Why and How to Start Your Own Business

Countless people dream of one day starting their own business. There’s something innate in human beings that desires to create and start something new, and never in history has it been easier to act on that desire. The internet and a myriad of other technologies have made the process of starting, registering, and launching a business as simple as thinking up an idea and clicking a few buttons. Okay, maybe it’s not that simple (not if you want to be among the minority that are successful and stick around, anyway), but you get the point.

The SBA estimates that over 620,000 small businesses are started each year in the US, and that figure is likely on the low end if you think about all the small businesses that don’t register with their state. Not only that, but the SBA estimates that there are nearly 32.5 million small businesses in the US, accounting for nearly 99.9 percent of all US businesses.

So, everyone else is doing it…but, should you?

Why Start Your Own Business

When most of us fantasize about starting a business, we envision ourselves achieving 2 fundamental things:

  1. More Financial Security – Let’s admit it. One of the main reasons we want to start our own business is that we believe we’ll make a lot of money. We’ll offer the world something completely new, something it never knew it needed, or we’ll do something that’s already being done, but we’ll do it 10 times better; either way, we’ll rake in the big bucks. And maybe, just maybe, if we do everything just right – or close enough – someone will come along and offer us millions of dollars to buy our business, and we’ll be set for life.

But seriously, we want to start a business because we hope it will make us more money.

Maybe we currently work a fairly comfortable 9 to 5 that pays the bills well and good enough, but it’s not enough to provide us with the financial security and peace of mind we really want for our loved ones and ourselves. Or maybe we work ourselves to the bone in a labor-intensive job that pays minimum wage (or in some extreme – and illegal – cases, maybe less), and we’re barely scraping by each day.

Either way, owning our own business could be the best path for us to improve our financial livelihood and give us the financial security we so desperately need for our families.

  1. More Control of Our Time – The other reason we want to start our own business is that we hope it will provide us with more freedom and autonomy in our lives. We want to wake up each day and set our own hours, our own priorities. We want to be our own boss.

Many of us have families and we therefore want control over our time so that we can be there for them whenever they need us. Some of us simply desire the freedom to come and go as we please, with no one to answer to except for ourselves. Others of us are tired of working around the clock, having precious little time for ourselves or our loved ones.

Either way, the ultimate desire is the same – we just want control of our time. We don’t want someone else to have the power to dictate how we spend most of our waking hours. We want to call the shots.

So we all want more time and money, and deep down we all hope that our own business would provide us with both. But, of course, the big question in all of this is whether or not that’s true. Is it realistic to believe that if you start your own business you’ll be able to improve your financial livelihood and achieve better autonomy over your time? Or is that just a dream?

How to Start a Successful Business

The fact is that starting a successful business – one that not only provides you with more time and money but one that lasts – is hard work. This is no ‘get rich quick’ scheme. Not only will you need to really commit yourself to your business and put in the blood, sweat, and tears required to be successful, but you’ll also need some help along the way. It’s not as easy as having an idea and deciding to get started; there are a number of things that go into it, and you need to ensure you have all of your ducks in a row before you just jump in feet first.

At a minimum, you’ll need the following items if you want start a successful business:

  1. The Right Idea – Generally speaking, new business ideas fall into 1 of 2 categories, novel or imitative. A novel idea is one that is new and hasn’t been done before, while an imitative idea is something that already exists.

For example, if you had the idea back in the early 2000s for a rideshare app that would disrupt the taxi industry, your idea would have been considered novel. It was wholly new and hadn’t been done before (at least not at the scale of what Uber and Lyft have achieved). On the other hand, if your idea is to start a landscaping business, then your idea is imitative.

It’s important to call out that one category is not better than the other. People may generally think that novel ideas are better, as they provide you with a higher likelihood of building a massive, one-of-a-kind business, but even that is truly rare. Whether a novel or imitative idea is better depends solely on your goals and objectives for your business. If you want to create something wholly unique and introduce the world to an entirely new market category, then your idea needs to be novel. If you just want to create something that leverages the skills and experiences you have to improve your livelihood, while helping and serving your community, then an imitative idea is perfectly acceptable.

Either way, the most important thing is that your idea is the right idea. For both the novel idea and the imitative idea, this simply means that your business will provide a product or service that your intended customers actually want or need, a topic we’ll explore in the next point, Product-Market Fit.

  1. Product-Market Fit – Product-market fit is just a fancy term for saying that your business offers a product/service that customers want or need enough to buy. In other words, there is or there will be demand for your product or service.

Obviously, this is easier to know for imitative ideas, as there’s typically already proven demand for those products and services. Going back to the landscaping idea, in all likelihood, you already know there’s demand for that service, but you still need to assess product-market fit in your specific context.

For example, what if you live in a town where almost no one has a grassy yard? While your landscaping idea would have product-market fit, generally, it wouldn’t have it specific to your context, and therefore it’s unlikely your business would succeed.

Or, what if your idea is to start a construction business that offers home renovation services? Again, on the surface this is an imitative idea that we generally know there’s demand for; however, you need to determine if there’s product-market fit in your specific context. If, for example, you have absolutely no experience in the construction business, then you likely won’t have product-market fit because the service you offer will be subpar and insufficient to what the market demands.

