A couple of years ago I found myself unemployed and wondering what I would do next. I had a business concept, but no idea how to go about making it a reality. My husband, who has been self-employed for many years, suggested that I seek assistance. As a result, I applied for the Self Employment Training Program offered through the YMCA. I was accepted and began the journey to self-employment.
Yes, we all have heard of those overnight success stories, but the truth is that they are more of an exception than the rule. Launching a small business requires not only an idea and passion but hard work and wisdom.
If you are looking for advice on how to start a small business there are endless sources you can look to. What you will find is that there is no perfect formula. While this is one more such source, this article attempts to outline some of the common guidelines I learned about, have read about, and actually applied.
Guideline 1: Face Your Excuses
Life is full of risk and risk is normal. However, many people who have a dream of becoming self-employed allow fear to stop them. The excuses are numerous such as the risk of failure, the fear of the unknown, the risk of success, the time, money, and responsibility involved. But, anything worth pursuing will have risks, so don’t let that stop you. Rather, address and assess each one and find a solution. Then, move forward.
Guideline 2: Prepare Extensively
In order for your business idea to have a strong chance of success, fundamental preparation is required. Below are areas to consider.
A. Refine Your Idea
So, you have an idea for a business, but now it is time to answer some important questions.
Question 1: Does your idea solve a problem?
Many people have personal reasons for wanting to be self-employed, and there is nothing wrong with that. However, in order to be successful, your idea must satisfy more than a personal need. In order to gain any traction, it is critical that your idea is a solution to a problem in the marketplace or a particular niche. It needs to fill a hole or meet a need. Also, how does your idea add value to the lives of others? If your idea is similar to that of an existing business take the time to learn about that business and determine how you can meet that need better. Ultimately if your product or service is a solution and fulfills your passion you have the start of a winning formula.
Question 2: Does your idea have merit?
Once the first question has been answered it is time to determine if your idea has merit to others. This can be discovered by seeking advice from other business owners, and by running your idea by family and friends. Be sure to ask for complete honesty. Their reaction and ideas could be a sign of how potential customers may react. Try to absorb as much advice as possible, especially from those who have ventured out before you. Learn from their mistakes and take notes so that you will be able to apply what you learn when you make a business plan.
B. Prepare a Business Plan
Now that you have refined your idea it is time to make a Business Plan. To do this properly will take much of your time. As you complete you flesh out your idea further, and at the end of will have a blueprint. This concrete document can then be presented to a bank or investor should that be needed. A business plan will consider such topics as:
- A Description of your Business (name, type of organization, location)
- Market Research (Collect info about the market/your market, competition, and customers)
- Marketing Plan (Strategy to market your product or service)
- Organizational Structure (Sole Proprietor, Partnership, Corporation, Limited Liability Company)
- Operations (Policies, procedures, practices)
- Risk Analysis (Identify potential risks and how you will minimize or alleviate them)
- Financials (Preparation of reasonable estimates for your business)
A study mentioned in “Business Plans For Dummies” by Paul Tiffany states that companies with a business plan have 50% more profits and revenue than non-planning businesses. Writing a business plan just makes good business sense. See more details here.
Guideline 3: Consider These Specifics
As you diligently and thoroughly complete your business plan, some additional considerations can and should be pondered, explored, and completed somewhere along the way.
A. Build Your Brand
A brand is what defines the personality of the business and the relationship your business wishes to have with the target market. Your brand will consist of such items as; your name, logo, color palette, font, shapes, and messaging. It will be represented on your website and in social messaging. Brand identity is important because it communicates your story and forms a bond with the customer. To develop your brand, you will also want to consider your mission (what you want your customer to experience) and your core values and vision (what you desire for the company).
B. Get Business License/Permits
One of the first things you will do is register your business name. You will also need a tax business number (BN in Canada and EIN in the United States). Depending on the type and location of your business additional licenses and permits may be required.
C. Create an Accounting System
From the moment you begin to develop your business idea and then launch be mindful of financials. Even if you are not a numbers person there is no getting around the bookkeeping and accounting aspect of owning and running a business. Fortunately, there are plenty of apps out there to help you with this. One of the least complicated, user-friendly is Pro-Ledger Online. Eventually, you will also want to consider finding a reliable accountant which you can read about in this article by clicking here.
D. Promote Your Business
While in the process of developing your business plan be sure to practice promoting yourself and your business. It is a very competitive market and you cannot afford to be bashful. Even if you are relatively shy it is an important skill to learn how to put yourself out there. Practice introducing yourself and your business, even if it is in front of a mirror and then with friends and family. Over time your introduction and promotion will become refined. This skill will become particularly useful when you begin to network.
E. Keep it Simple
After reading this you might feel overwhelmed, but let me encourage you. Keep in the back of your mind start small but dream big. By taking things one step at a time you will stay focused. This will prevent you from allowing things to snowball (avoid adding unnecessary bells and whistles that will only cost you money). As you grow, you can branch out.
As mentioned at the outset there is a great deal of advice available to you and plenty of resources. The previous are some guidelines I found helpful. To have an idea and passion is the beginning. To move forward you need to do your due diligence and planning. This will provide wisdom and move you in the right direction (Mike Kappel).