Self-Made Boss (2022) is a practical starter kit for anyone looking to start a small business. It’s packed with advice and case studies looking at small businesses from across the United States, with step-by-step instructions for turning your great idea into a successful business.
Introduction: Kick-start your journey to self-employment.
Table of Contents
- Introduction: Kick-start your journey to self-employment.
- Get connected with free business resources.
- Outline your vision and articulate your goals by writing a solid business plan.
- Take care of your incorporation paperwork and other licensing requirements from the outset.
- When designing your operational workflows, use observation and standardization to your advantage.
- When building your brand, create a signature experience to generate buzz in your community.
- To stay ahead of unexpected setbacks, observe consumer trends and be flexible in your approach to business.
- Final Summary
- About the author
- Table of Contents
Small businesses do so much more than contribute to the economy. They’re a big part of our social fabric: they give neighborhoods character, and they’re part of the lifeblood that holds communities together.
The United States has a lot of small business owners – approximately 30 million, in fact. If you’re looking to join their number and want to set up a small business of your own, then these summaries are for you. If you’ve already struck out on your own and you’re seeking advice and inspiration from other small business owners, they’re for you, too.
You can find a lot of inspirational business books from Fortune 500 CEOs – but what if you own a neighborhood pizza joint and you’re looking to source the best Buffalo mozzarella? Or you just opened a bookstore and you need to build your social media presence? You need practical business advice that’s tailored to your situation.
The authors call this book a starter kit. That means that in these summaries, we won’t be getting into the weeds with many of the topics that might be relevant at various stages in starting a business, like tax strategy or how exactly you set up a profit-and-loss statement. (When it comes to that sort of thing, the details vary a lot based on industry and location anyway.) Instead, we’ll outline the basics of what it takes to become a self-made boss and point you in the right direction for getting started.
In these summaries, you’ll learn
- what a mom-and-pop ice cream shop has to teach all business owners;
- the two things you can do to weather most business setbacks; and
- how to create buzz for your business by word-of-mouth.
Get connected with free business resources.
No matter where you are in the world, there are probably free small business resources that you’re not using.
If you’re in the United States, then by all means get in contact with your local branch of the Small Business Administration, or SBA. It just might be the federal government’s best-kept secret!
The SBA is a treasure trove of free resources that far too few entrepreneurs utilize. Don’t make that mistake yourself, and definitely don’t pay expensive consultants for information the SBA gives out for free!
The SBA will help you workshop an idea from the ground up, get a loan, and draw up initial contacts, as well as connect you with the right mentors. Its staff members have probably seen all of your problems before and will help you avoid common pitfalls. So if you haven’t already, find the SBA resources in your state.
Even if you’re not in the US, chances are there are nonprofits, free public resources, and networks in your area that will support you. Your first step should be to get in contact with them.
There are people out there who want to help you. Go and find them!
Outline your vision and articulate your goals by writing a solid business plan.
Let’s not sugarcoat it: starting a small business is risky. You have about a fifty-fifty chance of surviving the first five years; in fact, one small business in five will fold within its first year. To prevent this, it’s absolutely critical to think through your venture systematically. And that’s what a business plan is for.
Now, a business plan is crucial if you’re looking for a grant or a loan. As an outward-facing document, it can help you convince people that you’re taking the venture seriously and that you know what you’re doing.
But even if you’re not looking for external funding, it’s a great idea to write a business plan anyway, even if it’s just for yourself. A business plan is your chance to present your vision for what you’re building and outline your plans for achieving your goals. Simply put, it’s the blueprint for your business. And the act of writing a business plan requires you to research your industry and think objectively about what goals you’re aiming to achieve. The thought process behind it will positively influence your entire business and get you started on the right track. So don’t procrastinate on this one – it isn’t just busywork!
So how do you do it? Fortunately, you won’t need to reinvent the wheel every time – it’s a pretty formulaic process, and there are plenty of resources online – for the specifics of how to do it. But here are some tips to get you started:
The beginning of your business plan, the executive summary, is your chance to tell your story vividly and engagingly. In it, briefly run through what the rest of your plan lays out in detail, with particular focus on the problem, solution, and audience. Pro tip: the executive summary will go first in the document, but it might be easier to write it last. But whenever you choose to write it, remember – to convince your readers, the executive summary has to be punchy!