What about novel ideas – how do you know if a novel idea has product-market fit? Unfortunately, there’s no easy answer to this one. If there were, then more people would start businesses, as you’d remove some of the risk associated with novel ideas.

The honest answer is there’s no way to truly know if a novel business idea will have product-market fit until you make the product or service – or at least a minimum viable product version – available to its intended customers. From there, you’ll measure and assess the market’s response to your product or service, tweak and iterate where necessary, and try again.

There are a lot of nuances involved if you’re idea is novel, and frankly this subject is out of the scope of what this post intends to address – other than to say that product-market fit is something you absolutely must determine and get right in order for your business to be successful – so the best thing you can do if you have a novel idea is to go read The Lean Startup by Eric Ries and Zero to One by Peter Thiel (PayPal’s founder).

The main point here is that if you want to start a successful business, it’s critical that you give some thought to whether or not your product or service will have product-market fit.

  1. A Business Plan – Think of a business plan as a guide or roadmap for your intended business.

The exercise of creating a business plan itself can be incredibly insightful and helpful to you, as it will force you to really think about some of the critical ingredients to your success: Who is your company and what’s it all about – why do you exist in the first place? What is your product or service, and who is your ideal customer? How will you reach your intended customers? What makes your product or service different from competitors? How will you grow?

A good business plan can help you focus your time, attention, and resources on the right path for success. On the other hand, if you don’t create one at all, you’ll be prone to wander around in the dark, and your business will likely flounder.

  1. Financial Discipline – Money is the lifeblood of your business, and good financial discipline is the foundation upon which you build your business. Without good financial discipline, it doesn’t matter if you absolutely nail everything else, the house will inevitably crumble.

One of the offshoots from your business plan will be a financial model, which will effectively demonstrate the financial implications of your business plan. Not only will the financial model help validate whether or not your business is financially viable, but it will also provide you with a base for creating a budget that you can then use to help guide the financial decisions you make for your business.

In addition to crafting and following a good budget, it’s absolutely critical that you track, record, and analyze the actual financial performance of your business. The more boring way to say the same thing is that good bookkeeping is a necessity.

Unfortunately, a lot of small businesses miss out on the tremendous benefits of bookkeeping, because they see it as a boring, time consuming administrative task that doesn’t add value to their business. But, that couldn’t be further from the truth.

We’ll cover this topic in more detail in a future post, as it deserves more attention, but good bookkeeping provides you with the following 3 benefits, at a minimum:

Tracking and Control: Good bookkeeping provides you with the means to actually ensure you’re spending money where it will be most beneficial (and that you’re not overspending it). If your business plan is a guide that’s meant to focus your resources on the right things and your budget is the financial guardrails, then bookkeeping helps you track your actual spend and compare it to what you planned/intended. How else will you know you’re either overspending or paying for things that aren’t conducive to your success if you’re not actually tracking where the money is going?

Analysis: Good bookkeeping also provides you with financial reports and metrics that are useful in assessing how your business is performing. What do your revenues look like month-over-month? How do your expenses match up to your revenues – are they growing at the same rate, or are you getting more efficient in your spend relative to your growth in revenue? Are you profitable, and if not, are there levers you can pull to become profitable?

You simply cannot answer these (and many more) critical questions for your business without good bookkeeping.

Resources for Financing: Nearly every small business will reach a point where it needs external financing in order to grow. Whether you seek that money from investors or a loan from a financial institution, one of the bare minimum requirements will be historical financial statements. It doesn’t matter if your business is absolutely crushing it; if you don’t have the underlying financial statements and financial model to demonstrate where your business has been and where it’s capable of going, you’re going to find it difficult, if not impossible, to secure the financing you need to fuel more growth.

  1. A Little Bit of Help – Like we said from the beginning, starting a business – one that will be successful and actually achieve your goals of a better financial livelihood and more autonomy in your life – is hard work. We’ve barely scratched the surface in this post, as there are a lot of nuances and complexities involved when it comes to starting a business. At the end of the day, it’s not a journey anyone should take alone.

We all need a little bit of help along the way. What shape and form that help comes in is really up to you and will need to be specific to your situation. You need to be honest with yourself about your strengths and weaknesses; what are you good at and capable of handling on your own, and where do you struggle and need help? Or even if you’re good at a given thing, with limited time and an abundance of priorities, where is your time best spent, and where should you leverage external help?


Starting a business can be a great way for us to improve our livelihoods. It can be a means of improving our financial situation and gaining more freedom and control over our time. In other words, starting a business can help us get more margin in our lives.

But, to start a business that actually achieves those goals and sticks around requires a lot of hard work and the help of others. It requires that we both put in the challenging work of thinking critically and planning ahead, and it forces us to be honest about where we need assistance.

That’s why we exist, actually, and it’s one of the reasons we chose to call ourselves Margin. We exist to help people get more time and money in their lives by giving them the financial resources that they need to start, manage, and grow their businesses. As you assess what you need to start your own business, we’d love nothing more than to be a resource for you. Whether you need help getting off the ground (we can help you craft your business plan, financial model, etc.) or you need help with bookkeeping, we’re here for you. Get in touch with us today to learn more about how we can help you start, manage, and grow your business.