A friend I worked with for years, who I'll call Beatriz, called me recently. She had spent the weekend in London with her partner, wandering around bookshops and drinking coffee, and he asked her what business she would open if she could open one. She had spent a week sitting on the idea and just had to workshop it with someone. I was lucky enough to be that someone.
A fiction bookshop. Contemporary fiction, fantasy, science fiction, thrillers. A community space with a small cafe in the corner. Small, she said, because she can bake about four things and she makes coffee with a kettle (I told her she'd have to get a coffee machine). Books are the part she knows. She has a career in HR and a growing suspicion that she does not want it forever.
She had already decided the idea was worth something. The primary question she had for me, based on my experience, was "How do you know when the right moment to rent a space is?"
I have written before that the clearest way to explain entrepreneurship is surfing, and that there are six steps to it. The first one is getting in the water. You are in the water the moment somebody pays you. Not when you decide, not when you register the company, not when you sign a lease. When the money moves. Everything before that is setup and everything after it is iteration.
Her shop is setup. So is the lease, the fit-out, the sign above the door, and the name she is creatively working on. None of it guarantees her business is going to be a success. All of it takes time and effort and money, and ultimately none of it gets her closer to that sale, closer to getting into the water.
I helped her reframe the question. What is the shortest path to somebody handing her money for a book she picked?
Work backwards from the first sale
Mine was a market stall in Oxford in 2008, selling hoodies and shoulder bags my brother and I had imported from India. Getting to that first sale took three steps. Order the bags. Book the stall. Turn up on time and lay them out (I guess that's technically four). There was no company, no name, and no logo. The full range of sizes, the better display, all of that came later, and it came from doing the thing rather than planning it.
Do not build the perfect stall first. Work out the smallest number of steps between where you are standing and the moment money changes hands, then take those steps.
Hers are about as short as mine were. Walk into one of the coffee shops in the part of town she is thinking about and ask if she can put some books in for sale. Buy a rack and five copies each of ten books she has chosen and priced herself. Turn up, lay them out, and put a sign on top with her name on it. These are the ten books I love right now, have a look.
A book rack off Amazon is about fifty pounds ($65 to my American friends). That is the entire distance between the beach and the water.
What six weeks tells you
Then wait.
If she sells nothing in three coffee shops in six weeks, that is worth knowing, and she has learned it for the price of a rack and some inventory she can move on Facebook Marketplace afterwards. If she sells four or five in a week in one shop, that is a green light. It does not have to be a big number. Selling a handful tells her that she can pick books people want, that she can lay them out in somebody else's room, and that she can price them. It tests the theory. It tests the idea. It gets the sale, and she's done it without signing anything.
The baked goods work the same way in the other direction. Take them to a bookshop and ask if they will sell them for her. As for the community part, it has its own test, which is a pop-up book club in a wine bar for one evening.
Run those three separately and the pattern that comes back tells her which business she has. It also tells her whether she loves doing it. I have a whole ramble on whether or not you should love the business you're in, but it's too long for this post.
You cannot pressure-test an idea from the beach
A guy I have known for years has spent his career around street food. He knows the stands, he knows the operators, he knows the equipment. So we started a small business together, him running it and me putting in a bit of money and some time, selling fryers and griddles to street food sellers.
We brought in ten of each. We shipped them the cheapest way we could find and jammed them into a single-car garage in Bristol that costs about fifty pounds a quarter. Everything about it was done on the smallest budget we could manage.
Then we could not sell one.
So we tried renting them out instead. Now I think we might be becoming a rental business.
He could not have worked that out sitting at his desk. In my experience the idea an entrepreneur starts with is usually good and rarely right, pointed the correct way and off by some amount you cannot calculate from your kitchen table. The information that closes the gap only exists on the other side of the first sale. That is why you pivot once you are in the water.
So Beatriz might find she cannot make the bakery-bookshop work at all, and might find that two hundred people will pay ten pounds a month to be in her book club, get a book posted to them, and come to four events a year. That could be a better business than the shop. She will only find out by running the small version.
Go and buy coffee for the ones who failed
Two shops like the one she wants have opened near her and closed. Rents too high, too many people on the payroll. That worried her, reasonably, because it is the same idea in the same city (I also have a rant about opening identical businesses. People always tell me, "If it was such a good idea, it'd already be done," or "There are already hundreds of those." I just retort, "Take a look at gyms. There are thousands of them." There's always space for more business, but again, that's a rant way too long for this post).
She does not know either owner personally. One of them is still doing pop-ups and posting about them.
We discussed doing the difficult thing and reaching out and asking her for a coffee. That conversation might save twenty thousand pounds ($27k to my American friends) and six months of misery. Somebody who has already been through the exact thing you are about to do will tell you things you cannot find any other way, and most of them will tell you for free, because hardly anyone ever asks them.
Then build a financial model. How many books a week to cover the rent, the property taxes, the salaries, the utilities. What the margin on a paperback actually is after you have bought it. Once you have a number you are aiming at, finding a building is the easy part. Doing it the other way round, falling for a shopfront and then working out whether the numbers hold, is how people end up with a lease and a problem.
Coming out as an entrepreneur
The last thing she said was that the hard part would be telling her mum, who thinks entrepreneurs take too many risks and it never works out.
Her mum has a point about the failure rate. A lot of businesses do fail, and the number is not comforting.
But most people picture entrepreneurship as one grandiose leap. Twenty thousand down on the deposit, the build-out, the sofas, the sign above the door, and then you find out. That is not what getting in the water looks like. Getting in the water looks like a sixty-five dollar rack in somebody else's coffee shop, and four books sold in a week, and knowing something on Monday that you did not know six weeks ago.
Beatriz has the two things I would want. She is curious and she is properly aware of the risk. She is going to be fine. She just has to come out as an entrepreneur.
If you are standing where she is, with an idea and no idea whether you are allowed, message me on LinkedIn and I will give you thirty minutes on a call. Ask me anything you want. I have had a few of these conversations lately and I got as much out of them as they did.
The first question is still the older and simpler one. Are you getting in the water?