Running a small business is a major undertaking for any family. Businesses generally mean financial independence, entrepreneurship and being on the fast track towards economic security and stability. However, starting a business and developing it in order to be successful is not just a walk in park.
There are a lot of things that should be taken into consideration before attempting to start a business and a lot more things to do to maintain and gear it towards success. However, if you get it right, it can be rewarding both emotionally and financially. Here are some helpful tips to consider when deciding to start your own small business.
Step 1: Have Something Worth Selling
The aim of any business is to provide products or services to customers and in return have a profit. This simple give and take principle is what drives every single business in operation today. So, when deciding to start a business, you should always be sure that what you have is “saleable.” You need to know whether people will actually buy your product or services before you spend time creating it. One easy way is to see if someone is already selling a similar product or service. If so are they profitable? What can you do to improve it or make it unique?
Step 2: Create a Business Plan
Next is to create a simple business plan. This doesn’t mean that one should do extensive research on marketing strategies in order for it to be perfect. However, business planning should not be the reason for hesitating to start business. Sadly many people tend to stall their dreams because their business plan is not yet that perfect. In actuality, most entrepreneurs get ingenious ideas along the way and found successful strategies. A simple business plan consists of the following:
- What is the product / service?
- How much are people willing to pay for that product / service?
- How much will it cost to produce / provide?
- What is your projected profit margin?
- How much income do you need to generate?
- How many items do you need to sell to generate the desired income?
- Who are the intended market?
- Is the market large enough to sell the required number of items?
- How are you going to advertise the business?
- Getting the necessary permits (depending on where one places the business)
Step 3: Name Your business
Though many seem to take it for granted, creating a catchy name for one’s business is important. This is the first thing that will connect with people which is why names should always catch the attention of the public. This can be a tricky thing to develop as there is a fine line between an interesting name and one thoroughly ridiculous. The name should give the proper feel and generally should let the potential customer know what is being sold. If you plan on growing the business and want to leave open the option of eventually selling it, you might not want to use your own name. After all Joe’s plumbing might not be so valuable without Joe.
Step 4: Find Start-up Capital
Generally speaking, it is always best to use one’s own money for the start up rather than borrowing money. Spending your own money is preferable if at all possible because there are no interest obligations that will add stress for the fledgling business. If you don’t have enough money, borrowing money from friends and family might be the next best thing but it can put a stress on family relationships if the business venture doesn’t work out. Getting entangled early in bank loans can really be a headache if the business doesn’t get profitable as planned. The one advantage is that presenting your idea before a bank can force you to look at your idea realistically and determine how dedicated you are and if the idea is realistic. Another great source of funds is “crowdsourcing” or “crowd funding.” There are several different models of how it works but one method is to actually offer your product to the first investors. This helps in two ways:
- It can help determine interest in your product, after all, they are basically willing to buy it before you even make it.
- It helps raise the money you need to get started.
According to Forbes these are the top 10 Crowd Funding Sites:
- Kickstarter
- Indiegogo
- Crowdfunder
- Rockethub
- Crowdrise
- Somolend
- Appbackr
- AngelList
- Invested.in
- Quirky
Step 5: Start Small
Once everything is in order, go forward with the plan and see it through. It is best to start small and not get in over your head. Experience will come naturally and during this trial and error phase, an entrepreneur can learn almost everything he or she needs to keep the business afloat. Remember also, that during the first months of the business, losing money is often expected, but a better plan is to try and find ways to make it profitable from the start by keeping overhead low. After all Apple began in a garage they didn’t go out and rent a huge warehouse first thing. The garage cost them nothing to rent and the parts were purchased on an as needed basis so after selling the first computer they would know if they were profitable or not. The real profit will come later as you scale up to bigger and better things, especially when people get familiar with the business’s services or product but starting out with mountains of inventory makes it more difficult to succeed.
See Also:
- Family Run Non-Profit
- 3 Essentials When Starting Up Your Own Business
- 5 Tips for Managing Your Personal and Small Business Finances at the Same Time
- 10 Ways to Make Money Online