According to Forbes, over half a million businesses open every month.
Do you think you have the creativity and drive to start one of them? The answer might be yes, but because only a third of those businesses will still be around in ten years, you need to be smart and strategic. Knowing a few key facts about yourself and your business before you get started will help your business to be one of the ones that’s still flying high decades from now.
1. You Need To Know Your Own Skills
This is more complicated than it sounds. In order to start a business, you need to take a hard and completely honest look at yourself, your interests, and your skills. Your business needs to be something you genuinely do well; if you want to start a bakery, you need to know that you really are good enough at baking for people to pay you for your mouthwatering confections. What’s more, you need to love baking enough that you’ll still be happy to be baking every day ten years from now, because if your business survives ten years, you will be.
Furthermore, you need to have skills that don’t even connect directly to your business’s product. If you want to be entirely self-employed, selling your products from home, you’ll still need to manage your accounts, advertising, and inventory yourself, or hire someone else who can. Take an honest look at whether you have access to those skills connected to running a small business.
2. The Time Has To Be Right
Even if you have the skill set you need to start your small business, you might not have the time to start it right now. Between attracting customers, building up inventory, hiring employees, finding a business space, and so on, starting up a small business is a tremendous amount of work and initial cash outlay.
If you’re at a point in your life where you can focus the majority of your attention on your business for two or three years and you can scrape together the money you need to get started, go for it.
If you have something that’s taking up a lot of your income and your time, for instance if you’re currently paying your kids’ way through college, or your spouse has been laid off and you don’t have a reliable source of income, or you’re caring for a sick family member – that’s okay.
Focus your time and money on yourself and your family. Your small business idea will still be there in a few months or years.
3. Talking To A Lawyer Could Save You Trouble
Unfortunately, there’s a chance that someone else has already invented your spectacular new product – and patented it. It could be that you weren’t the first person to come up with that great company name or logo, and it’s already been copyrighted. Talking to an intellectual property lawyer can help you to make sure that you aren’t infringing on anyone else’s trademark.
An IP lawyer isn’t the only professional you’ll want to consult. Small businesses can be a tax nightmare. Talking to an accountant can help you to understand the best ways to file your taxes, the things you need to keep track of in your own financial records to prepare for April 15, the difference between an employee and an independent contractor, and a hundred other headaches that you never had to worry about before starting a business.
4. A Business Plan Will Keep You From Being Overwhelmed
If reading about inventory and marketing doesn’t make you feel stressed and overwhelmed, the act of actually sitting down and figuring out your customer base, competition, and management structure probably will. That’s where your business plan comes in.
A business plan is a road map of your business that will help you remember its core identity as well as giving you an action plan to follow in order to grow your business. The U.S. Small Business Association has excellent resources on how to write your business plan, including the components that every business plan should have.
With your business plan in hand, you might still feel like you’re juggling a thousand balls, but you’ll at least know what all of them are.
5. You’ll Have To Ask For Money
A lot of people are uncomfortable asking for money. Unless you’re independently wealthy, you’ll have to get over that if you want to start your own business. Fortunately, it isn’t just about asking your family and friends for money, although that can help.
You can start by asking your bank for a small-business loan, which is impersonal enough to be an easy place to get used to the idea of asking. From there, look into local investors, crowdfunding sites, and venture capitalists.
Putting yourself out there and asking for money is hard, but it’s a necessary warm-up to selling your product to customers. If you can’t convince investors that your business is worth their money, how will you convince customers that your product is worth theirs? Thinking of it as your first sales pitch can make the funding process easier.
6. Your Office Space Is Important
Whether you’re planning on opening a store, restaurant, office, or workshop, your office space is going to be incredibly important to your business. If you’re just crafting items and selling them online, you might just have a dedicated workshop or office in your home, but you’ll need to keep it organized and free of items that distract you from your work.
If you’re actually going to bring customers or employees to your physical space, you’ll have to work harder to make sure that it fits your overall brand and aesthetic.
Compare the kitschy country feel of Cracker Barrel to the modern chrome of Chipotle; each setting communicates something about the business, just as your office space should. Moreover, the location is critical as well; you want to be somewhere accessible to customers, but not in such a crowded commercial space that you’re setting yourself up for failure (why set up your small craft store across the street from a Michael’s?).
7. Marketing Is Everything
You might have the best product in the world, but unless you can tell your potential customers about it, no one will know to seek it out and buy it. Identify your customer base and find creative ways to attract them, like eye-catching ads and enticing coupons that lure them in to buy extras. If you only hire a professional in one area, make it marketing unless you’re completely comfortable with your PR skills; if you don’t bring in customers, you’ll never have any profits for that tax lawyer to look at.
8. You’ll Learn From Mistakes
You will make mistakes, and that’s okay; just learn from them and try something new next time. Every entrepreneur learns through trial and error. No matter how many mistakes you make, you’ll mess up, and that experience will teach you something. Pick yourself up, dust yourself off, and try again. You won’t make that mistake again when you’re still in business ten years from now.