Then, for the rest of the document, get much more concrete and objective. Write like a banker, not a poet; back up your claims with evidence and statistics, and don’t make claims you can’t prove – that you make the best sub sandwiches in town, for example. Be selective with your information and be sure to present yourself and your team in the best possible light.
If you’re aiming your business plan at investors, it’s a good idea to hire an accountant to help you make realistic financial projections and to put everything in the format your audience is expecting. And don’t send gimmicks along with the business plan! Investors will gladly eat the baked goods in your gift basket, but the money you spend on those treats isn’t a smart expenditure – they’re unlikely to sway anyone, and they might just make you look less than serious. Just stick to the facts instead.
What’s important is that you succinctly articulate the problem or need you’re looking to address, and why anyone would pay for your solution. Is your potential business not just feasible, but attractive to potential customers? Answering this question for yourself and for potential investors is at the core of a solid business plan.
Take care of your incorporation paperwork and other licensing requirements from the outset.
Unless you’re opening a law firm, chances are, you’re not starting a business in order to do legal paperwork – that isn’t most people’s idea of fun! But if you want your business to be aboveboard, it can’t be avoided. Given that, you might as well knock it out as quickly as possible so you can focus on running your business. It’ll also help you avoid fines or even your business getting shut down later on down the line.
Fortunately, incorporating your business isn’t as painful as it sounds. To begin, you’ll need to decide on your corporate structure. This will determine the parameters of your business and how it will be taxed. Here, we’ll outline the basics so you can get the lay of the land, but it’s a good idea to do your own web research and follow up with a lawyer to get a full picture of the pros and cons of each. Also note that how you incorporate your business might vary from state to state.
First, there’s the simplest form of incorporation: sole proprietorship. This means that only you own the business, and in most cases you only need to file one form, the DBA, or “Doing Business As” form. A sole proprietorship is a pass-through entity, meaning that corporate profits are only taxed once as part of the owner’s income. They’re super easy to set up, so it might make sense to start here and change your structure later if you need to. The downside to a sole proprietorship, though, is that you’re 100% responsible for any business liabilities or debts incurred.
Next up, you have the LLC, or limited liability corporation. It’s a little more complicated than a sole proprietorship, but it’s likely that you can take care of the paperwork in about two hours. The advantages of an LLC are that as many people as you like can own the business and personal assets are protected. Should your business flop, you won’t stand to lose your retirement fund or your house!
If an LLC is sounding like the right option for you, also look into structuring your business as an S corp, which is similar to an LLC except that it has more formalities. An S corp’s advantage over an LLC is that S corps have been around longer, so certain investors, lawyers, and advisors might prefer to work with you.
Finally, if you’re looking to one day raise capital by selling shares of your business, you’ll need to incorporate as a C corporation. A C corp allows for multiple types of stock shares and unlimited shareholders. There’s a disadvantage to it too, though – unlike the other three structures, which are all pass-through entities, a C corp is taxed twice. Given the increased tax burden, don’t set up a C corp unless you’re sure it’s the right option for you.
You’ll need a lawyer to set up an S corp or a C corp, unlike for a sole proprietorship or LLC. But even for those, you can always hire a lawyer – if you’re worried you’re in over your head, that could mean peace of mind.
Finally, be sure to look into what licenses and insurance you need for your industry. An insurance broker can help you with this.
When designing your operational workflows, use observation and standardization to your advantage.
Now let’s get to why you’re really here: learning how to get up and running!
The real question here is: how do you turn your idea into a finished product in the hands of a customer? Essentially, we’re talking about process management of your operations. Small businesses typically have small margins, so the successful ones pay close attention to every aspect of how the company is run. That means getting really specific with the nitty gritty details of your workflows and optimizing for efficiency.
To nail down your operations, use data to your advantage. Take the time to observe and document your operational processes – everything from sourcing materials to inventory management, distribution, and sales processes. Anything that’s done routinely should be standardized and documented, then systematized. A documented, standardized workflow will be hugely helpful in identifying problems or inefficiencies and will help you test new solutions. Plus, having clear and documented workflows will make it easier to train new employees or sell your business to someone else at a later date.
