Best Advice From RMMFI Co-founder Who’s Helped Launch 135 Businesses
There are few people who know as much about launching small businesses as Brendan Landry. He and his colleagues at Rocky Mountain MicroFinance Institute have helped start 135 of them (and counting) through their Business Launch Boot Camp program and the microloans they offer their graduates.
Brendan, pictured in the gray jacket above, is responsible for the design and implementation of RMMFI’s Business Launch Boot Camp, a 12-week, intensive program that provides business plan support, mentorship and loans of up to $2,500 for entrepreneurs looking to launch or re-launch a business concept. (He and his three RMMFI co-founders also have a pretty impressive entrepreneurial story of their own.)
RMMFI works with many entrepreneurs who face persistent barriers (in business and in life) and often don’t have access to traditional lines of credit. With that in mind, the RMMFI team puts a lot of emphasis on helping owners think through the personal and financial implications of launching a business. We asked Brendan to sit down with us and share the top things he encourages entrepreneurs to consider before they decide to go all in.
1) THE ‘CAUSE YOUR MAMA SAID SO RULE
As Brendan puts it, just because your mama says your product or service is good, doesn’t mean you should necessarily launch a business around it.
“I played Little League, I was terrible, and I quit after a year,” Brendan said, “But if you ask my mom, she’ll tell you I was the best second baseman in the world! Your mom might think you make the best cornbread, or the best hot sauce or do the best massage therapy, but are you good enough to charge people money?”
To find out, Brendan suggests testing your product on people “you don’t have blood ties to who aren’t afraid to make you cry.” It’s even better if the test clients are “one to two rings beyond your social network.”
(One way to do this, of course, is to seek out a local organization that offers education and support to small businesses and startups, like RMMFI!)
2) HIDE IN THE BUSHES
Assuming your ideas passes the first test and people who aren’t related to you show an interest in what you’re selling, the next question Brendan asks is “Who else does this?” (In other words, who are your competitors?)
Often entrepreneurs tell him, “Nobody’s doing what I’m doing.” But if that’s really true, he counters, “Maybe you should consider doing something else.”
If you can’t find any similar businesses, it might be an indication that there’s not really a market for what you’re trying to offer. If there were — chances are — someone somewhere would already be doing it. (It’s a point one of RMMFI’s founding board members made to Brendan when they were developing the Boot Camp curriculum together and something he’s held in esteem ever since.)
If you can find one or two competing businesses, Brendan jokes you should go “hide in their bushes.” At least metaphorically. Check out their websites and storefronts. Read customer reviews. Make an inquiry about their pricing or even buy one of their products for comparison. This will help you figure out what they’re doing well and – equally important – what they’re not. Maybe they don’t serve certain areas of town or don’t offer particular services, leaving a great opportunity for your new biz to differentiate itself.
3) THE WHOLE PAYCHECK PRINCIPLE
Most of the aspiring business owners RMMFI works with start out as solopreneurs. As Brendan puts it, “You are the business, and the business is you.”
You still have personal financial obligations, and your fledgling business probably isn’t going to cover them all right away. So Brendan suggests owners think of themselves as fishermen with several fishing poles in the water at once.
Each of those lines represents a source of funds – maybe income from another job, savings, public assistance, support from family or a formal loan – and together, they make up your whole paycheck. That combined amount needs to be enough (or better yet, more than enough) to cover your personal expenses and obligations while you get your biz off the ground. Then – at some point — your business income will (hopefully!) become another one of those fishing lines.
THINK YOU’RE READY TO LAUNCH? TRY A PARALLEL PATH
Most of the entrepreneurs who come to RMMFI are eager to launch their businesses as fast as possible so they can quit their current jobs. But, with the Whole Paycheck Principle in mind, Brendan says it’s usually more realistic to keep working, at least to some degree, while you get your business off the ground.
“Try rethinking that job and seeing it as a tool that can help you grow your business,” Brendan said. “Are there skills you can pick up or connections you can make there that will help with your ultimate goal?”
He added – even when your business is launched – you may not land your dream clients right away. For example, an aspiring landscape designer might have to establish herself first with leaf-raking and weed-pulling jobs that bring in revenue. And a baker who dreams of opening a brick-and-mortar patisserie might first have to try selling his goods wholesale to pay the bills.
“But the priority should always be drumming up the business you really want,” Brendan said. “Don’t allow yourself to get trapped in the cycle of the early and easy revenue wins that don’t actually fit the profile of what you do or who you do it for. Leverage the revenue opportunity but keep an eye on the ultimate prize. Otherwise, you’ll get demotivated by the grunt work that starts to feel like a job.”
NOT NOW DOESN’T MEAN NOT EVER
So, maybe you’ve read through Brendan’s questions, done a lot of thinking, and decided you might not be ready to start a business. Now what?
“If you take the time to understand that it would be nice to make a business fit into your life right now, but you don’t see a way to make it fit, then you’ve done yourself a lot of favors,” Brendan said.
He added, “Not now,” doesn’t mean “Never.” Brendan’s seen entrepreneurs put their ideas on hold and come back to them after a personal situation changes – like after a child starts school or a medical condition improves. Other times, owners have decided to complete certification courses in the fields they’re interested in and then come back to launch their biz.
AND IF THIS ALL SOUNDS AWESOME, AND YOU’RE LUCKY ENOUGH TO BE IN DENVER?
You could be part of the next RMMFI class of Boot Campers. Learn more about their introductory course, Exploring Business Ownership, to get started. Or come hear the business pitches from the current Boot Camp, and see what it’s all about. (RMMFI announces all its upcoming events on Facebook and Twitter.) Also, check out the RMMFI business directory and become a customer of one of the entrepreneurs who launched their dreams with the organization’s help.
RELATED: Before RMMFI could launch a single business, they had to fight for their own existence. Read how four employees of a failed microlender salvaged the model and built Denver’s Small Nonprofit of the Year.