Starting A Business? Do It Right From The Start

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.

how-to-start-business
When considering your new business venture, make sure to do it the right way from the start.

 

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 spread the word (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.

  • Greg

    I think out of all of the list, doing research on the industry you plan to go into is the most important. It will form your strategy from there as far as who to network with, how, where and to who to market and so on. Hopefully, that will mitigate the frustration and prevent any major issues when launching.

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      Understanding all of the aspects of a particular industry is definitely a vital part of the process, Greg. I’ve heard from a few people who were surprised after launching at the things they just didn’t know before getting involved in a particular area.

  • http://retireby40.org/ Joe

    Great tips! I think surrounding yourself with positive like minded people is a great idea. Starting business is hard enough and you don’t want to deal with too much negativity. Of course, those positive people must be very competent also…

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      You said it Joe, it’s hard enough without all of the crap that other may bring to the table. Unfortunately, some people are in such a rush they don’t consider some of the “little things” and some are so “knowledgeable” they don’t even consider the advice of others. Heck, I’m sure there are probably 100 more pointers that could be added to the list that I just didn’t think of!

  • Paul @ The Frugal Toad

    Barriers to entry like capital and expertise make it difficult to start a business. Partnerships allow you to raise capital and obtain expertise to run your business. SCORE is another great resource for small business start-ups!

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      That’s a great point, Paul! SCORE, chambers of commerce, local universities–they all have very valuable resources available to budding entrepreneurs. And, it’s not all that difficult to find there days either.

  • Little House

    Depending on what kind of business a person starts, it’s not impossible if the person if financially prepared. For example, running a pool cleaning service, at home design job, or something that only takes one to three people is possible. I think it gets tricky when the business begins to expand. When is the right time to hire more people? Will the business have enough work for all the overhead? What happens if the work tanks – will you lay off your employees or just go to contracting them? There’s a lot to think about.

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      There certainly are a large number of things to consider during the start-up process. I think sometimes people tend to equate size of the business and/or niche with being easy to start and run successfully. Even if you are financially prepared, there are a large number of missteps that can lead to failure (or even financial ruin in the case of not having the right licensing & insurance).

  • http://www.financialramblings.com/ Michael @ Financial Ramblings

    I couldn’t agree more on not quitting the day job. In fact, it might even be possible to build a going concern and engineer a profitable exit, all while maintaining the day job (unless, of course, your goal is to get out of your job).

  • OneCent AtATime

    In a nutshell, to start a business you must do most of the stuff yourself. Its important to have family along your side as they are the ones most likely going to suffer most, just because the lack of you.

    Any kind of business takes huge amount of time to get on its foot.

  • http://www.miiockm.com/ Miiockm

    A clear business plan would be my number one.

  • Tortoise Banker

    I disagree on not worrying about sales and just being profitable. I think the new entrepreneur’s motto should be “get out there and SELL!”

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      Let me ask you what the point of business is if not to make a profit? If you don’t worry about keeping margins higher, overhead lower, etc then all you are doing is hoping that sales volume will be enough to overcome other deficiencies. Understanding the big picture will make the business more profitable, which should in turn enable other things such as expansion more possible.