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How to Start Your Own Business

Running your own business is a rewarding but demanding career and life choice. There are many different opinions about how to start a business from writing and researching a detailed business plan to jumping into a passion and trying to make money out of it.

Steps


  1. Start with an idea. This doesn't have to be a brand new invention or new product. In fact, many successful small businesses have found a way to deliver an existing service more efficiently or economically or have customized an existing product or service.
  2. Put together a business plan. This doesn't require hundreds of pages with thousands of charts. Use the plan to research things like how much you can charge for your product/service, how much it will cost to produce or deliver (include variable & fixed costs), and the size of your potential market (i.e. # of customers). The plan should evaluate your competitors - how many competitors, how strong are they, where are they, how will you compete. The plan should state what is required to enter this market, barriers to entry such as high fixed costs (factories, restaurants) and government regulations that must be met.
  3. Determine if you need financing. Your business plan will include a section on financing. How will you pay the costs to start and run your business? Do you need a bank loan? Use credit cards? Self finance? Also, you'll need to consider how much salary you need to support yourself while starting your business.
  4. Put together your initial marketing plan. Marketing need not cost a fortune. Some businesses require very little. For example, many service businesses such as accounting firms build their practices through word-of-mouth referrals. You can also join free or low-cost associations to build awareness of your small business. Again, your business plan (product, customer, competitor) will help you determine the marketing efforts you need to undertake.
  5. Build your infrastructure early. This doesn't mean build a big factory or a fancy office. It simply means keep accurate customer records, a clean set of updated books and a technology foundation, if necessary. One of the downfalls of many small businesses is that they don't know if they're making or losing money (i.e. the need for a clean set of books). Another downfall is when small business owners try to sell their company years later but lack accurate customer history and customer information. Many times, the customers of a small business are its best asset, and, without the records, the small business can be sold only for salvage.

Tips


  • Use free resources. Your local library contains numerous useful references regarding incorporation, writing business plans, marketing, as well as information specific to your industry. The Small Business Association, Chambers of Commerce, AMEX Small Business website, associations for your industry, associations by ethnicity...all of these offer training, materials, networking and sometimes financing. Another good option is SCORE, a group of retired executives who provide business start-up advice.
  • Recognize that getting your business off the ground will take time. Most businesses don't become profitable right away, so plan for that in your personal life too. You will be making sacrifices to be your own boss.

Warnings


  • Running your own business is extremely time-consuming. You can rarely leave work "at home" because you're the boss now.
  • Be sure to carve out time for yourself. Make sure you stick with an exercise program or build in time to see your family. As mentioned in Warning #1 above, running your own business can consume you if you let it.

Sources and Citations

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posted by Zee @ 6:37 PM 2 Comments