How to Start a Successful Business with the Lean Startup Method
Starting a business is an exciting but risky venture, especially if you don’t have the necessary capital. Many people believe that starting a business requires a lot of money. However, some of the world’s most successful startups have been established using the lean startup method.
Despite the assumption that you need a lot of money to start a business, the lean startup approach is a smarter, less expensive, and less risky way to start a new venture. In this article, we’ll explore how the lean startup method can help entrepreneurs like Jane, a 24-year-old aspiring hair salon owner in Nairobi, Kenya.
Sketch Out Potential Customers
Before investing any money in a business, it’s essential to determine whether people are interested in your product or service. Jane tested her skills and gained confidence as a hair stylist by offering services to her family and friends. While doing this, she discovered that there was a demand for her services. However, one significant challenge she faced was that there were many hair and beauty salons in the area, making it challenging to compete.
Run a Pilot: Try A Small Test
Jane decided to test her plans by running a small test before investing a lot of money. She began by renting a seat in a local salon for a few weeks, assisting the owner while learning more about the salon business. This allowed her to determine how costly it was to run a salon, such as rent, licensing fees, equipment costs, and the inventory of unused supplies. After analyzing all the costs, she realized that opening a traditional salon would require almost Ksh 100k.
Instead of opening her own salon, she decided to rent a seat and provide her specialty styling services, which required a minimal investment. By keeping her costs low, she could earn enough to make a profit.
Create a Minimum Viable Business
Suppose you can generate more income than your operating costs, then you have a minimum viable business. Jane started with just one seat and focused on providing high-quality service at a lower rate than competing stylists. Her business was profitable, but she realized that if she continued at this rate, she wouldn’t make enough money to open her own salon.
Learn and Adapt
Jane needed more clients, so she began sharing images of her client’s hairstyles and asking her regular customers for referrals. One of her clients made a unique request; she asked if Jane could style her hair at home instead of coming to the salon. This inspired Jane to rethink her business model. She decided to launch a mobile salon business that offered in-home styling services.
Grow by Working Smart
By keeping her costs low and finding clever ways to advertise, Jane could save money to invest in new services. For example, by offering discounts to her female clients, they would refer her to other women in their estate or building, which helped her grow her clientele. She found that by braiding hair, she could also profit from straightening hair, which led her to invest in a blow dryer. She also saved money by purchasing second-hand equipment from other hair stylists who were upgrading their businesses.
Jane is now so successful in her mobile salon business that she has given up her dream of opening a traditional salon. She attributes her success to the lean startup approach, which gave her valuable lessons that allowed her to thrive in her field. By combining creativity, dedication, and hard work with the lean startup method, anyone can become a successful entrepreneur.