BIRD WILLIAMS: You're listening to Bird Means Business Episode 20. 

Hi there! Y'all we are in the 20s. We have made it this far, with the Bird Means Business podcast. We're just moving right along. If you don't know, I planned to start this whole thing on a whim. Yeah, so I'm glad and proud that I made it all the way to 20 episodes. You're supposed to celebrate the small wins, right? So yeah, there we go. Okay. 

I do want to say, though, that you could spend your time doing so many other things and listening to so many other amazing podcasts. So I just want to say thank you sincerely from the bottom of my heart, for being here and for listening in. It means the world. 

This episode was inspired from a question I received from one of you. On one of my recent Instagram posts, I asked, “What do y'all want to hear more of?” Because you know the purpose of this podcast isn't just for me to kind of talk at you. I want to make it like a conversation. I want you to respond and engage and more so, I want to make sure that I'm not just sharing what I think you want to hear. But that you're getting what you actually want to hear, like the questions you actually have. So I asked this question and I'm so glad that Regina responded with this question. This is what she said, “On episode six when you talked about creating a business plan, you mentioned that it can help you figure out whether an idea is actually feasible and worth pursuing. Maybe there's an episode about the things to consider before going full steam ahead with a business idea. What red flags to think about and deciding if your idea makes a good business.” And that's such a great question. So I cannot wait to dive in and I will basically just dissect her question, piece by piece. 

Before we get started, I know that many of you are new to this entrepreneurial journey, or maybe you just have a pressing question or two and need someone to just chat with who's kind of been down the road you're about to walk down. Y’all hit me up. I offer a consultation chat. And honestly, if I can get all your questions answered on the call, I am happy to. I started Bird Williams because I basically wanted to be the guide I wish I had back in 2013 when I launched my first business and had no idea what I was doing. So if you just need to ask a couple questions and just get some of your thoughts out, you can go to birdwilliams.com/consultation and book a consultation call. 

Okay, so let's start out with the first part of her question. She references episode six which is called “Why You Need a Business Plan”. Go check it out, it's a good one. And in this episode, I kind of share the importance of a business plan and I say that it helps you prove your business idea to yourself. I say that again and again. I also say it to clients and to people when I speak because it's so important that you kind of prove that this thing is actually going to work but it's not just an idea or a hobby. But that it’s actually a viable business, hence her question. 

So, I can't tell you how many times I've had a great idea. That I've had or even friends of mine have had over the years. But then when we sit down and start the process of creating a business plan, it's like, wait. Hmm. No, I don't really know how this is gonna work. I'm actually thinking right now of this time in college. There were a group of girlfriends, who we just basically decided we were going to start this business together. And you know who you are if you're listening right now. We had a name. I think we had colors and we're talking about logos and all these cool ideas of things we could do in our business. But when we started this process years ago of sitting down and working through the questions that would be coming up with a business plan. It was like, I don't know how we could actually monetize this. Yikes, meaning. How are we going to actually make money, you know, or how is actually going to work and be sustainable? And y’all, it hurt because we were so excited about it. There were four of us. And we had gotten all of our hopes up and we were all into it. We hadn't even really thought about how it was going to actually make sense and work. So, again, we were excited about a bunch of ideas but not a viable business. And I'm so grateful that we asked ourselves the hard questions, early before we invested time and energy and money into something that didn't even have the infrastructure to really last. Okay, so that's what she's referencing when she mentions that. 

