Starting your own business can be rewarding, and if the stars align, profitable – but it is not something to be undertaken lightly or on the spur of the moment.
Table of Contents
Do A Self-Check
A business owner absolutely must be a self-starter, a decision-maker, and a sacrificial lamb. Are you all of these things? Be honest. Are you willing to double the hours you work? Are you willing to make the tough calls and deal with the consequences when there’s no good answer? Are you okay with paying your creditors and employees first when it means you may not take home a paycheck that month?
Do you have enough savings to not only start the business but also to pay your bills for up to a year (at least six months)? Will your spouse resent the extra burden of maintaining the home, family, and income while you toil away at launching your business? These are vital questions – poor planning causes businesses – and marriages – to fail before any kind of stability is achieved.
Know Your Talents
Most people start a business based on something they happen to be good at – but make sure you’re really, really good. Good enough, in fact, that people will pay you for what you do. Your mom may love your cupcakes, but how will they go over with total strangers who are paying $4.00 each for them? Whatever it is you do, make sure you do it perfectly.
Your talent doesn’t have to be tangible, either. There is an entire class of entrepreneurs whose talent is starting businesses. Some specialize in a general field, but others take all comers – these people are very good at spotting trends and people with the talent to bring them to market. Once the business is solvent, they sell it for a nice profit and move on to the next project.
Look for the Money
Once you decide what you’re good at, figure out a way to make money from it. Building toothpick houses may be fun, and you may be the best toothpick carpenter around – but the demand for toothpick cabins is low. Perhaps you could apply your skills to general model making and market yourself to architects and designers, who pay top dollar for 3D representations of their designs.
Musicians are a dime a dozen, but very few make a living wage by playing music, so many give lessons. The market for great moms likely only extends to your kids – try opening a daycare to spread your skills around.
Look for a way to present your talent that will make people think they cannot live without it.
Do Your Homework
You’ve identified your talent and your product, now you must make sure it’s feasible where you are. Say you want to open a small business, but a quick Internet search shows that there are already a dozen of small businesses in town – you are almost surrounded by a lot of competition from established businesses that are so similar and easily kill the struggling start-ups.
Do another Internet search – are there any good steakhouses? Seafood restaurants? What about bakeries? By shifting your focus slightly to one side, you’ve drastically reduced your competition and increased your chance of success.
As an entrepreneur, your homework also includes learning business law in your state, county, and city. Find out what licenses and permits you need, what zoning laws apply to you, what inspections and certifications are required, and the time frame for getting all these things together.
Once all this is finished, congratulations – you’ve taken your very first step in learning how to open a business. Now go find a building, design stationery and a website, write employee handbooks and job descriptions, create your business plan, find financing, hash out an advertising budget… and get to work.