Steps For Starting Your First Business As An Entrepreneur

Thinking about trying your hand at entrepreneurship?

Today we are going to share a ten-step process that you can follow to get your first business off the ground!

Planning is Procrastination!

Look:

Some planning can be helpful. 

However, aspiring entrepreneurs often end up stuck in analysis paralysis and waste weeks, months, or even years trying to come up with a perfect business strategy. 

Moreover, they tend to feel that they are being productive by doing research, reading books, and watching YouTube videos when in reality they haven’t moved even one step closer to realizing their entrepreneurial dreams. 

We believe that the main difference between “wantrepreneurs” and entrepreneurs is that the latter group has an action bias, which is a tendency to favor action over inaction. And the more successful the entrepreneur, the stronger their action bias. 

The truth is that building a business is not that complicated. You need an offer, a way to reach your target audience, and a persuasive sales pitch. That’s it.

So don’t fall into this trap of endless planning because it’s just a form of procrastination. 

Sure, do a little bit of research, maybe over the weekend. Then start selling something and see what happens!

Now, with all that out of the way, here’s a ten-step process that you can follow:

Step #1: Sort Out the Legal Stuff

Before you do anything else, make sure that you can legally operate a business in your area. 

For example, if you want to open a business in the United States, check out the U.S. Small Business Administration website, your state and local government websites, and the IRS website. 

These resources should provide all the information that you need. However, if you can afford it, it might also be a good idea to consult a lawyer just in case.

Also, while you can do your own books, it’s better to outsource them to a professional, so don’t hesitate to hire an accountant if you have the money for it. 

If you intend to serve an international audience, you should also research the laws in the regions that you want to target and make sure that your company is compliant with them.

For example, if you are based in the United States but want to sell your products and services in Europe, your business will need to comply with the General Data Protection Regulation.

Step #2: Limit Your Losses

Survivorship Bias

In popular culture, successful entrepreneurs are often portrayed as mad geniuses who take crazy risks and win big. And sure, there are some famous people who fit that description, but they are the exception, not the rule.

Something to keep in mind here is the survivorship bias: when it comes to risk-taking, we hear the stories of people whose wild gambles paid off, while the stories of those who crashed and burned fade into oblivion.

This can severely distort our perception of the role that risk-taking plays in business success and lead to making bad decisions.

Are Entrepreneurs Risk-Tolerant or Risk-Averse?

According to our observations, entrepreneurs who manage to build successful businesses tend to be more risk-tolerant than the average person, but they are also way more risk-averse than the popular culture would have you believe. 

They don’t quit their jobs, they don’t take out massive loans and they don’t bet the farm. Instead, they live below their means, put some money into savings every month, and work on their businesses on the side. 

Then, once they reach the point where the income from their businesses can cover their living expenses, they switch to working on their companies full-time. Typically, they build up a substantial emergency fund before taking the leap. 

Sometimes, they even do freelancing here and there or get gig economy jobs like delivering food just to have a source of income that will remain unaffected should the business revenue dry up for some reason!

Be Prepared for the Worst Case Scenario

We recommend taking an approach similar to what we just described because it will enable you to limit your losses.

Remember that in the United States, approximately 1 in 5 small businesses fail within a year. You need to be prepared for that possibility because delusional optimism can get you in serious trouble.

If you keep your job and start a side hustle that requires minimal upfront investment and has low maintenance expenses, the main risk is the opportunity costs related to the time that you put into it.

For example, if you work on your business in the evenings and during the weekends for an entire year, that’s a lot of time that you could have otherwise spent with your family and friends, pursuing hobbies or investing in your career.

Consequently, if your company fails despite your efforts, you might feel that you missed out on all that for nothing. That can be depressing.

However, it’s still a much better outcome than making a big gamble, losing everything, and then having to somehow rebuild your life from the ruins while also potentially dealing with serious mental health problems which are a common side effect of catastrophic business failures. 

Keep in mind that if you are prudent about risk management and make sure to limit your losses, you can continue building businesses indefinitely until hopefully one of them takes off. 

After all, just because your first attempt at it didn’t work out, it doesn’t mean that you need to give up on your dreams. Successful entrepreneurs often have entire graveyards of failed businesses behind them!

Step #3: Use What You Have

We have noticed that first-time entrepreneurs have a tendency to worry about what they lack: time, money, skills, whatever it may be. 

However, as our friend Alex Hormozi loves to say, the first rule of entrepreneurship is “use what you have”.

