answer one question without a hint of hesitation: are you prepared to fight? Will you be willing to stick to the plan even if it seems that itâ€™s failing? Are you willing to make the sacrifices today that might pan out in 5 or 10 years?
Building a successful business from the ground up requires the resolve of Leonidas and the patience of Mother Teresa.
Lesson #4: Doing Something Awesome Requires an Awesome Amount of Side Hustle
When I started my first business (which failed), I had enough cash in the bank to support myself for six months. Young, and without the wisdom of the side-hustle approach, I promptly quit my full-time job and dove into the shallow end of the pool head first.
Two years later, I was renting a bedroom in a friendâ€™s house for $200 a month, driving a downgraded car, eating off dollar menus, and living on a salary that brought in less than $1,000 a month.
I could have saved years of my life if I started growing my business while staying employed somewhere else. If youâ€™re toeing the line and thinking of starting a new business, consider keeping your current job. Youâ€™ll keep your income and benefits, which will help you to make more level-headed decisions about your start-up and its future.
There should be one important caveat here: If youâ€™re side hustling, donâ€™t cheat hours on the clock. Your priority is your current job, and a man with integrity takes that responsibility seriously. Respect the person who took a risk to hire you, keep producing at your desk, and be a valuable contributor to your current company.
Once you get your start-up off the ground, youâ€™ll expect the same from your employees.
Lesson #5: Ideas Are Cheap, Execution Isn’tÂ
I once had a friend approach me about a business idea that he was ready to set into motion. He wanted to build a company that would rent high-quality packing/moving crates in order to keep people from buying (and, more importantly, throwing away) boxes when they had to move. Letting him work through his business model and pricing structure, I noticed an unfortunate flaw: to make any real money off the company, heâ€™d need to have several thousand boxes in circulation. Per week.
Itâ€™s unbelievable how the excitement of an idea can cloud our senses of judgment. It happened to me. And it happened to my friend above, who, despite my caution, dove into the shallow end of the pool head first and quickly realized there was no water.
No matter how great the idea, the numbers must add up if youâ€™re going to be successful. Work through your overhead costs and schematics. Factor in your salary and the costs of your production. Know up front how many sales youâ€™ll need to consistently make (and maintain) in order to turn a profit. Youâ€™re starting a business, after all, not a hobby.
The old adage holds true: You must do the math.
One Final Word
Thereâ€™s one final lesson that the soda machine taught me during those humid summer nights: most people are addicted to convenience. Thatâ€™s what helped me get away with charging a dollar for two quarters. Sure, I was saving them money because my product was cheaper than the concession stand, but I was also saving them time.
A lot of people will talk about starting a business and day-dream about being their own boss. Very few people will actually take the leap and invest the time. And a ridiculously small amount will actually see their dreams come to life.
Thatâ€™s because building your own business isnâ€™t convenient.
Youâ€™ll be misunderstood and frustrated along the way.Â While your friends are busy buying nice cars and going away on fancy vacations, youâ€™ll be pinching pennies to pay the bills and staying up late to answer emails. There are times that youâ€™ll feel isolated and a bit foolish, and will be close to giving up and walking away from it all. When you have these moments, remember this quote, which I used to keep on my bathroom mirror and read to myself every morning:
â€œEvery adversity, every failure, every heartbreak, carries with it the seed of an equal or greater benefit.â€ â€“ Napoleon Hill,Â Think and Grow Rich
Plant those seeds and hang in there. Itâ€™s worth every second.