Thinking about starting a business can be overwhelming. There are so many tips out there for starting a new business that making a decision on which to follow can be confusing.
My experience as a small business owner tells me there is no perfect formula for starting a business.
How to start a small business
If you have an entrepreneurial idea, try these ten tips. Starting your own business is often a learn-as-you-go process. However, the more smart decisions you make early on, the higher your chances of success.
1. Excuses are addressed.
Numerous people dream of becoming an entrepreneur but never do. They have excuses and fears of failing. They have excuses ranging from money to time to responsibilities. There are a million reasons not to start a business.
It is scary to become your own boss, especially when you do not know how much you can afford to lose. Fearing the potential risks is normal.
But, excuses can hinder you from reaching your goals. If you really want to begin a business, you need to tackle the reasons why you believe you cannot start a business and overcome them. Don’t let the obstacle hold you back.
2. Everything must be absorbed.
Take notes on what friends, family, experts, even yourself have to say. When it comes to things related to your entrepreneurial goals, be as a sponge; as you learn, start building an idea in your head.
Keep a detailed plan in mind by writing down all the things you discover and referencing them.
When telling people about your startup, read their body language. Are they enthusiastic about the concept? Do they think you’re going in the wrong direction? Encourage your listeners to be honest with you. The collective opinion your peers arrive at could be a good indicator of how consumers will react.
Smart entrepreneurs learn from the mistakes and suggestions of other business owners. Don’t ignore the power of expert advice. These professionals know firsthand what works and what doesn’t.
3. Provide a solution
You need to focus on solving a problem, not what to sell. It’s much easier to gain a customer base when you solve a problem. Your startup needs to fill a niche or market gap.
For example, I did not create Patriot Software just because I am passionate about software. I wanted to solve an issue that small businesses like mine faced. Through my research, I discovered simple software that is both easy to operate and affordable for small businesses.
Understand your motives for setting up your own business and brand your business accordingly. Understand what challenges your ideal customers face and what you can do to solve them.
4. Simple is best.
As many entrepreneurs do, you have a business idea that you want to pursue. Don’t let your concept snowball into something hard to do. You wouldn’t want to come up with an overly complex product that nobody wants to buy.
Try to start small and narrow your focus as an entrepreneur. Develop a simple, quality good or service. A successful business should fulfill customers' expectations and surpass their own.
Weaken unnecessary capabilities that slow your business down and cost you more money. As a small business, you won't need as many bells and whistles as a giant corporation. It'll be easier to expand your business as it grows.
5. Costs must be accounted for.
When developing your business plan, figure out how much it will cost. You will need to factor in every business expense necessary to launch and maintain that business. These expenses include your location, rent, supplies, marketing, and more.
Take whatever dollar amount you think you need and quadruple it. Seriously, quadruple it. You will face the unexpected expenses of running a business around every corner. It’s better to be over-prepared than short on cash when bills start to roll in.
When you're considering startup costs, don't forget your personal budget. Consider how much money you need to live, including food, gas, healthcare, etc. Order your personal expenses from most important to least important (e.g., mortgage, utility payments, entertainment).
You should get a handle on all your expenses before creating a business budget. At first, you might need outside funding to get by, such as a small business loan. Make sure you have reviewed all your options before investing your money in a startup.
6. Imagine yourself without any money.
There is a high probability that this will happen. I have tried several times, but nothing has worked long-term. And, I have almost gone bankrupt.
The collapse of an unsuccessful business is a reality for many entrepreneurs. Half of all new businesses fail within the first two years of opening. What would you do in the event of no incoming funds?
The worst-case scenario should be planned for. You may need to get a job right away or temporarily move back in with your parents. You could end up given little respite and have to go without any comforts. Prepare for a scenario in which your business plan fails.
Check your current source of income. What is your current income? How long would your savings last if you quit your current job? Are there any unexpected issues that might ruin the success of your business? Be prepared for all the scenarios that could arise if the business fails.
7. Build while you earn
When you're ready to start your own business, don't leave your day job just yet. Starting a successful business is a process. Develop your business in stages as you transition from an employee to an entrepreneur.
As a new business owner, you will need time to earn a steady income. Try to continue working your normal nine-to-five while working on your business in your spare time. As soon as your company has a good cash flow, you can devote yourself fully to business ownership.
8. Let your business be known
There is one challenge that many business owners face—they don’t know how to sell. Sharing your business with the world can be overwhelming, especially when you’re new.
In order to succeed in business, you cannot afford to be shy. If you don't convince consumers to buy from you and support your company, it is really difficult to make money.
When I was just starting out, I had to do my first public speaking event. I was not well-prepared or experienced at talking to large groups of people, not to mention I didn’t particularly enjoy the thought of facing my biggest fear.
I needed to get out of my comfort zone if I wanted my young business to succeed. I did this by planning and hosting nearly 70 three-day conventions for my network recruiting customers.
It’s hard for me to describe how scared I was. However, I was able to conquer my fear after speaking at the conventions. Even though I was introverted, I learned how to “put myself out there” for the sake of my business.
It is important that you manage your emotions and be able to communicate about your business even if it makes you uncomfortable.
9. Start a small business by knowing the legal requirements.
Businesses can be exciting. Laws aren't. But, if you fail to stick to government regulations, you could face steep penalties.
If you are setting up your company, you should talk to a small business accountant about the laws that apply to your state, business structure, and industry.
10. Passion must be balanced with wisdom.
Success in business requires passion. Passion makes your process better, so your business grows.
That said, don’t let your emotions dictate your decisions or your actions. Passion is necessary to propel you forward, but knowledge takes your inspiration to the next level.
Get to know your industry and talk to your target customers to find out how your business can succeed. Ask experts about starting a business. Collaborate with financial advisors and lawyers for help in certain areas of business.
Think of your business as driving a car. Let your passion power the gas pedal while your mind controls the steering wheel. Because of this, you will be sure of the direction you’re going and maintain the momentum necessary to get there.
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