I’m going to say something that will make professors in MBA programs a little angry: the basics of business aren’t actually that complicated.
Business gurus love to wax on and on about A/B tests and operating plans and complicated spreadsheets showing this projection and that market data. But let’s be real: those are the basics of business the way calculus is the basics of mathematics.
The actual basics — the things that are actually going to make the difference between having a business and not having a business? There are only five of those:
- Your IDEA. What is something you can do or teach or build that other people can benefit from?
- Your AUDIENCE. Who are you for, and what do they need to hear from you?
- Your MARKETING. How is your audience going to find out who you are and hear what you have to say?
- Your PRODUCTS. What can you offer to your audience that so perfectly meets their needs that they’ll not only be willing to pay — they’ll be happy to?
- Your SALES. How will you get your products in front of your audience so they know what you have to offer — and they can pay you?
That’s not to say that building a business is easy. To quote a certain entrepreneur you may have heard of:
Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains. – Steve Jobs
In this post, I’m going to walk you through the five basics you need to start a business. Nail these five, and you’ll be on your way to building a successful business of your own — no operating plans or spreadsheets required.
Business Basic #1: Your IDEA
If you’re expecting some affirmational mumbo jumbo about how there are no bad ideas, sorry to disappoint: there ARE such things as bad business ideas.
Five-toed running shoes for horses? That’s probably not a great business idea. On-demand dry cleaning for college students? Have you seen how college students dress, and do you know what their budgets are like?
There are two defining features of a good business idea:
#1: It’s something that you’re authentically interested in and passionate about doing.
#2: it’s something that customers will be willing and able to pay for.
Each us of us has a hidden universe of business ideas in us. The trick is just recognizing them when we see them.
Here at GrowthLab, we’ve helped thousands of entrepreneurs generate tens of thousands of ideas (and leave most of them behind, but we’ll get to that piece of the puzzle in a minute). We’ve noticed a few patterns that the ideas that entrepreneurs run with tend to follow:
- People already ask for your help.
- Someone has told you, “You should blog/vlog/coach about this.”
- You’ve watched people close to you struggle with it.
- You had to figure out how to do it yourself (or still are).
- It’s how you want to spend your time anyway.
Finding an idea you’re excited about is important, but it’s only part of the picture. To really know whether or not your idea will work as a business, you need to know whether it will actually make money. And to know that, the question you need to answer is: Will people actually pay me money for this or not?
To help you find the answer, we developed a little tool called the Demand Matrix. What this does is help you map out the potential profitability of your ideas based on two key questions:
Question #1: How many potential customers are there in this area?
Question #2: How much money will those customers be willing to pay for the solution to this problem?
Map them all out by customers and price, and the matrix looks something like this:
That last category — the one where there are a lot of customers AND those customers are willing to pay good money to have a problem solved for them — that’s your Golden Goose idea: the idea where, if you can find the right Audience, the right Marketing channels, the right Product, and the right Sales strategy, you can unlock huge amounts of earning potential — and solve a problem that’s meaningful to a large number of people at the same time.
ACTION STEP: Take the ideas that you came up with and put each one in the category on the Idea Matrix where you think it belongs.
Business Basic #2: Your AUDIENCE
Once you’ve settled on THE idea — the idea that you’re excited to work on AND you know lots of customers will be excited about — you’re ready to move on to the next business basic: getting to know your audience.
You might “know” your audience. For example, if your idea is fitness advice for new moms, you might know, intellectually, that your target audience is women who have had a baby recently and want to get back into shape.
But there’s a difference between knowing who your audience is and really knowing your audience. For example:
- What are their hopes and dreams related to your topic? Is their goal really just to lose 30 pounds? Or is it to feel confident putting on a bathing suit when they go on vacation this summer?
- What are their pains and fears? Do they feel self-conscious about going to the gym because they’re worried about people judging them?
- What are their barriers or obstacles? Do they have trouble finding someone to cover day care so they can squeeze in a workout?
- What is the EXACT language that your audience uses when they’re talking about the problem? Do they really talk about “losing 30 pounds” or “getting in shape”? Or do they talk more about “feeling like myself again” or “feeling confident and having energy”?
The deeper you dive into your audience’s mindset, the clearer your picture of who they are and what’s important to them will become. And that’s insight that will serve you throughout the lifetime of your business, from writing blog posts to building your products to creating sales pages.
ACTION STEP: A few ways you can start getting to know your audience on a deeper level:
- Search keywords related to your topic on Google to see what kinds of ideas related to your topic are already out there.
- Browse products and books on Amazon to get a sense for how people are trying to solve the problem now.
- Check out Q&A sites like Reddit and Quora to see what questions people are asking about your topic.
- Talk to people in your target audience to hear directly from them, in their own words: what do they want, what do they need help with.
Business Basic #3: Your MARKETING
Once you know who your audience is, your next step is putting your ideas out there and letting people know that you have things to say that are worth listening to.
In fancy business term, this is called marketing, but really all it comes down to is getting attention.
