The 10 Things I Learned From Starting My First Business
I was sick to my stomach. I had just clicked submit on a payment for a purchase order of product that was bigger than I had ever placed before. The payment was more expensive than a new car. As I sat on my couch and contemplated what I had just done I imagined all the things I could have purchased with that money. The trips I could have taken with my wife, the down payments I could have made on a house, and of course the car I could have bought. This sick feeling quickly went away, however, because I had just made the best decision of my life. I had invested in myself and in my future.
A few years prior to this experience I was sifting through boxes full of returned items that I purchased off of liquidation.com. I used to bid every day on boxes of electronics that were in an unknown condition. These electronics were liquidated items from places like Walmart and Amazon.com. Winning an auction was tough, and getting a box full of undamaged items was even tougher. On the first few auctions that I won, I was able to flip the items for a profit of $200-$300. I thought I had made it big. I was so happy. With the boxes that followed, I was not so lucky. Many of the items came damaged and were not even close to being reparable. The time it took to build listings and ship the products was becoming tedious. I wanted a change. That’s when my roommate Bryant and I were attracted to the Amazon FBA model.
It was 2015 and Amazon was absolutely killing it. The FBA model was already changing lives and making people rich. We wanted a piece of that wealth. Bryant and I decided to go into business together and all we needed was a product to sell. Most people think you need to reinvent the wheel in order to start a business, but that is simply not true. What is often much easier to do is find a product that is already selling well and then improve upon it to make your product superior. That is exactly what we did. After weeks of looking through products and analyzing specific metrics we landed upon our perfect first product, adhesive tape for diabetics.
I had no idea that diabetics used tape to help keep their glucose monitors adhered to their skin. My own brother is a Type 1 diabetic and I had never seen him use anything like it. We began to run the numbers and consult with my brother on the possibility of launching a product that was similar, yet superior to existing products on the market. We read all the negative reviews online of the existing products in the category and decided that we could make a patch that was much better. This was the moment that Skin Grip was born. (to see more check out www.theskingrip.com)
Fast forward two years and things have come a long way. What once solely an Amazon based business has now turned into a multi channel brand that is recognized among CGM using diabetics. What once was a catalog of one single product will soon be a catalog of 5 products each with 4 product variations. Bryant now lives in Arizona and upon him moving he agreed to allow me to purchase his shares so that I could become the sole owner.
This whole process has taught me so much about business and about myself. I am not rich from starting this business. I haven’t even left my day job to work on my side hustle full time. With that in mind I am writing this to share with you the ten things that I have learned by starting my first business. I wish I had known these things before I started. In the years to come I am sure that I will learn even more. Hopefully one day diabetes will be cured. If it is, this business will end up failing, but that is ok. I am fully committed to learning all that I can to improve myself and prepare for future opportunities. My goal is to one day be able to work for myself and own other businesses I have dreamed of starting.
Here are the top ten things I have learned so far:
If you sell to everyone, you sell to no one. I’ve learned this the hard way multiple times. The world is so big it is easy to get caught up in thinking that you can target anyone who breathes to buy your product. The truth is, not everyone is going to buy and if you don’t get specific about who you are targeting, your message will never resonate with anyone.
The first step is dialing in on the problem you are trying to solve. If your business doesn’t solve a problem it will be hard to find much success. From there you must niche down to figure out exactly who you are targeting. Talk to those people. Then create your product, brand, and marketing based around their needs and desires. It doesn’t work as well in reverse.
With Skin Grip, we started off by focusing on people with diabetes. That was too broad so we focused on people specifically with Type 1 diabetes who use glucose monitors. To get even more specific we defined our customers as Type 1 diabetics using glucose monitors that are active and looking to improve their lives through fitness and outdoor activity. By getting specific, our audience gets much smaller, however, now we can tailor our messages directly to these people and relate with them on a very personal level. As your business grows you can begin to expand your reach, but in the beginning you need to be very specific.
Before you start spending money on all the software and rental space and cars and things you want, think again. Expenses are what kills a small business.
When you begin, focus on the activities that bring you money. These are activities that will help you grow faster. Cash flow is key. If you don’t have cash, you’re out of business.
It is easy early on to start pulling money from the business to buy a new fancy laptop, some nice office equipment, or other things you think you absolutely need. These things often do not contribute to your bottom line, they take away from it. This is the quickest way to sink your business. I personally began buying way too many software solutions that I thought I needed to grow but in fact were just weighing me down. I purchased expensive inventory software when I could have easily tracked inventory from an excel spreadsheet. Choices like these increased my expenses and took away a lot of my cash flow for other more important activities. Now I am not saying that you should not invest in tools for your business. What I am saying is that you must look at something and ask yourself “will this help me grow my business right now?” If the answer is yes, spend the money. If not, hold off until a later time.