Want an example? Let’s look at Pesso’s Ices & Ice Cream in Bayside, New York, run by a father and a son. The younger Pesso took a long and close look at all aspects of their business – from ingredients to spoon prices to hiring practices – and made educated guesses about how to improve the business.
When he noticed that the shop barely made any money before two o’clock, he decided to change the opening hours. He also ran a full cost analysis and realized that despite ingredient costs rising dramatically in a few years, his shop hadn’t adjusted the prices of their ice cream. He changed the price and sizing of the scoops, and stopped offering less popular menu items like floats, which took more work than scooping ice cream but generated little revenue. A few customers complained, but most didn’t notice. Some even appreciated it, reporting that fewer choices had reduced their decision fatigue. For Pesso, a simpler menu allowed him to focus on quality and also boosted his margins.
Nowadays, Pesso is a small business consultant. Based on his success with the ice cream shop, he advises other business owners to observe your systems first, from multiple angles, then simplify.
The more data you have on your processes, the more easily you’ll be able to go from reactive to predictive. You’ll be able to adapt to changing customer demands more nimbly, because you’ll be able to observe trends. As Mike Bloomberg once quipped, “In God we trust. Everyone else: bring data.”
When building your brand, create a signature experience to generate buzz in your community.
Here’s a fact that every business owner needs to know: seventy percent of purchasing decisions are made based on how a customer feels during a transaction.
As you’re building your business, it’s critical to ensure that your customers feel understood and valued when interacting with your brand. To keep those customers coming back and make you their small business of choice, you want to form a bond based on trust.
One way to do this is to create a signature experience. Think about Ikea for a second. Any trip to the Swedish furniture giant is iconic – it’s always about getting lost in a maze of charmingly arranged rooms that allow you to easily visualize how that Billy bookcase will mesh with your lifestyle. At the end, there’s always a plate of the store’s famous Swedish meatballs waiting for you. From start to finish, the store has created an iconic experience designed to leave a lasting and positive impression.
You don’t need to be the world’s largest furniture retailer to do the same. In fact, designing an engaging experience for your customers is a great opportunity to put love and creativity into your business.
One good example of a small business with a signature experience is the children’s bookstore Wild Rumpus in Minneapolis. It sells books, of course, but it also has cats and chickens running around at all hours of the day, aquariums in the bathrooms, and whimsical exploration areas. Parents love to bring their kids to a place with a memorable experience, and the store’s neighborhood has more character because of it.
Once you’ve given your brand this kind of unique personality, expand on it and publicize it. To begin with, you can create buzz through word of mouth. Giving away products and services is a good way to boost this initially, and you can solicit feedback from these early customers to improve your product.
Next, be sure to build up your web presence from the get-go. Before they even consider walking through your door and giving you their money, most prospective customers will look you up online to see if your business is legitimate. You need to provide them with all the necessary info – your opening hours, for example – but also be sure to tell your story. Who are you, and why’d you decide to go into business? It’s a great opportunity to connect with your customers on a human level.
The authors also recommend investing in design earlier than you might think; a logo goes a long way in establishing your brand identity! If you can afford it, hiring a graphic designer and a photographer from the start is a great way to establish credibility online.
Leveraging social media is also a must. When you have new inventory, weekly specials, and promotions, use the various platforms to share them. It can take some time to grow a social media presence, but make sure you persist. There’s no one-size-fit-all approach to success on social media, but it’s good to start out with a presence on at least one or two platforms and aim to post three to five times per week.
Finally, don’t discount traditional methods of acquiring publicity. You can always place an ad in a local paper or sponsor a community activity for free press coverage. If you’re about to open or have a special event, send out a press release and see if local media is interested in covering it.
To stay ahead of unexpected setbacks, observe consumer trends and be flexible in your approach to business.
Let’s say your business is official and you’ve been around for several months. Customers are regularly coming through the door, and you feel like you’ve nailed down your operational procedures. Maybe you’re even profitable already.