And then Regina asks, “What are the things to consider before going full steam ahead with a business idea, and what red flags to think about in deciding if your idea makes a good business?” So, this is the part where you need to go ahead and get ready to take some notes. I'm going to kind of explain a few things of what I believe is a key to vitality, in a business. And then I'm going to kind of tag on the accompanying red flag. So the first thing that I'm going to think about, and you're going to hear me kind of talk about this, like as if I were an investor because investors have a very objective view of a business. They're just trying to figure out if they're going to make their money back. So it helps to think of it in that lens. So first is the problem. What problem does your business solve? The bigger and more defined that problem, the better. You might feel like, “I'm in such a saturated market”. Okay well, that's when you're gonna lean more heavily into your unique value proposition and what makes you and your business stand out amongst all the others. But if I'm investing in a business, I'm trying to understand if there's a real need for this product. Or otherwise, stated, is there a market you'll hear that or demand for this product or service? If not, or if it's just not very clear, then I'm passing. So the red flag here would be if you can’t tell me as the business owner, what problem it is that your business solves, and what your unique approach to solving that problem is. So if you're saying to me, “I'm starting a t-shirt company.” That doesn't really work, right? Who are your t-shirts for? Why would they want to buy your t-shirts over all the other t-shirts? And how are you going to be savvy with unique marketing strategies around your product, your t-shirt business? Remember the seven Ps of marketing that we discussed back in Episode 19? You're gonna have to really drum those up, because again, there's so many t-shirt companies out there. If this is going to be a viable business and outlast all the others and really reach your goals and bring in the revenue that you need. I need to understand how you're going to make that happen. So, what problem are you solving? You need to be solving a real problem.

Okay. The second thing is money. I didn't have a better way of saying that. Do you have enough money to make this work, or will you be able to raise the money to make it work? So when I launched The League, my husband and I. I remember reading that most small businesses failed because they had a lack of operating capital and operating capital just means that they couldn't run the business, and pay their bills anymore. So they had to close shop. So, when I built this financial model out, and again a financial model is a projection of the revenues that are going to be coming in from sales, and also the projected expenses that will be going out. And so then you're gonna end up with the projected profit at the end of each month. And when I did this for The League, again we're thinking about the different packages we're going to offer and how much we can charge, and how many clients we're going to get in order to get those revenue numbers. And then we're thinking about our rent and the lights and the computer software, and credit card processing fees, and all the different expenses. And then we come to this bottom number. When I did that, I saw several months of negative profit, meaning we were going to be losing money for a few months. So when I went to the total expenses line, what I did is I basically multiplied that by six. What are our total expenses every month? Multiplied that by six, and I added that to the amount that I wanted to raise from investors in the beginning. So not only our startup costs in terms of what it looked like to start in terms of getting the equipment and flooring and all those things in. But also, this extra buffer, this six months of operating capital, so that I can make sure that we had some buffer and not be exposed to the money just flowing out of the business, from the very beginning. 

I talk a lot about my whole capital raise process in episode eight. It's called “How to Raise Funding for your Business”. So, the red flag here is basically if you or someone on your team doesn't have the capacity to run your numbers, and you're unwilling or unable to like work with someone who can help you do that. So what I'm saying is there has to be someone in your business who's going to do this part, because I mean the numbers can really just make or break you. So if you find yourself here and you're like, “Ashley, what you're telling me is I don't have a viable business if I don't have someone on my team or me, that we don't understand the numbers or want to do the numbers. And I'm kind of freaking out right now.” 

This is what you need to do two things. First, you need to sit with someone who can kind of help you build out your financials. So you can go to birdwilliams.com/proveitplan. I work one on one with clients to help them with this. I  kind of guide you through the process of figuring out what startup capital you need or creating your financial projections. So that's what we do in that exercise. If you don't want to work with me that's okay. But you need to basically sit down with someone. Maybe you have a cousin or a friend, someone in the financial industry that understands Excel or anything like that, that can sit down with you and say okay, we're gonna figure this out. We'll work this out together. 

