As a self-funded entrepreneur, you start off as little more than a freelancer but, eventually, you are unable to do everything. You can’t design and manufacture a product from beginning to end while building a media company to promote yourself and a stylish, intuitive ecommerce platform.
A self-funded entrepreneur almost always must come up with the product idea and its unique selling proposition, then define your unique position in media space. Beyond that, it all depends on what your particular skills are. You should outsource some of the following:
Content. If hustling content is your primary skill, focus on that and pay somebody else to produce the content. Even if you can’t afford a couple thousand dollars a month for a content marketing agency, you can probably afford a few hundred, as needed, on influential bloggers or content producers. It’s not about how much content you can produce but how high if the quality.
All things product. Most successful businesses aren’t built around a revolutionary product, they are built around a boring product with an innovative twist. It’s your job to come up with the twist. That doesn’t mean you need to become expert on product design, prototyping, manufacturing and distribution.
Justin Winters had three months of experience with candles when he launched Diamond Candle and built a $12M business in 18 months. His innovative idea was putting jewelry in candles. He didn't know everything about designing and manufacturing candles.
Obviously, the vast majority of self-funded entrepreneurs can't afford to outsource everything. Consider these points to decide where to spend your money:
Skills. What are you really good at? This can be a painful question because you’ll also have to admit what you’re mediocre at. Focus on the part of your business where you can contribute the most. Outsource everything else that you can afford to.
Selling proposition. Which investments will contribute the most to your unique selling proposition? You almost certainly can’t afford to go premium on everything. It’s better to do one thing really well, and if possible, to be the first to do it. Drop all unnecessary features, and skimp on any necessary features that don’t contribute to your unique selling proposition, either by doing it yourself or outsourcing at bargain-barrel prices.
Many questions are judgment calls only you can make. Do you spend on marketing or product? Which investments will have the strongest impact on profit margins, as opposed to sheer numbers? Do you know your audience well enough to spend money on design, prototyping or manufacturing, or do you need to interact with more customers first? Only after answering these questions should you start spending your money.
Pay for things in small doses. Don’t hire a full time writer or designer when you can pay a freelancer for a single piece of content. You don’t need to buy massive production runs of products. You can purchase small batches or prototypes at relatively small costs. Tim Ferris has some quick and dirty advice on prototyping and manufacturing.
I strongly recommend small experiments over big investments, especially at first. Don’t obsess over per-unit costs. It’s more important to find a market, sell to it and get feedback with as small an upfront investment as possible.
The possibilities are better than ever for self-funded entrepreneurs to dive into ecommerce and start successful businesses. Strategic thinkers who understand how to differentiate themselves with product and positioning can run low-cost experiments, discovering business opportunities while taking relatively small risks. The financial barriers to breach have all but disappeared, and modern entrepreneurs have the ability to become their own micro-media companies, avoiding the costs of traditional advertising.
Opinions expressed by Engee contributors are their own.
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