So examine the resources at your disposal:

1. How much time can you allocate to working on your business?
2. How much money can you spend on growing your business?
3. What domain knowledge, skills, and connections can you leverage?

You want to figure out how to make the most out of what you have instead of attempting to copy people who are in completely different circumstances than you.

Remember, regardless of what situation you are in, you can find ways to leverage it as long as you are resourceful!

Step #4: Choose a Business Model

First-time entrepreneurs also tend to put too much emphasis on coming up with innovative business ideas. 

We recommend being pragmatic about it instead: look at the business models that have low startup and maintenance costs, figure out which of these models is best-suited for leveraging the resources that you have, and then just go with it. 

Here are some of the business models that you might want to consider:

• Services – Low startup costs and immediate cash flow but it can be difficult to scale. Suitable for pretty much anyone.
• Coaching and consulting – Low startup costs and immediate cash flow. Best suited for those who have social proof that demonstrates that they know what they are talking about.
• Info products – Low startup costs and easy to scale. Best suited for people who have domain expertise that they can package into an eBook or an online course.
• SaaS – Low startup costs but can take ages to get off the ground. Best suited for software engineers and web developers. That being said, if you are willing to teach yourself how to code, you can make it work even if you don’t have a technical background. Check out Pieter Levels’ book “Make” if you want to learn more.
• Ecommerce – Low startup costs if you go the dropshipping route but the industry is extremely competitive and the learning curve is steep. Best suited for people who have a high-stress tolerance because it can be a crazy emotional rollercoaster!

Keep in mind that choosing a business model isn’t an irreversible decision. Simply pick something from the list above and start selling. If you realize that you don’t like it, you can always move on to something else!

Step #5: Decide on Your Target Audience

You want to go after a demographic that:

1. Has a problem that you can solve with your products and services
2. Can afford to pay for your products and services
3. Is willing to pay for your products and services

Know that your target audience is going to be one of the most important determining factors when it comes to how much money you will be able to make. 

For example, let’s say that you want to become a personal trainer and build a business around helping people lose weight. 

Both broke college students and affluent professionals could probably use your help. However, you will make way more money if you target the latter demographic!

Step #6: Pick One Core Product or Service to Sell

We recommend starting with just one core product or service to sell because that will simplify things a lot. 

Write down all the problems that your dream customers are struggling with and think about which one of them is the most painful. 

Then sell something that can help them solve that problem!

Step #7: Create an Irresistible Offer

Now that you have a product or service to sell, you need to package it into an irresistible offer.

Here’s a formula that can help you with that:

High Value + Low Price + Low Risk = Irresistible Offer

Let’s take a look at each of these three variables:

• High value – You can make your offer more valuable by throwing in various extras that don’t cost much to you but significantly increase its perceived value.
• Low price – This is about the price relative to the perceived value. If you want to increase the former, you need to first increase the latter.
• Low risk – Remove all financial risk from the buying decision process by offering a money-back guarantee. It can either be an unconditional one for 30 days after the purchase or a results-based one where if you fail to deliver specific results within a specific timeframe, the customer will get a refund.

Here’s a real story that illustrates the power of creating an irresistible offer:

Our co-founder Russell Brunson has sold all kinds of stuff throughout his entrepreneurial journey, from potato guns to supplements. 

At one point, he was selling supplements for $67 per bottle while his competitors were selling the exact same supplements for $19.95 per bottle. Pretty crazy, right?

Needless to say, Russell was making way more money than them. But what allowed him to charge so much?

Well, instead of merely selling a product, he was selling an offer. 

You see, he bundled that supplement bottle with a weight loss guide, a calorie tracker, and some other extras that didn’t cost much to produce but drastically increased the perceived value!

Step #8: Create an Upsell and a Cross Sell

Adding an upsell and a cross sell to your core offer can be a great way to increase your customer lifetime value.

This will enable you to spend more on customer acquisition and grow your business faster!

What is an Upsell?

An upsell is an offer that you present to the potential customer once they have accepted your core offer. It’s supposed to be an upgrade on it. 

McDonald’s “Would you like to supersize that?” is a classic example of an upsell. 

You can upsell:

• A larger quantity of the same product
• A higher-quality version of the same product or service
• A monthly subscription for that product or service

..etc.

What’s important here is making sure that your upsell is a better deal than your core offer so that the potential customer would feel inclined to upgrade.

What is a Cross Sell?

A cross sell is also an offer that you present to the potential customer once they have accepted your core offer but it’s supposed to be complementary to it as opposed to being an upgrade on it.

