Top 10 Tips for Starting a Business
That Will Succeed
Business Start up Advice to Ensure Success…
1) Do what you love. You’re going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it’s really important that you truly deeply enjoy what you do, whether it be running fishing charters, creating pottery or providing financial advice.
2) Start your business while you’re still employed. How long can most people live without money? Not long. And it may be a long time before your new business actually makes any profits. Being employed while you’re starting your business means money in your pocket while you’re going through the business start up process.
3) Don’t do it alone. You NEED a support system while you’re starting a business (and afterwards). A family member or friend that you can bounce ideas off and who will listen sympathetically to the latest business start up crisis is invaluable.
4) Get clients or customers first. Don’t wait until you’ve officially started your business to line these up, because your business can’t survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can’t start marketing too soon.
5) Write a business plan. The main reason for doing a business plan first is that it can help you avoid sinking your time and money into starting a business that will NOT succeed. (See “Why You Need A Business Plan” for other good reasons.)
6) Do the research. You’ll do a lot of research working through a business plan, but that’s just a start. You need to become an expert on your industry, products and services, if you’re not already. Joining related industry or professional associations before you start your business is a great idea.
7) Get professional help. On the other hand, just because you run a small business, doesn’t mean you have to be an expert on everything. If you’re not an accountant or bookkeeper, hire one (or both). If you need to write up a contract, and you’re not a lawyer, hire one. You will waste more time and possibly money in the long run trying to do things yourself that you’re not qualified to do.
8) Get the money lined up. Save up if you have to. Approach potential investors and lenders. Figure out your financial fall-back plan. Don’t expect to start a business and then walk into a bank and get money. Traditional lenders don’t like new ideas and don’t like businesses without proven track records.
9) Be professional from the get-go. Everything about you and the way you do business needs to let people know that you are a professional running a serious business. That means getting all the accoutrements such as professional business cards, a business phone and a business email address, and treating people in a professional, courteous manner.
10) Get the legal and tax issues right the first time. It’s much more difficult and expensive to unsnarl a mess afterwards. Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers’ Compensation Insurance or deal with payroll taxes? How will the form of business you choose affect your income tax situation? Learn what your legal and tax responsibilities are before you start your business and operate accordingly.
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Finding the Real Opportunities
Business ideas are all around you...
They are lurking in your garage, in your basement, in your kitchen, and in your children’s room. You’ll find them in magazine ads, at your neighbor’s house, and at work. They are right there in the vegetables you brought in from the yard . . . in the stack of papers next to your laser printer . . . in the back of your truck . . . and at the back of your mind.
You don’t need to be a genius or an MBA to spot those ideas and turn them into profits, either. Identifying business opportunities is often as easy as identifying problems many people share and finding a way to solve them. When Matthew Osborne, an entrepreneur from Columbus, Ohio, wanted a way to make money, he found one right at his feet: dog dirt. Unlike most people who just gripe about stepping in it or having to clean it up, he started a business removing dog waste from homeowners’ yards. The business was an immediate success, and after several years, he sold the business for a quarter of a million dollars. Even then, however, he continued to make money from his idea by writing a booklet about how to start a pet waste removal business and selling the booklet on the Internet.
Other business owners have turned their hobbies, interests, and skills into satisfying and often lucrative businesses, simply by seeing a need in the world around them and finding a way to fill it. You can, too.
Do What You Love to Do
Businesses don’t just happen. They are made.
Whether you plan to profit by twisting balloons into smile-generating shapes or orchestrating the growth of multimillion-dollar, multinational companies, your success relies on what you bring to the business. If you love
what you do, your passion for the business will drive you to be knowledgeable, creative, and persistent. On the other hand, if your feeling for what you do is lukewarm, your success will be, too.
Turn Old Standbys into New Products
Truly new concepts are few and far between. Most new products or new business ideas are simply spin-offs of old ones. Inline skates is one good example. Essentially, they are ice skates on wheels or, depending on your point of view, streamlined roller-skates. Other new business ideas are nothing more than new ways of marketing mundane products. Take Dial-A-Mattress, for example. Furniture and bedding stores have always sold mattresses—but not by phone. Not until a furniture salesman by the name of Napoleon Barragan started a business selling mattresses over an 800-number phone line. The idea took hold, and today, Dial-A-Mattress sells some $70 million worth of mattresses each year.
You may not have the money, management ability, contacts, or desire to launch a major new product like inline skates or the energy or desire to build a multimillion-dollar sales organization. But you don’t have to launch anything that large to start a business or introduce a new product.
Years ago when my kids were little, I made money selling beanbags. The twist? I designed them in the shape of frogs and I filled them with birdseed instead of beans to make them pliable and less lumpy to the touch. To attract attention at craft shows, I displayed them in various human poses (sitting up, laying on their side resting their head on their hand, or hugging each other, for instance). I could produce them quickly and kept my costs low by making the frogs from inexpensive fabric remnants. That allowed me to price the frogs low enough to make them great impulse buys.
You can spin almost any skill or industry knowledge into marketable new products or services.
A neighbor turned his skill at fixing cars into a repair and tune-up service. His angle? He was mobile. Customers didn’t have to drop their car off at the shop. Instead, the “shop” (a van outfitted with tools and auto parts) came to them. Another acquaintance built a business by purchasing large quantities of chemicals and repackaging them in smaller quantities.
And several paper suppliers have created businesses by preprinting colorful brochure or flier designs on paper stock. The preprinted papers are then sold to businesses and individuals who use their laser printers to print out their own sales literature and fliers on an as-needed basis.
Look for Avalanches
Marketing avalanches, that is.
“Drag your products into the path of an avalanche and you’ll be swept along with it,” says Alan Kaufman. Kaufman was the executive vice president of sales for Cheyenne Software when it was a small, vertical market software company that had big ambitions.
Cheyenne’s owners had been keeping a close eye on trends in the computer industry in the late 1980s. They felt that Novell local area networks (LANs) were about to snowball and started developing enhancement products for Novell LANs. Within six years, the avalanche (combined with good products and heads-up management) turned their little company into a $127 million operation before it was sold to Computer Associates. Cheyenne was the 13th largest software company in the United States and employed nearly 700 people at the time of the sale.
Look for Mundane Moneymakers
You don’t need to create exciting new products or services to go into business, either. Millions of business owners profit by selling routine and sometimes unglamorous services such as window washing, car repair, sandwich making, building maintenance, house cleaning, and plumbing. The key to making money with the mundane is to sell something your customers can’t do, don’t want to do, don’t have the time to do, or can’t get done well elsewhere.
Spin off a More Lucrative Business
The business you start today may not be the business you run tomorrow. Entrepreneurs and self-employed individuals sometimes find that their
initial attempts to start a business don’t bring in the profits they had hoped for. Nevertheless, they often benefit by discovering new profit-making opportunities because of contacts or knowledge they pick up running their first business.
Las Vegas resident Beth Waite used to make $7 an hour as a self-employed dressmaker. Her customers often asked her for advice on choosing clothes, and she discovered that information available in books often was confusing and not really helpful. Because of her research, though, she heard of Beauty Control, an image consulting firm. After taking the company’s training course, she started an image consulting business, charging clients $50 an hour for her advice. She supplements the consulting income with profits from the sale of Beauty Control products.