It is easy to think that the new laptop or office space is a needed expense but the longer you can hold out on being fancy, the better off your business will be in the long run.
To partner or not to partner. This is a very tough question. I worked on many projects with partners over the years and most of the time I felt like I could have done more on my own. Having a partner at times has limited me because it means that you need permission from another individual before you implement something. Sometimes you just get greedy too and want to own everything for yourself. I told myself that I would never want a partner, but as I have gained more experience I ultimately decided that I never want to start another business without a partner and I will tell you why. Remember that having a partner is not right for everyone. You must decide what is best for you and your circumstances.
If you love working on your own and are motivated, I would recommend not partnering with someone. Working on your own can be rewarding. You can know that your work is your own and that no one else can have a say in it. Working by yourself does not mean that you will not seek advice or the help of others, it just means that you are accountable for all business decisions and showing up day in and day out. It can be lonely, but if you remain consistent and put in the work you will receive all the glory.
Here is why I prefer working with partner. I am a very social person. I live for social interaction and good conversation. Because of my ego I often told myself that I did not ever want to work with a partner. I wanted all the money and glory for myself. What I found out was that as I began to work alone I felt lonely. All of a sudden all the pressure to succeed was on me. Whenever I got stuck there wasn’t anybody that I could bounce ideas off of that understood the business quite like I did. This was very tough for me. My mental health started to decline rapidly and burn out was imminent. I decided that I prefer working with someone, even if that means I own a smaller share of the pie.
Now be careful about this. You should not just partner with someone because you want to have a friend nearby who you can gossip or goof off with. If you decide to partner with someone you need to be very picky about who you choose. People usually think that their best friend would be a good partner and sometimes the business ends up ruining the relationship altogether. Here are my tips on choosing the right partner:
I wish that before I started my online business that I would have read DotCom Secrets by Russell Brunson. My business was started without any prior knowledge of sales funnels. I am still learning about them and trying my best to implement them into my business. At the time of writing this I am working on completing my first sales funnel, fingers crossed. What I didn’t realize is that attracting customers and bringing traffic to my website is no easy task. I started running Facebook ads and Google ads to get eye balls onto my shopify store, but I was doing it all wrong. I was not building my email lists or using them in a way that would be effective. I was trying to target anyone that had diabetes rather than focusing on my dream customers. My website is also still a work in progress as I try to make it a place where more traffic will convert.
The old adage “build it and they will come” will never work for most businesses. You must define a clear sales funnel to attract your dream customers who will resonate with your message. Once you have done this you need to make them customers for life. Retaining customers is so much easier than finding new ones and this can be done through a good sales funnel.
There will always be unique opportunities in the market to make money. Believe me, I have a list on my phone of 100 ideas that I see as opportunities.
When times get tough and finances are grim, you need more than your desire of money to keep you afloat. It is during the tough times that your passion and vision will help get you through. If you are not passionate about what you are doing you will eventually burn out and quit. Just remember that if you are not passionate for what you are doing, you will lose to someone who is passionate for that product or industry. The passionate individual will outlast you as they will remain motivated to see their dreams and visions through to the end.
Now not everyone with a passion for underwater basket weaving will make a fortune, and that’s ok. If you aren’t even in it to make money then you have nothing to worry about. If you do want to make money than you may need to look at where your passions align with profitable opportunities in the market and choose something other than underwater basket weaving.
In the end making money is not evil if you pursue it and use it for the right reasons. Just be sure that it is not your foundation for why you wake up in the morning. There is much more to life than money.
Initially I got way too caught up in doing everything in my business all the time. Every day I was clearing through my inbox, responding to reviews, managing inventory, posting on social media, etc. This caused serious burnout very quickly. I was overwhelmed and stressed every day and it began to show in my relationship with my friends and family.
One little trick changed everything for me. The trick was to make a theme for each day. What I mean by this is to do certain tasks 1 day a week and hyper focus on them in the time you allot for them. There is an theory called Parkinson’s law that changed my perspective on efficiency. I did not make this law but it is very fitting given that my last name is Parkinson. Parkinson’s law says that work expands to fill the time available for its completion. If you give yourself 1 hour a week to respond to reviews then you will complete it in that 1 hour otherwise it will have to wait until the next week. If you give yourself all day to respond to reviews, then it will literally take you all day. Don’t allot more time than you need to get things done.