Then after you have the infrastructure there, you need to get a bookkeeper so that you don't have to worry about tracking your transactions. You could do this in QuickBooks, or in Excel. But again if it’s not your sweet spot and it's not your core competency and it completely freaks you out and it's not something that you feel like is going to fire you up and get you excited to do, to an extent. You need to just go ahead and hire a bookkeeper. So that's a cost that you need to consider. And if you go and check out Episode Two. It’s called “Secure Your Money Team”, you can learn about my accountant Alby and how he saved us from a world of trouble. So every month Alby or your bookkeeper will basically send you your financial statements. That's going to be your balance sheet and your profit and loss statement. Your profit and loss statement is also called an income statement. And that's going to be for your business. And you're going to go through and you're going to check each line item. You’re gonna say, yep, that's about how much we spent on that. That seems right. Yep, that matches our revenue. That looks right. It makes sense, He's just going to be pulling these numbers from your bank account. And that way you don't have to worry about doing it every month. All you have to do is kind of check it every month, and then just track your growth and metrics and that sort of thing. But, I mean, I could go on and on and on about the money piece. But the point is, you just need someone who's going to be able to understand the numbers in your business and help you work with that, and then someone who can sustain it over time. So, you can go ahead and book a consultation call if you have more questions on that. 

All right. And then the third thing is your team. I know I've talked a lot about team. But it's important. Your team is the heartbeat of your business, who will be the hands and feet of your business. This is like a differentiating factor. This is the game-changer. So what you need to understand is, what is needed in your business to make this ship run, what do you need, what people do you need in place to make that happen? For some people, you might not be fully committed to your business in the beginning. If you have a nine to five, I'm not saying you need to just jump ship, because let me tell you something. That 401k, and that insurance? It’s taken for granted right now. You don't even know the struggle is real when it comes to small business benefits. But there will come a time where it is important for you to be all in. But again, you want to make sure you have your numbers right to understand that. So it just depends on the business, But you may be able to keep your nine to five for a little bit before kind of going all in. But if not, then you're going to basically need to hire someone who can sustain the business while you have this other job. Basically, it’s just understanding your needs and the people that need to make this business run. And whether that's going to be mostly you or if you're gonna have to hire on other people to do that. And then being very keen on the hiring process and who you're bringing in because, again, the heartbeat of your business, right? 

It's kind of a process really. With The League, for example, I didn't have a job. I had left my job in New York where I was working as an investment banking analyst on Wall Street. And I had been out of work for a while because I was supposed to do this other business with my mom and she was like, just kidding. And it was devastating, but that's a whole other story. But I wasn't working. My husband was working all over Houston at different studios and so he had slowly stopped working at these other smaller fitness studios. But there were a couple of big fitness studios he was still with, and he worked up until a month before we launched The League. So we launched The League, December 1, 2013. I'll never forget. He worked until November 1, 2013, and. But that means that there was a whole year because we started our business plan, December of 2012. So there was a whole year between him starting this idea and him actually leaving. But we needed him to be all in for the business for it to work right. Again, kind of depends on the business, but you want to be able to kind of prepare for that both mentally and financially. And you have to make sure you have a team in place. So the red flag here is if someone comes to me and they're like, “Hey, Ashley, I want to launch this business, and it's a really work-intensive business being there's a lot of moving pieces.” You're gonna need someone to kind of be all in, but they plan to keep their job. And they don't really have the means, like financially or the capacity to bring on a team. That's a red flag. And you know I want to say something here to experience. You'll hear from a lot of people that you don't really need experience to do certain things, and that's kind of a tough one for me. But I will say I understand both sides, and it really does depend on the business and the industry. So there are some jobs, some things that you have to have a certification in, in order to practice. Like you can't just be like, I want to be a chiropractor. You have to actually get certified and go to school for it and that sort of thing. But if you wanted to open a restaurant because you just really love food and gathering people, you know how to cook. Well, that's okay because you could just hire someone who does that. So, the point is that either you need to have experience with what it is that you're doing, or you need to be able to hire on someone who does, right? My point is just that you can't be out of the blue. It has to make sense. I think, and I've said this before. I think it’s in the “Raising Capital for Your Business” episode. When the investors invested in The League back in 2013, they were really investing in me and Terry, Terry had this wealth of knowledge of the fitness industry. He'd gotten his master's degree in Health and Human Performance. I had experience on Wall Street being pushed to my limits. And it was craziness. So they felt, okay, she could probably run a business.  And again, I'm not saying that you have to check off the box on these kinds of things. It really does depend on the job, the industry, that sort of thing. The business. 

