It doesn’t matter why you start: whether you’ve become part of the unemployed, need to supplement your income to pay for a child’s college education, or simply have a passion to “strike out on your own,” starting your business is a worthwhile goal.
More Americans are entering the world of entrepreneurship than ever before. In a July 2012 interview with Forbes magazine, Jack Sunderlage, Executive Vice President of National Sales for Grow America, reported that more than 11.5 million new U.S. businesses have emerged since March 2011.
What does it take to start your own business?
1. Decide what type of business you want to start.
You may not have a clever, new idea that the world will find fascinating and jump at the chance to buy from. However, there are many businesses of the “same old type” that you might be able to run better than those around you.
For instance, the salon you frequent is close to home, yet you have to sign in and wait for up to an hour for service and it lacks a certain “atmosphere.” You just want to get in and out as quickly as possible. But the salon on the far side of town has a more relaxing air about it, and they take appointments. If it were closer to home, you’d probably go there instead. There are many businesses you have an opinion about, yet can’t avoid because you need their services. If it were your business, you would know what changes you would make.
Think about what you would want out of a business as a consumer. Now is your opportunity.
2. Create a business plan.
Don’t worry about writing a lengthy business plan with 5- and 10-year projections. You can start out small and keep it to one or two pages. Include what your business will be, to whom you’ll be selling services or products to (your target customer), how much you’ll charge, and how you plan to do it. This includes what resources you’ll need, including location, staff, furniture, supplies, equipment, telephone, utilities, internet connection, POS (point of sale) system — and what your estimated start-up costs will be. Research and comparison shopping can help to reduce your operation costs. For example, investing into a MegaPath internet service can help reduce your total online costs. Also note how you’ll pay back your start-up loan, if necessary, and how long it will take.
3. Determine how much to charge.
Besides researching what similar businesses charge, ask yourself what kind of income you need to earn. Don’t expect to get rich the first year; be realistic about the growth of your company. List your expenses, such as rent, payroll, taxes, insurance, utilities, consumables, and other monthly costs.
4. Establish how you’ll receive payment from customers.
Getting paid in cash is nice, but most people don’t pay in cash these days, nor write checks. You’ll want to establish a merchant account so you can receive payments by debit and credit card. This is otherwise known as “payment processing.” Payment processing services work with a bank to securely handle debit and credit card transactions. These services will also help to reconcile your accounting to ensure all payments were made to your account. There are many different plans and services offered, so be sure to research several to determine the most quality with the best rates that suits your needs. For help comparing rates from different payment processing companies click here.
5. Get help.
Seek some advice from a new business resource, such as the Small Business Administration and Entrepreneur Magazine. Both of these sites have excellent resources and tools to help steer you in the right direction.
Don’t let fear of the unknown get in the way of starting your own business. It’s an exciting, challenging, yet rewarding opportunity!
I hear there is a business called blogging? Think I should give it a shot?
Great tips. I have thought about doing this a lot but there would be things I would be giving up if I quit my regular job. Plus I don’t seem to have the time I need to give to develop it right now. I will definitely keep this in mind for when I do though, thanks.
Good points! I would add network/job shadow or ask someone who already does it. I am real big on find out as much as I can before I make a decision.
Finding a good mentor is helpful as well. In my experience people who have had success are very willing to share their experiences good and bad. You don’t always have to reinvent the wheel.
I agree with Kim, having a mentor is very important. I went to the chamber of commerce too and they had a free follow-up service where they helped you get your company started, told you about funding from the government or business angels, offered courses on accounting and basic tips to run a business, very helpful!
The creation of a business plan, I guess, is the most critical part in starting one’s business. To strategize in order to get noticed despite the existence of a great competition is a major challenge.
I agree, Amy! But don’t start the biz plan for “them” because “they” said to do it. Have a biz plan so you know who does what in your company and what your process will be.
Nice job simplifying starting a business! People make it overly complex sometimes, but you really boiled it down to the basics.
I’ve dabbled in starting my own business; however, I find that a lot of the hidden costs aren’t talked about upfront. I probably should have taken your advice with a mentor or mentors. I did ask around, but I don’t think I asked the right questions like how much for taxes, how much for your own healthcare, etc. Thanks!
Find something you enjoy doing and go for it. Avoid debt and grow the business from profits earned and you’ll have a blast.
Oh, it’s THAT easy, is it?
Snap, Kathleen. Snap.
Great tips. but I think that is only the beginning! There is SO much more to branching out on your own. But you’re right in that working for yourself is bigger than ever!
Taking advantage of free resources is a good tip because it can be quite confusing in the beginning. And, consulting with lawyers and accountants can get pretty confusing. Learn the foundations first and then go to the professionals for specifics.
As I am reading this, I am trying to apply it in blogging. My business is blogging. I like it when you said, “Do not expect to be rich the first year”. That is what I am struggling with now. My blog is only three weeks old I know but I am frustrated with an average of 60 views a day.
It’ll come, man, it’ll come. Just to lift your spirits: OG and I were blogging for about three months before we hit 60 people reading. We were fired up every day more than 30 read our shit.