It is perhaps the true “American Dream”: leaving your job working for someone else to start your own business.
The idea is that not only do you have more control–over your time commitment, pay, the types of customers you deal with–but it also enables people to engage in an activity they actually have a passion for.
However, just having that passion is not enough to make a venture successful. It takes thorough planning, researching all of the available resources, and a major time investment.
The following is an outline describing several key steps that need to be considered when making the leap from employee to employer (in no particular order of importance since they are all important). The planning stage is perhaps the most important of the entire process, as these decisions will affect everything that follows.
- Choose something that you have a passion for. This venture is still a job, and you will be less likely to put forth the requisite effort and care if you are not emotionally attached to the business.
- Try different methods of raising capital. Friends & family can only help so much monetarily, but if you ask them to help you with something like crowdfunding for start-ups (or even a business looking to expand) they may be more open since sharing can be just as beneficial as contributing.
- Never just decide one day to quit your job. You need to have reserves other sources of cash flow to cover personal as well business expenses until you start turning a profit.
- Speaking of which, don’t worry as much about sales. Concentrate on continually being profitable.
- Do your research into the market you are looking to get into. Unless you have a new invention or can revolutionize a current process, you need to find a niche market in which you can differentiate yourself from every other similar business.
- Always consult a legal professional, preferably one that specializes in business start-ups or an accounting professional. They will be the best source of guidance when it comes to selecting a business structure and naming issues, as well as state and local licensing issues.
- Stick to what you know best and do not try to do everything yourself! If you are not good at handling finances, then hire an accountant or bookeeper. If you are not graphically inclined, then hire a design firm to create your logo and marketing tools. It is always cheaper to spend the money and have it done right from the beginning than it is to fix a problem.
- Do not rush. Take your time and make sure that everything is to your specification. You need to be able to 100% ready for business from day the doors first open.
- Network. Tell everyone you know about your business. Word of mouth is the cheapest and most effective form of marketing. Also solicit their opinions on everything from the name of the business to the logo design to the promotions you will be having. Having outsiders who are less biased critique your business leads to more honest answers and will most likely reflect the public’s opinions as well.
- Make sure to budget enough money for advertising & marketing. Even if you are running a business out of your parents’ basement you want to put forward a professional image, not one that is based on a free email account, marketing materials with another company’s logo and information imprinted on it, or anything else that would make your business look amateurish.
- Have patience. Success is not an overnight occurrence, and generally will take much time, effort, and work.
- Try to find a successful entrepreneur to be a mentor or sounding board. Try to pick their brains as much as you can without seeming to be intrusive. Many successful people are more than happy to share their stories.
- Join professional associations, the local Chamber of Commerce, networking groups. Form strategic alliances with other who offer products or services that complement or enhance one another to gain mutual benefit.
- Don’t be afraid to take calculated risks, just take care not to be too reckless.
- Make sure to get the proper insurance. Business liability and error & omission insurance are quite necessary in many professions. And do not overlook property and business interruption insurance which will take care of lost revenues in case of natural disaster or other events that cause you to vacate the property.
- Above all else, surround yourself with positive people who will support you and your ideas!
This list is by no means complete, and in my estimation can never be considered complete. There are just too many things that need consideration, and everything varies by experience level and industry.
Every industry will have its own learning curve.
Every individual will have their own strengths and weaknesses.
Every market will have different needs.
Remember, this is just a guide. You need to do your own research and planning to get your new business off on the right foot from the beginning.