But you can't just kind of come out of the blue. If you come to me and you have no experience in what you're doing and you have no one on your team who does either. That's not going to make me feel very confident that this is going to work out. Experience is important, it doesn't have to mean like a specific degree. It just means experience. Maybe even heart will go a long way. So, that has a lot to do with the vitality of your business. 

If I'm an investor, and you come to me with a business that solves a real problem in a unique way. I'm already excited. Then, if you can show me, when this is going to make money and when I could get my money back. Then, if you tell me there's a rockstar team in place. Yeah, I'm going to be one of the first ones wanting to hand you a check. And obviously, not everyone's raising capital. I'm just using this example again because an investor is going to have a very objective opinion, all emotions aside. And if you're not raising capital, then you don't have the pressure of getting money back to investors. But you can still operate as if you do and kind of just run a tighter ship and set yourself up for more success. 

I should also say there is a lot more that goes into an actual investment decision. But I'm just trying to drive the point home, okay? So when I think about the vitality of a business, what I'm thinking is, will this business be sustained? Will it still be here five years from now? And obviously, there's so many factors that go into that. But I think you solving a problem, you being able to show the numbers, and you having a rockstar team are great signs of vitality in a business. 

So I gave you some pointers. I really hope this fires you up. So you're at this point, either thinking, Okay, I feel pretty good about where I am or, I have some things I need to work on, and I can maybe rethink my approach. But either way, be fired up. Don't allow any of this, to be like an excuse you want to hear in the back of your head to quit, or to stop. You might just need to tweak some things. But hear me loud and clear. It will never be perfect, and you will never be ready. I'm putting ready in quotes because it's a lie. No one's perfectly ready. Don't let that be an excuse. I'm gonna try really hard not to scream this part because y'all I’m hype. But you won't know what you don't know until you start, and that's how you learn. So, you can only plan for so long. You won't know if your marketing strategy works until you're actually operating the business and listening to clients and seeing what they like and don't like. So you have to start, and you have to fail to figure it out and to make it work. All right? 

So if I'm honest, I can't really tell you the moment that I knew I had a viable business with The League, which was my first business as I mentioned. Maybe it was when we needed to expand to a second location because of space constraints. Okay, that seems like okay the business is growing is doing really well. You have a viable business. But it could have even been sooner when we were even able to raise investment capital because it was like a sign that others kind of believed in what we were doing too. I don't really know. But I do know that from the moment we sat down in our living room Christmas, 2012, and started drafting the business model, and our business plan. Y'all, I felt as if the business idea was alive, it felt right. And it would prove to not be easy. And I never had any kind of assurance of success, you know. But it was like, I know this is what I'm supposed to be doing. I think that's the most important thing, because, let's just say we had to close the gym, a year or two after we launched it. You know, I would not have regretted that And I say that for real. It's because I did what I knew I was called to do for that season. I was in my lane and there was peace and there was like a rightness there. So I would encourage you to not just focus on the logo, and the website, and the social media. Those are important, but what's probably more important is you knowing that the business will make money, and survive. And that you have the right team in place and that you're actually solving something that the world actually needs. None of this will be perfect. And you won't be able to predict anything. But it does kind of need to make sense to an extent right. I say to an extent because it didn't make sense that two kids in their 20s, me and my husband, with no real startup business experience, were personally guaranteeing a five year lease for a gym idea, right? But we did it, and we're still here, by the grace of God. So I say that to kind of just show there's a fine line between it making sense, and not making sense if that makes sense. Okay, I think you follow. 

So, like I said, I'm happy to chat with you and talk through your questions around your business. You can go to birdwilliams.com/consultation to book a consultation call. Okay? All right, y'all. Well, that's all for this week. Thank you, thank you, thank you for subscribing on Apple Podcasts or following on Spotify and for telling your entrepreneur friends about Bird Means Business. And leave a review on iTunes if you can. It helps a whole lot. All right. Thank you so much, and I'll talk to you next week.