Unfortunately, this smooth sailing probably won’t last long. You’ll likely confront a business disruption that can come in many different forms, ranging from everyday setbacks like traffic jams and unreliable employees to larger-scale issues like changing consumer behavior or world events like wars and pandemics. But don’t lose heart! There are a couple of ways to prepare yourself to roll with the punches.
The first is to be observant. Keep a close eye on your company’s sales information, and compare it to consumer trends and feedback from customers. Some setbacks, like a hurricane, will sneak up on you. But more often, changes that commonly affect business happen gradually. If you learn to read your market and pay attention to trends, you can adapt your business accordingly.
The second is to be flexible. The ability to pivot might be the most important key to success. Keep asking yourself how you can adapt or improve, and stay committed to evolving your business.
Being observant and flexible will help you find new opportunities in business if your initial approach isn’t working. One way is to create an adjacent product if yours isn’t selling for one reason or another. Let’s say that, pre-pandemic, you found success selling homemade festival fashion on Etsy, an online craft marketplace. Your Coachella-ready crop tops were flying off the shelves in 2019, but by the spring of 2020, when pretty much all festivals worldwide were canceled, business wasn’t exactly booming.
In April 2020, the pandemic was well underway and Etsy executives sent a memo to its sellers, suggesting that they all make masks. It was good advice, and you’d have been wise to take it. In just a few short months, mom-and-pop shops sold $500 million worth of masks – a product for which there had previously been almost no demand.
When you encounter your first roadblock, ask yourself whether it’s time to double down on your vision or to recalibrate your approach. Remember to let the data do the talking, and don’t operate solely on gut feelings. Consider reaching out to an expert in your industry to talk about the challenge you’re facing.
If you have an itch to strike out on your own and start a small business, you’re in great company.
Self-made bosses are daring individuals who see problems in the world and decide to become part of the solution. Some are creatives looking to turn passion into a profession; others are just inspired to give back to their community. No matter what, they’re people with the drive to build something from the ground up.
To turn your spark of inspiration into a successful business, get practical. Get in touch with your local SMB and access their free business resources, then build your business plan, incorporate, and standardize your workflows. Then focus on creating a signature experience that keeps your customers coming back. Finally, stay flexible and observant, and you and your business will be in it for the long haul.
Thanks so much for listening. We hope you’ve found these summaries useful and inspiring. Please let us know what you thought by giving us a rating!
Jackie Reses is the Chief Executive Officer of Luna Financial Group, a fintech building banking-related financial infrastructure for tech and crypto companies and the Chair of the Economic Advisory Council of the Federal Reserve Bank of San Francisco. Previously, she was the Executive Chairman of Square Financial Services, Capital Lead and Head of the People Team at Square Inc. (Block Inc). She has been named one of Forbes “Self Made Women,” Fast Company’s “Most Creative People in Business,” and American Banker‘s “Most Powerful Woman in Finance.” Prior, she had leadership positions at Yahoo! and was a Partner at Apax Partners Worldwide, one of the largest private equity firms in the world. Jackie is also on the board of directors of Endeavor, Affirm and Nubank.
Lauren Weinberg is the Chief Marketing Officer of Square, where she leads global Marketing and Communications for the $100B company that provides business solutions for millions of small business owners all over the world. She has been named on Forbes “CMO Next,” Brand Innovators “Top Women in Marketing,” and Fintech Hub’s “30 Most Influential Fintech Marketers.” Prior, she held leadership roles at Yahoo, MTV, and AOL. She is an AdWeek Executive Mentor and advises early stage startups.
Entrepreneurship, Management, Leadership, Business Development, Business Franchises, Commerce, Customer Relations
Table of Contents
Prologue: A Letter to Our Readers xi
1 Taking the First Step 1
2 Creating a Business Plan 15
3 Legal Matters 31
4 Operations and Logistics How to Get Up and Running 45
5 Finances How to Manage Your Money, Get Loans, and Get Paid 63
6 Brand Building and Marketing 95
7 Hiring and HR 119
8 Roadblocks 157
9 Growth and Scale 171
10 Transitions 193
Stay tuned for book review…