June 17, 2010

How to Create a Business, Apparently: First Round of Lessons Learned

It has been about a month and a half since the idea of owning a coffee cart popped into my head. Holy crap, it seems like months have passed. I have wanted to write about the process thus far, yet have held off. Partly because some things are still somewhat confidential, like our specific marketing strategies, our company name, and where we will be setting up.

Also, I wanted to fully grasp the process, before pretending I already knew by writing about it. Since I have now hit my stride and things are progressing, I want to talk a bit more about it.

There are several things which I did not know, and because of which, I have probably wasted a lot of unnecessary time. To save all of you potential business owners some time, I'll tell a little bit of what I have recently learned.

Anyone can start a business.

Simple idea, right? Yes, but with many misconceptions which keep it from becoming a reality for most people. All your life, you hear about big businesses starting out as a mom-and-pop shop or with just one, hard-working man. Yet it is hard to reconcile the idea that you could be that one, hard-working (wo)man. You naturally assume that he or she must have had a large start-up capital, sharp business acumen, or something which gave him a kick-start.

There were several, recent occurrences which shifted my mind into thinking I could be a business owner. One was my friend, Sydney. Shortly after meeting, we talked about how I desperately want to work for myself. She revealed that she has not only owned businesses, but also currently works as a self-sufficient photographer. She doesn't work for anybody but herself! Moreover, she is around my age.

Mind. Blown.

In quick succession, I began to meet other entrepreneurs at random, began talking to anyone who may know a thing or two about business. I opened my eyes. I saw the burrito cart at the corner of 17th and Market, being run by an aging couple, neither of which speak English. I saw the pedi-cabbers on 16th Street: I stopped focusing on their sexy muscles and started seeing that they, too, worked for themselves. I heard more and more stories about people of my same generation who earned a living without ever stepping into an office.

For the first time, I had a vision of how that could and would be me. I thought, "If these people can do it, I can too!" Yes, sometimes the inside of my head really does sound like a motivational campaign.

It is hard, but not in the way you think.

That afternoon in the park when Kortney and I began to brainstorm, we thought in an off-handed way, "Oh, sure, it'll be hard." Coming up with the money was the main issue, seeing as how neither of us have expendable income (thanks to expensive divorces and the subsequent Bender of '08). Yet starting a business becomes hard long before you get to the point of actually needing money.

What? Don't you just need a business license or something? Yes, as well as a bajillion other kinds of licenses and permits. After many hours of research, I began to realize I was working in circles. We couldn't pick out a cart until we knew what the health department's requirements were. We couldn't pick out a location until we knew what the public works department's requirements were. And so on.

Finally, I created an organizational chart of sorts so I could sort out the process visually:

What you don't see in this picture are my many notes attached to each box: questions to ask of which department, contact information, reasons why we cannot handle a particular issue right now.

The individual forms are not hard to fill out and the business terms are not hard to learn. Yet, the difficult part is all mental: keeping your mind clear, staying organized and focusing on the next step. It was only after creating the above diagram that I realized the first step: the business plan. Start with that. It isn't just a fluffy report to show others. Through its preparation, you will learn what you want your business to look like, how it will operate, and what will come next. (I will elaborate on this more in the next post.)

It can be very hard to stay motivated.

Unless you are independently wealthy, you probably cannot afford to quit your job as soon as you decide to be a business owner. Rather, you have to keep dragging yourself into the office every day, setting aside your dreams in order to help your boss realize his. Day after day, you are wasting time which could be spent on your business. This has a way of wearing down your drive to a sad, little nub.

Then, to make your goal seem even more out of reach, you encounter complication after frustrating complication.

There was a time when my own mom talked about operating a food cart. She had a cute name picked out (Katie's Casseroles), she had an idea of who her customers would be, she knew what kind of food she would serve. She talked about the idea with friends and family, many of which strongly encouraged the idea. But then, she gave up. Despite being very intelligent, she hadn't realized how rigorous the process would be, how many permits, inspections, and licenses a food business would entail. The idea never manifested itself beyond fanciful thinking.

Originally, Kortney and I had had the idea of operating our coffee cart in a part of town with a lively nightlife. We would work on the weekend nights, serving coffee to people leaving the many bars and clubs in the area. What a swell idea! Having spent many weekends frequenting those bars, we knew there were no coffeeshops in the area, especially at that late hour.

But then we came across the first snag: vendors who are operating on public property cannot serve past midnight. That was irksome, but it didn't stop us. What did, however, was when we were heading to Falling Rock for dinner one night. We turned the corner and, parked right in front of our favorite bar, looking like an enormous metal pill we were being forced to swallow, was this:

Oof. Not only was it a coffee cart (of sorts) in the area we had been scoping for weeks, but they were also parked right in front of our bar. Right in front, meaning they were blocking the parking lot and the view from our beloved patio. After talking with our friend who worked at the door, we discovered the cart had just been set up the day before. The day before. Let that sink in. Also, because they were parked on private property, they were able to stay open until 2 a.m.

We felt like we had been sucker-punched. Our whole idea for the business, for what made us stand out, melted to the ground, mixed with the urine in the gutter, and went down the drain.

This was a blow, for sure. For a few days afterward, we didn't talk business at all. We moped. But then we began thinking of ways we could overcome this obstacle. We thought of where other coffee companies may be lacking and how we could improve on those ways. What did we have that this commercially-hip competitor didn't?

And that is why I think many great business ideas never become realized: rather than adapting and improving after encountering a major speedbump, they just quit. We didn't give up: we evolved.

As for that Airstream, they are gone now. They couldn't pull enough of a profit to maintain their costly rent, as well as all of their fancy luxuries (which we can't afford in the first place...little company = little overhead). Not to mention, our bar made it clear that their presence in its parking lot was unwelcome. Yay for Falling Rock!

Listen and learn from others.

This isn't like with your wedding or the birth of your first child, in which everyone has an opinion and 99% are unwanted and unsolicited. Starting a business should be a village effort, in that everyone has something valuable they can provide to you. My grandma, who retired from the IRS, has given me a lot of technical information about taxes and business designations. Kortney's friend, who flips houses, shared his knowledge of securing investors. Several people have passed along ideas about additional services or ways of marketing, which we will actually be implementing.

Okay, enough for today. Check back for a more detailed, step-by-step post about starting a business.

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