I’ve had a number of businesses. Some were a waste of time, some moderately successful (35 k/year), some quite successful ($400/day and up), and a few spectacular ($1000/day and up). I’ve been involved in electronics manufacturing, software creation, porn website development, bootleg DVDs, the health industry, and several other ventures.
The first step in any business is to identify a general market. For me that usually happens when I personally need something. I look around for solutions to my personal problem, and discover that either the problem is not adequately addressed by the market or that there is a high markup for the products sold in it.
Another way to discover opportunities is to look at what is selling on ebay. Often it’s not difficult to spin off a similar product. Those businesses are often flash in the pan, but for some personalities the change is part of the fun.
After identifying a demand, the next step is to research your product. Ideally you’ll want to do the manufacturing yourself. If you can import the product, that can work but it means that there is already some manufacturing and a degree of market saturation. Spend a few months in research and hire experts the field to design, program, or engineer your product. Grad students and even professors can be hired for cheap engineering – just walk around the campus and inquire. A new trend in designing is crowd-sourcing, where an online community of experts is approached with the project and people collaborate to finish the design stage in return for product, shares, or money. Manufacture in house if you can – keep your trade secrets close.
Outsource the design of your packaging and then get your packaging labels, boxes and inserts printed.
For creating a website, choose some open source ecommerce software. I recommend Zencart. Make the basic site yourself, and then hire a designer to clean up your work and spruce up your logo and graphics. Write your ad copy yourself. To do this, copy and paste all the ad copy from similar sites, paste it into your page, then re-arrange the best parts of that, and then re-write what you have left over.
The next step is marketing. Adwords, seo, renting banner ad space, and commenting on blogs and forums will go a long way. Try to create a word that can get famous so that when people search for that word they will find your website. For instance if you are selling a new type of butane powered laptop battery, pick a name for it, like “butebat”. That makes your SEO work easier as ranking for butebat will take about 5 minutes. For some products you can hire a call center to do cold calls to a targeted list, and some products work well with offline ads.
For order shipping, use a fulfillment service.
For customer service, use auto-reply emails with a FAQ. Outsource what customer service you can, but for purposes of keeping your proprietary secrets, don’t let too many people know what you do. So you may need to handle some customer service yourself. Limit your time spent on customer service, even if it means losing sales. Email is a killer time suck. But use your customer service queries to tighten up your ad copy and auto-reply.
It’s possible, though very difficult, to have all of your income anonymous. I won’t tell you how.
Automate everything you can. To do that simply identify the problem, break the solution down into manageable parts, and then hire people to write the code for your automation. Hire a freelancer on elance or getafreelancer or odesk or similar. If you can only come up with a vague notion of what you want automated, some programmers will still be able to come up with solutions, however I’ve found they work best if you give them very detailed tasks.
Learn to focus on the businesses that are doing best. I know it’s appealing to diversify your revenue stream, but it’s usually the case that focusing will yield a higher return on time invested. It is for this reason that it’s not a good idea to get involved in businesses with only moderate income potential; they will keep you from doing proper work on better projects. If you think a new project will take little time, even to outsource, multiply that time by 5 and then divide the available time you think you have by 5.
It’s not a bad idea to test the waters for other ideas while you develop your main one, but generally it’s better to pass by opportunities and excel at one solid business. Entrepreneurs often are the worst at gauging the limits of their time, and can stretch themselves too thin. Being eager and optimistic are not character traits you want to develop. Limit your enthusiasm and be steady.
Don’t tell even your best friends your business. And certainly never, never tell your girlfriends. No matter how close you are, one day she’ll suggest to her new beau that he duplicate your efforts.
If you find that very rare employee who is a creative problem solver, pay them above standard wages and do your best to keep them. Consider bonuses and even profit sharing. Good employees come rarely. Treat them as family and consider them as lifetime allies.
And finally, the number one most important part of developing a business is being able to pay your expenses while it is still in the development stage. Therefore your number one business skill will be none of the above. It will be living cheaply. This is easiest in developing countries.