If the words “self-promotion” make your skin crawl a little and your eye start to twitch, say it with me: self-promotion doesn’t have to be skeezy. Just keep your focus on your audience and what you want to do for them, instead of “me-me-me” marketing that’s all about who you are and why you’re awesome, and poof — those icky self-promotey feelings will disappear.
Marketing is a place where it’s easy to get hung up on tactics. This guru or that thought leader will tell you that Facebook is dead and it’s all about Instagram now, or if you’re not on YouTube then you’re going to fail.
All of that is noise. You want signal. And to find the signal, you need to focus on three key questions:
- Who is my audience?
- Where do they live online?
- How can I be where they are?
For most businesses, there are three main fronts where the war for audience attention will take place:
Your website. This is your home base. Whatever you do, whether it’s a blog post or a YouTube video, you ultimately want it to lead back to your website. (This is also where your products will live once you have products. So yeah, pretty important.)
Your email list. This is the strongest tie there is between your growing audience and you. People are sensitive about spam and picky about who they let in their inboxes, so if they are willing to let you send them content directly, that’s huge proof that you’ve won their trust and they value what you have to say. (Your email list is also how you’ll let people know that you have a product they can buy once you have a product.)
Your marketing channels. These are all of the creative ways you find to let people know you exist and keep them coming back to hear what you have to say. There are a couple of forms that that might come in:
- Guest appearances on blogs, podcasts, or YouTube channels that your audience already knows and loves
- Blogging on your own website, and then ranking on Google for search terms that your audience is looking for
- Posting on social media sites like Instagram using hashtags that your audience uses related to your topic
When these three pieces work in harmony — when you put the right message in front of the right people in the right places — what you get is a well-oiled, audience-growing machine.
Lather, rinse, repeat.
ACTION STEP: Make a list of 5 places on the internet that you know people in your target audience spend time and look for information related to your topic.
Business Basic #4: Your PRODUCTS
Let’s recap. Up to this point you’ve:
- Found an idea that you’re excited about, and your audience is willing and able to pay for
- Gotten to know your audience (maybe even better than they know themselves)
- Marketed your idea by creating high-quality content and putting it out there where your audience can find it — and you
Now you’re ready for the fun part: designing amazing, high-quality products that so perfectly solve your audience’s problem, they won’t just be willing to pay money for them — they’ll actually want to.
That’s right: I said people will be actively excited to give you money. I’ve seen it happen firsthand:
As for the form that your amazing products come in? That’s between you and your audience, depending on who they are, how they like to get information, and what you feel is the best way to communicate your value. But we have some suggestions.
Let’s go back to our example of helping new moms get back into shape. A few examples of products you could build:
- An e-book full of healthy recipes that a busy (and exhausted) new mom can throw together in under 15 minutes
- A coaching program where you guide clients through a personalized training program for their needs
- An online course that lays out a three-month fitness plan for new moms, with increasingly challenging exercises as their fitness levels improve
- A paid community that connects members with other new moms working to get back into shape so they can swap fitness tips and parenting advice
Helpful link: A beginner’s guide to information product ideas
ACTION STEP: Brainstorm 5-7 ideas of products you could create based on what you know about your audience and what they need.
Business Basic #5: Your SALES
Once you have your product ready to go, you’re ready to tackle the final basic of building a business: putting it out there and selling the thing.
The great news is, if you’ve followed the steps we’ve outlined up to this point, most of the things you need to start making money will already be taken care of.
- You’ll already know who your target audience is.
- You’ll already know how to talk to them, and what aspects of your product they’ll be most excited about.
- You’ll already have a community of potential customers on your email list who you’ve been steadily building a relationship of trust with thanks to your next-level content.
With those big-picture items checked off, the last few things on your to-do list are:
- Deciding on a price that feels comfortable based on your audience and the amount of detail in your product
- Creating a sales page that introduces the details of your product and why it’s awesome
- Writing and sending some sales emails to your list to let them know that your product is available for purchase
Just like that, you’ll see the sight that feels like magic no matter how many times you see it: people, sending you money for a thing that you’ve created.
And the money isn’t even the best part (although we’re not going to lie — it’s nice). You’ll also start to get messages from people telling you how much they love your product and how much you’ve helped them.
That’s what building a business is really about at its most basic: creating something of value. Something that means something to you and the people you build it for.
ACTION STEP: Take the product ideas you generated above, and assign each one a potential price, based on how complex the product is and how much value you think it would bring to your audience.
You CAN start an online business
If you’ve finished reading and you’re thinking to yourself, “Huh — that doesn’t sound so bad. That actually sounds … kind of … doable,” good. Because it is. But that doesn’t mean that you won’t need help along the way.
That’s what I want to offer to you now.
Input your email below, and I’ll send you our Ultimate Guide to Starting an Online Business.
In the guide, you’ll get:
- Proof that you can have a successful online business
- Online business models to start a low-cost, high-profit business
- How to become the type of entrepreneur who makes 6 figures online
- How to get beyond “online business ideas” and find YOUR online business idea
- Simple tools to make your first $10,000
This is the exact framework that thousands of our students have used to master the basics and build profitable businesses of their own. The only difference between those students and you? They got started. Will you?