The real challenge to starting a business from scratch

A reader sent in a question I love: what daily things was I facing at the start of my successful business, and how did I handle them? Well, that was quite a while ago. But here is what is great about the timing. I can tell you what I am facing right now, today, because I am starting a company from scratch all over again.

It is called Cummins Worldwide, it is in Florida, and it is in the financial services industry, which I have never done before. The whole thing is brand new for me. The company has been open for maybe five or six months, we have about eight employees, and we already earn more than we spend to produce the service. So I am taking a big win on it.

So instead of reaching way back for old memories, let me walk you through exactly what I am juggling right now. Because starting from scratch is starting from scratch, and the challenges do not change much.

The first hire is HR

The first thing I knew I needed was a human resources department. I probably had ten or fifteen people presented to me as candidates to lead it. And as far as I am concerned, this is the most important person in the entire company. More important than me. Let me explain why.

Any person is attracted to people like themselves. I am attracted to people like me. I do not mean looks or anything like that. I mean people who think and act and behave the way I do. We call them friends. And if I worked in HR, those are exactly the kind of people I would want to hire.

So you could say that the people who work in your HR department will copy and paste themselves throughout your entire organization. That is why this person cannot be anything but the best of the best. Top shelf, nothing less. Every hire they make is a copy of them, spreading through your whole company.

Get the arithmetic right

Now, any business runs on the same basic arithmetic. You have a product you buy for a dollar, and you are trying to get it into the hands of others. Maybe you sell it for a dollar fifty, because you are going to sell millions of them, and that works. Or maybe you are only going to sell three hundred of them, so you had better sell it for four dollars, because you cannot make it up on volume. You have to work out your pricing.

Then you have to get people who are going to deliver this product, so that when you start selling it, you can actually keep the promises you made. Unless you plan on delivering everything yourself, and that does not scale past you.

Solve a problem people pay for

Here is the problem my new company solves. Most people, no matter how much money they make, do not know where it goes. I mean this sincerely. It comes in and it disappears. Fifty thousand a year, one hundred thousand, five hundred thousand, five million a year, same exact problem. Where does it all go? They do not have control of their money, and making more of it does not resolve it. It just sees more go out the back door.

Years ago I developed an amazing system for myself so I always know where my finances are. I do well, and I want to know what is going on with my money. So the product question became: how do I bring that control factor to other people? How do I make it something they need, something they desire, something that solves a real problem, so they are willing to pay for the service?

And you have to know who your customer is. I am dealing with wealthy people, because they are the ones who can afford a premium service like this. What do they want? What do they need? How do I explain what we do in a way that makes someone desire it? That is product development, and it never stops.

The juggling never ends

The next thing on my desk: I have to create someone other than myself who can talk about what we do, and talk about it intelligently and cleverly, so more clients come to the office. And after that, I am working on whether I can get someone smart enough to deliver this service the way I want it delivered, without making it complicated.

Right now, my daily work is the juggling of everything I just described. Hiring, pricing, delivery, product, sales. It always comes down to fundamentals, basics, because that is what a business does. You provide something that people pay you money for, and you make more than you eat, so you have this thing called a profit.

And I will tell you the honest truth: I do not think the juggling ever ends. It goes on and on and on. It just becomes larger and larger in size and scope. That is the real challenge of starting from scratch, and it is also the fun of it.