With technology today, it’s much faster, easier and cheaper to build a small business. In “The $100 Startup”, Chris Guillebeau presents a blueprint to help you start your own micro-business – one that can coexist with whatever you’re currently doing, and/or eventually replace your traditional job. In this summary, we’ll explain how you can do something meaningful that you love, make money while doing it, and define your own future and freedom.
The Microbusiness Revolution
Micro businesses are typically small businesses run by one person. Although they have been around for a long time, technology has made it possible to test, launch and scale your business quickly and cheaply. Guillebeau identified 1,500 individuals who had successfully built businesses with $50,000 annual net income, mostly with start-up capital of $100 or less (and no more than $1,000). From this group, he focused on the 50 most interesting case studies. Most of them can be operated by ordinary people with no special skills. Here are some interesting findings from the case studies.
The Point Of Convergence
From the case studies, Guillebeau identified 3 key foundations behind the success stories, which he calls the Point of Convergence – directing your passion towards something that helps people, and leveraging on related skills or strengths that you may have. Read more about these 3 components in our complete book summary or the book.
Your freedom hinges on how far you help or add value to others; at the core, most human needs are emotional (e.g. our need for love and affirmation). For example, people at a horse ranch are not just buying horse rides; they are buying a sense of escapism and happiness. Many restaurants don’t just offer food and drinks; they offer a place to relax after a hard day’s work. In the book, Guillebeau elaborates on how to articulate the emotional benefits that you bring including: Why you should give them the fish (rather than teach them to fish), how to spot money-making opportunities, and how to identify real needs and wants. [You can also get more details from our full summary here.]
The New Demographics
It’s important to know who our customers are, and how to find them. However, instead of traditional demographics like age, gender, race, income, location, it may now make more sense to look at shared interests, values, beliefs, passions, skills. The book explains how to develop new customer groups, and how to evaluate your possible projects and options (more details in the book and summary).
The Step-by-Step Guide to Launching Your Business
The $100 Startup Model is about taking action. There are many free resources on the official website, www.100startup.com. The book integrates everything into an easy-to-follow step by step guide. Check out our summary for simple walk-through, with key download links so you can start putting the ideas to practice right away. In this article, we’ll outline some of the key highlights:
The One-Page Business Plan
Many people spend all their time making a plan that doesn’t convert to action. It’s much better to quickly outline a 1-page business plan. Focus on taking action and “plan as you go”.
Select a marketable idea
You don’t need a huge idea; you just need something useful enough that people will pay for. That’s why you should start asap – avoid spending too much resources until you’ve tested that people want what you have to offer. Use the 7 Steps to Instant Market Testing guide (download here).
Marketing before manufacturing
Test that there’s sufficient demand for your product/service, before you spend all your time and effort figuring how to make it. And, keep costs low by investing your own time and effort initially (rather than sinking in your savings or borrowed money). False starts are common, and you’d want to minimize the impact of potential failure.
Get your first sale asap
At the start, your challenge is inertia (not competition). Your first sale provides a huge motivator and morale booster to keep you going.
Regroup after initial success
Take stock of what needs to be done next, e.g. sub-contract less important tasks to free yourself for more vital ones. Figure out if/ how you can duplicate your initial success.
Develop a short Mission Statement
Explain your business with a short Mission Statement of 140 characters or less, using this simple formula:
We provide (product or service) for (customers).
We help (customers) to do/achieve/other verb (primary benefit).
Consider incorporating a community project or social cause into your business. When you receive freely and give freely, you’ll find your business to be a lot more fulfilling and rewarding.
Get more details on from the book or our full 14-page summary on how to:
• Create a Killer Offer (with the Right Audience, the Right Promise, and the Right Time) and doing gentle self-promotion through “hustling”
• Launch your Product/Service (using the 39-step product launch checklist, telling your story in parts and building up the suspense before and during the launch.
• Handle money matters. Managing your money to keep costs as low as possible, while making more money and improving profitability.
Leverage and Next Steps
It’s generally easier to grow a business than to start one. The book covers the growth and exit strategies to consider for your business. Here’s an overview:
• Improving Profitability through Small Tweaks. It’s generally easier to grow a business than to start one. You can greatly improve business profitability through small changes to traffic, conversion, sales price, and sales to existing customers.
• Grow at your own pace, to your ideal size. You should only grow your business if you want to. Consider the role that your business plays in your life, and decide if you prefer a small “freedom business”, or to go all in and build a full team.
• Franchising yourself. Rather than buy a franchise, you can clone yourself, or self-franchise via the Hub-and-Spoke model, a partnership, or outsourcing.
• Monitoring your business. As your business grows, you’ll need to review different aspects, fix problems and identify small actions you can take for long-term results. The book highlights some of these key areas to look out for.
• Build to sell. The built-to-sell model is fundamentally different from the $100 Startup model – the latter is great for transitioning to a business or new career (based on something you love to do) while the build-to-sell model is about creating an independent entity that you can sell off for a big reward.
Other Details in “The $100 Startup”
This book is about starting a business that can support the life you want. While all the entrepreneurs interviewed come with their share of fears and worries, the biggest obstacles they overcame are those of self-doubt and inertia – this book provides the key steps you need to start taking action.
If the ideas of the $100 Startup resonate with you, do check out the various case studies in the book for added inspiration, as well as the useful links and resources on their official website. The book and website also include:
• Survey data, interviews and methodology;
• Summary of 25 specially-highlight case studies;
• Tips on how to become your own publisher or start your own consultancy business; and
• Numerous templates, checklists, and free resources e.g. the 1-page business plan, 1-page promo plan, 1-page partnership agreement.
Start building a business that supports your life goals!