Before you even think about business names, websites, or legal filings, focus on creating a Minimally Viable Product (MVP).

My Personal Lesson:

I spent most of last year creating a comprehensive online course. I invested a lot of time and money into creating modules, videos, worksheets, and a course hosting platform. Then, I launched it, and...crickets. No one bought it.

Looking back, I realize I could have/should have created an MVP.

Instead of spending months creating a polished course, I could have offered a live, interactive workshop. I could have even offered individual sessions.

Now before I create another course, I come up with an outline, I offer it for a super low price, and I prepare for each session as I teach it.

​I still believe in charging something for the MVP because that is a better test for me that what I have to offer is something people are willing to pay for. It also means that my customers will have some skin in the game. Many people will sign up for free items, but they may not be your ideal customers or take it as seriously. Most likely they will not fully use the product either. You want to connect with people who want what you have to offer enough that they are willing to pay for it, use it and then hopefully give you a positive testimonial afterwards when you launch the full deal.

My Personal Lesson:

The concept of the MVP, introduced by Lean Startup expert Eric Ries, is a version of your product that allows you to gather the maximum amount of customer feedback with the least effort. In simpler terms, it's a basic version of your product or service that you can offer to test if people are willing to pay for it.

Why is an MVP Important?

It validates your business idea without a significant investment of time or money. It provides valuable feedback from real customers, allowing you to refine your offering. It helps you avoid the risk of spending a lot of time and money on a product that nobody wants.

Creating Your MVP:

Focus on the core value you want to provide. Create a simple, functional version of your product or service. Offer it to a small group of potential customers. Gather feedback and make improvements.

MVP Examples:

Legal and Early Stage Considerations:

You don't need to legally file a business or have a website to start making money with an MVP. You do not need a website or domain to begin. These are expenses that you can add once you have the revenue to support them.

​However, you must track all income and expenses for tax purposes. If you use a business name other than your own, you'll need to file a DBA ("doing business as") or a fictitious name with your state. While using your personal accounts is acceptable for an MVP, be sure to keep very accurate records.

Once you start generating revenue, it's crucial to manage your finances effectively. I highly recommend the “Profit First” methodology, with some adjustments, to ensure your business stays profitable. (The book is currently being offered for free on their website!)

The Power of "Profit First" and YNAB:

The core idea is to prioritize profit by taking a percentage of your revenue as profit before paying expenses. This ensures that you have a healthy financial foundation from the start.

The book recommends setting up different bank accounts for each category so you could easily end up with 10 accounts, I prefer using the software, "You Need a Budget" or YNAB to implement the "Profit First" principles.

​YNAB uses the envelope concept, where you allocate every dollar to a specific category. This gives you a clear picture of your available funds and helps you avoid overspending. YNAB helps you assign "every dollar a job" which means you know exactly where every penny in your account is going.

Bi-Weekly Allocations:

Twice a month, on the 10th and 25th, allocate your earnings into the following categories:

For example, if you earn $100 on the 2nd of the month and then $250 on the 7th, you will have $350 in “to be assigned” in YNAB when you look on the 10th of the month. You'll use the percentages from above and allocate:

$17.50 to profit,
$175 to owner's compensation,
$52.50 to taxes, and
$105 to operating expenses.

Managing Your Allocations:

Quarterly Financial Adjustments:

Review and adjust your allocation percentages quarterly (January 1, April 1, July 1, October 1). The goal is to gradually increase owner's compensation and profit. Make only small, achievable adjustments of 1-2%. See the book for more information on what your targets should be for the size of your business.

Profit Distributions

Quarterly, distribute 50% of your profit to yourself (and employees, if applicable). That is your fun reward to buy yourself something special and celebratory (your personal expenses should be covered by your ‘owners compensation’. Keep the remaining 50% as reserves in your high-yield account, aiming for 3-5 months of operating expenses. Once you have more than 5 months reserve, it’s time to invest back in the business.

Once you've validated your idea and have some cash flow, it's time to formalize your business structure.

Choosing Your Business Structure:

If your earnings stay below $100,000, you can operate as a sole proprietor. This is the simplest business structure, but it offers limited legal protection. Once your earnings exceed $100,000, consider incorporating for legal protection and tax benefits. Consult with a legal and tax professional to determine the best structure for your business.

Inspirational Encouragement:

It's absolutely possible to start a business with no money and build a thriving venture. By focusing on creating a valuable MVP, managing your finances strategically with the "Profit First" method and YNAB, and carefully planning your business structure, you'll significantly increase your chances of success. You've got this!