Start Your Business
Start Your Business in 7 Days
James Caan’s Start Your Business in 7 Days is a book that addresses seven steps to start a profitable business and the most common mistakes along the way. In this book you answer questions James Caan asks to confirm that you are true to yourself and your idea for business is good.
Seven days is selected as specific time period for pacing yourself and structuring your decisions. At the end of the seventh day, you may conclude that your idea does have real commercial potential. But equally, after those seven days are over, if not before, you may also decide that your idea is simply not going be profitable. That is not a failure, that is victory, because it will save you time and money. The learned experiences can now be used on another idea, which may be the one that works for you.
Day 1: Is my idea really a business?
You have to be clear about your business idea not being a hobby. If your idea fixes your personal issues it does not necessarily mean that it is a profitable business idea. For instance, if you hurt your back while you dig with shovel and then you come up with idea of a shovel that prevent your back from hurting, it is not inevitably idea that sells.
Don´t fear for someone stealing your idea. It is good to get feedback from, for example, your friends and family. Because many times you fell in love with your own idea so you might not see the faults in it.
Day 2: Does my idea work?
To analyse your idea, you have got to do your research. First, be clear about your competitors and how you will differentiate from them. Be sure where you have the edge on. Is it in price being lower or are you more expensive than the other company providing the same product or service. It is important to think how “niche” your idea is. Does everyone desire your idea or is it for a smaller category of people.
Day 3: Have I got an order?
Get your first paying customer and serve him/her well. They could be from people you know but best would be if you get an actual client, who you do not know beforehand. Try to get a review after the purchase because as an early-stage enterprise it is vital to have references.
Day 4: Does my costing work?
You ought to know what everything costs. For many people the cost of financial management might overwhelm you. Your significant costs will be your recruitment. You can earn a certain amount on revenue but how much profit would an employee generate. Calculate the billing the employees bring and what is the point you can separate yourself from the work you hire someone else to do. Remember to value your own time. At some point you need to be only a manager to your employees, until you hire managers.
Be sure your net profit percentage is anywhere between five and fifteen even when you include discount.
Day 5: Have I put together the right team?
You should build the business like a human body. We have for example a heart, lungs, kidneys and brain that have their own specific role for the body to function healthily. A business is the much the same. When you have all the parts, you must make sure they work together. Team around you means your employees and the cooperation with other entrepreneurs or companies.
Day 6: What Have I missed?
This day is the day to go back and double-check everything. It is important to acknowledge your weaknesses. You always learn more from you mistakes than you do from your successes. Test your idea until you can make it fail. Constantly develop your idea.
This is the moment to consider the possibilities your business could backfire. Understanding your cashflow contributes to understand your business well enough to protect it.
Day 7: Is my investment in place?
There are many options to choose from regarding financing your business to grow even more. If you ask your friends and family to invest in your idea, make sure they know that in investing there is always a chance to lose everything.
Preparing your pitch. Put yourself in the investor’s shoes. If you have reached out to ten or more potential investors without success, then you should stop and ask what it was about the idea that did not work for them. Clear your plans on how much money do you need. You should have calculated how much equity you need and what per cent are you willing to sell.
You need to manage expectations and the unexpected because even the best laid plans will inevitably go wrong. It might be your supplier who does not deliver your product on a certain day or fuel prices rises and affects on transport costs. Or your best salesman resigns and gets hired by one of your competitors.
To be on a safe side, you should understand that seven days are not the period when all needs to be done. But it is there to stop you for procrastinating and to encourage to act on your idea and dreams. “Everybody wants to be an entrepreneur” says James Caan, but many lack the willingness to do what is necessary. In this book it is the questions that needs honest answers.
Also, the seventh day is not a time to celebrate fiercely, rather that is where the work starts. There is a ton of paperwork to carry out to get all the permits and contracts for business. For example, taxes are now to be paid attention to. In the next hundred days keep your focus on the job and stick to those seven core questions you have already asked yourself.
Source: James Caan – Start Your Business in 7 Days (2012)