McDonald’s “Would you like fries with that?” is a classic example of a cross sell.

You can cross sell:

• Physical products
• Digital products
• Related services
• Coaching
• Consulting

What’s important here is making sure that your core offer and your cross sell are a great combination, just like burgers and fries!

Step #9: Build a Sales Funnel for Your Offer

What is a Sales Funnel?

A sales funnel is a system for converting visitors into leads, leads into customers, and customers into repeat customers.

Building a sales funnel for your core offer and driving traffic to it is the best way to grow your business!

What is a Lead Magnet?

A lead magnet is a freebie that you offer to the potential customer in exchange for their email address. 

It serves three purposes:

1. Helps you get the attention of your dream customers because everyone loves free stuff.
2. Makes it easier to convert them into leads because you are offering them something that they want instead of just asking them to subscribe to your email list.
3. Gives you an opportunity to prove yourself by providing free value before you pitch them your core offer.

If you want to learn how to create an effective lead magnet, we recommend watching this video by our friend Alex Hormozi:

How to Build a Squeeze Page Funnel

We recommend starting with a squeeze page funnel that looks like this:

1. A squeeze page where you explain what your free offer is all about and ask the potential customer for their email address in exchange for your lead magnet.
2. A thank you page where you thank the potential customer, provide instructions on how to access your lead magnet, and explain what they should expect next.
3. A sales page for your core offer where you pitch them your main product or service.
4. An upsell page where you pitch them your upsell.
5. A cross sell page where you pitch them your cross sell.

It’s super easy to build with our software because ClickFunnels includes a proven squeeze page funnel template. 

You can customize it with our drag-and-drop editor and then add a sales page, an upsell page, and a cross sell page to it. We have templates for all those pages as well!

How to Convert Leads Into Paying Customers With Email Marketing

We recommend setting up this welcome sequence and automatically sending it to every new email subscriber:

Send one email per day so that the entire sequence would take six days to complete. It’s super easy to set it all up with our email marketing functionality.

Step #10: Start Driving Traffic to Your Sales Funnel!

Here are three marketing strategies that you can use to do that:

Social Media Marketing

Create a social media profile on your favorite platform, put a link to your squeeze page in your bio, and start publishing one high-quality post per day.

Make sure to always encourage discussion in the comment section and reply to every comment that you get.

Network with popular influencers and fellow up-and-comers in your niche by leaving thoughtful comments under their posts and regularly sharing their content with your audience. 

If you want to learn more about social media marketing, we recommend watching this video:

Video Marketing

Start a YouTube channel and add a link to your squeeze page to your homepage, your channel description, and your video descriptions. 

Upload one high-quality video per week. Focus on the content instead of production value. End each video by encouraging the viewer to check out the free offer in the description. 

Use OpusClip to cut up your regular videos into shorts and then publish those shorts both on YouTube and on TikTok. Also, share them on your social media. 

If you want to learn more about building a YouTube channel, we recommend watching this video:

Paid Advertising

Wait until a Udemy sale, buy a reputable Facebook ads course, and go through it to learn the basics.

Then, create an ad campaign designed to promote your free offer, start running it with a small daily budget, and use A/B testing to optimize it for conversions. Make sure that your campaign is profitable before scaling it. 

Once you get the hang of running ads on Facebook, you can begin expanding to other platforms by repeating the same process. 

Consider experimenting with Instagram, Twitter, YouTube, TikTok, and Google Search ads. You never know what will work best for your business!

Which Marketing Strategy Should You Use?

It depends on your budget.

If you can afford to run ads then it makes sense to use all three marketing strategies we just discussed.

This approach will help you get your business off the ground faster because paid advertising enables you to get immediate traffic. 

However, if you can’t afford to run ads then you will be limited to social media marketing and video marketing. 

This approach is going to be slower because it takes time to build an audience. But you can make it work if you commit to consistently publishing high-quality content!

Want to Learn How to Build Sales Funnels That CONVERT?

Our co-founder Russell Brunson used sales funnels to take ClickFunnels from zero to $100M+ in annual revenue in less than a decade.

He is now widely considered to be one of the top sales funnel experts in the world. Want to learn from him?

His best-selling book “DotCom Secrets” is the best place to start because it covers everything you need to know in order to build sales funnels that convert. 

This book is available on Amazon where it has over 2,500 global ratings and a 4.7-star overall rating. 

But you can also get it directly from us for free… 

All we ask is that you pay for shipping!

So what are you waiting for? 🧐

Get “DotCom Secrets” for FREE!