Let me paint a better picture of this technique for you. My personal theme for Monday is to work on my to do list and running errands. If I need to go buy stamps, or boxes, or anything for my business I do this on Monday. Tuesday is my Amazon day. This is the day that I focus on taking care of reviews, feedback, inventory forecasting and all things related to my account health. Wednesday is specifically set aside for advertising. See what I mean? Each day has its own theme and allows me to focus without having my mind jump from one task to another and destroying my creativity and efficiency.
Entrepreneurship can be very lonely. Each week is a roller coaster of emotions. Some days you are on top of the world and some days you are at the depths of the despair. Staying level headed is often one of the hardest challenges.
When I first began to work from home I would wake up and start working in my bed. Because I had so much to do I would work while eating breakfast, work while eating lunch, and work almost any time of the day. I rarely spoke to another human and some days I didn’t even see the sun. This was a huge mistake. I wasn’t working out and I wasn’t interacting with anyone other than my roommates. After a few months of this I became depressed. I had completely forgotten about taking care of myself. To be very honest, it was a an extremely difficult time for me in my life. After everything is said and done you are your own greatest asset. If you aren’t good, nothing else you do will be quite as good as it could be.
I quickly began to change my routines and form new habits. I woke up early, meditated, read books, went to the gym, improved my diet, and found ways to get out of the house on a regular basis. I immediately saw a change in my mood and my work improved. I eventually decided to go work in a co-working space so that I could better separate home and work. Just remember, do what is best for you and never sacrifice your personal health.
What I have come to find out is that as I have put myself out there and let friends and family know my goals, many of them are willing to provide connections and tools to help me succeed. By getting out of my comfort zone and talking about what I am working on so many opportunities have been gifted to me.
Just a few months ago I was at a family reunion for my wife’s extended family. While there I talked to relatives who had diabetes and how my products could help them. They immediately began providing me with contacts of diabetic coaches that I could reach out to in order to expand my reach and grow my business.
This is just one example. I’ve had so many friends provide priceless value that has transformed my business. By getting out of my comfort zone and making connections I have been very fortunate to receive so much help.
Skin Grip was fully funded out of my own pocket. I made the initial investment for products and advertising. As time went on I needed to make bigger orders to keep up with demand and continue to grow my product offering. The problem was that most of my money was tied up in inventory that hadn’t sold yet and I did not have much cash flow. I didn’t recognize all the types of funding that I had available for my business. When I began to talk to other business professionals I learned that there were many funding options available to me and that I just needed to decide what was best for my business. Some popular options are funding from friends and family, investors, loans, and grants. One great option I came across was the Utah Micro-enterprise Loan Fund. Through this fund you apply and then present your business to a board of advisers. If you are approved you can often be funded anywhere from $1,000 to $50,000 (or even more).
I will not get into the details of each type of funding in this article as that could be very lengthy. Just know that there are many options out there and you don’t have to spend all of your own money to grow your business.
After discovering my cash flow problem I found a solution that met my specific business needs. Luckily, I found a really great loan option through Celtic Bank here in Salt Lake City. This helped me out so much and gave me the cash flow I needed. Because I did not want to give up any equity I decided to take out loans rather than take on any investor money. This was a hard decision and one that I may rethink in the future, but at the moment it was the best decision for me personally.
Last but not least, if you don’t ever start you’ll always live with regret. As one of my favorite entrepreneurs Richie Norton has stated, “people think that they need more money, more experience, and more education before they can start working on their dream idea… only to find out that they still need more money, more experience, and more education.”
Being a perfectionist myself, I am often scared to start working on my crazy ideas because I am worried that I am not experienced enough or that I won’t be good enough to succeed. I have had to work on this and continue to work on changing my perspective and overcoming my insecurities. They truth is, we will never be 100% ready to start a business. We will always lack some education and will probably also lack the money and experience we think we need to start. You want to know the crazy thing though? These things come as we begin to just work and do. One of the best ways to learn something is to throw yourself right into the action. You don’t get good at basketball by watching from the bleachers. You go out and play! Yes, you will have moments when you fail or make yourself look like an idiot but these are all learning experiences. You have only failed if you didn’t learn from your mistakes and move forward. To me failure is not trying at all. Everything else is just a first attempt in learning.
If you have always wanted to start a side hustle, stop thinking about it and just go for it. I promise that you will not regret the journey. You will definitely have some bad days, but I can promise you that you will also have some amazing days as well. You may not make a million dollars from it, but that’s ok. It may just teach you what you need for your next big idea, I don’t know. I personally am just enjoying the journey and hoping to live life without regret.
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The 10 Things I Learned From Starting My First Business
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