Starting a Small Business, Right Way to Proceed
When starting a small business, there is a right way to proceed. Below are seven basic things to consider, and become expert at, that should help you not only to get off to a great start, but cause your small business to grow into a very rewarding endeavor. Please follow the link below any of the sections to give you a more detailed explanation.
I also include two sections on other, helpful resources for those opening a business. First, for an online business…Skip McGrath’s website, Auction Seller’s Resource, is rich in information and guidance, especially for starting an eBay business. Second, some suggestions on how to proceed if you find that your attempt at opening a small business is beginning to falter.
Small Business Idea
Starting a small business can be full of tough decisions. One of the toughest is choosing the best small business for you. I hope the following will help you make a good decision:
- Ideally, you should have expert knowledge of your business idea. If not, be willing to learn more and more about it, until you actually become an expert. This is very important, because the more you know about your small business idea, the more you will be able to sell it to others, and the more successful you will be.
- It should come from some activity in your life that you really enjoy doing, maybe from your favorite hobby or recreation. For example, if you enjoy fishing and live near an area where there are lots of great places to fish, you could start a small business online, advertising your fishing guide service, or sell new and used fishing equipment, or you could even do both.
- Your idea needs to be something that you are willing to work very hard for. Like most things in life, starting a small business requires time, determination, and hard work. If you are unwilling for this, you might as well forget about owning a small business. You would be better off to go look for a “lazy days of summer” government type job.
Start Off Small
Especially if you are a beginner, start off your quest for starting a small business very small. Every success story start small, then builds. Try selling products at garage sales, flea markets, or selling items or services on eBay. Some important reasons for starting very small are these:
First, your small business can start off very low budget, low cost, and low risk. But at the same time, you will gain experience and a “feel” for what having your own business is like. Rent a space at a flea market (“swap meet” in California) on a Saturday or Sunday and it’s like having your own open-air storefront.
Starting off small gives you a chance to make sure that the small business choice you have made is the right one for you without getting yourself into deep debt.
And, you can get a taste of success right away. This is especially true with garage sales where, if you have a good amount of “stuff” around the house, and you live in a locality with a fairly good population, you can do quite well, usually making a few hundred dollars each weekend.
Decide How You Will Finance Your
One of the most important questions when starting a small business is how to finance it all. My opinion is this: not with credit cards, not with a loan, not with home equity, or anything like that. There is a false assumption floating around that you have to take out a bank loan to finance a new business. That’s a very big and well established lie!
Actually, very few small businesses succeed that start out that way and it might be the main reason why so many small businesses fail within the first five years. If you take out a big loan to fund your small business start up, you just might end up losing your business, and in deep debt!
The key to survival when starting a small business is to start out small. Let the profits from the business itself cause the business to grow and drive it forward. But if it can’t survive on its own, why use credit with the banks to bolster it up?
Write an Initial Business Plan
Actually, I know some people without a business plan at all and they seem to be doing pretty good, but probably not as good as they could. Believe it or not, when I was young and tender and didn’t know better, my first small business in gardening and landscaping had no business plan for six years!
Although it can be done, I don’t recommend going without one. It’s critical that even the smallest small business should have some kind of planning document in order for it to experience its full potential.
When starting a small business, a business plan is extremely important for the following reasons:
- If you need to borrow money or apply for a government grant or a grant from a private organization, they will definitaly require a well written, professional business plan.
- It serves as a brainstorming tool and helps greatly to keep your business organized, growing, and heading in the right direction.
- It can also serve as a valuable part of your record keeping.
Establish a Business Identity
Obtain Business Permits
Obtaining a small business license is one of the first things you do when first starting a small business. Actually, there are about five or six legal actions (or pieces of paperwork) that you need to accomplish to properly establish your business identity with the government. Without them the federal, state, and local governments may not regard your business as legitimate. Similar procedures are required in other countries too. For most states in America, the main business permit requirements are:
- Obtain a business license at your local city hall.
- Register for state tax and get a state sales tax ID number; register your business name.
- Register for federal income tax and obtain a federal ID number.
All this may seem like a big hassle to you, but is necessary, the permits are not expensive or hard to obtain, and having them could avoid difficulties for you in the future. For example, without a business license you may have problems taking deductions on state and federal tax for small business expenses. After you obtain your business permits, your ready to Go!
Get the Word Out!
Small Business Advertising
Traffic through your small business, whether it be a “brick and mortar” type business, an Internet business, or what ever, is your business’s life-blood. Without very substantial traffic, you have no business, and it’s the key to your small business start up success.
So what is the secret to getting great traffic? First of all, of course, you have to have a great product in high demand. Then, become an expert at advertising your business! The following suggestions are some of the best ways, tried and true ways, that I have learned over the years to attract big traffic to my small businesses.
Some are not at all new or surprising but they have worked for me and many others, if you have a good product that is in demand, they should work for you too!
- Make business cards, pass them out to friends, relatives, whoever! Having business cards is a real must. With business cards and your enthusiasm to distribute them, your small business venture can get off to a great start.
- Many news and magazine publications cater to small business. In the 1970s, when starting a small business in landscaping, I began advertising in a small, local Orange County California publication called the Super-Saver. Within two weeks I had all the business I could handle.
- The very popular Craigslist.org offers free advertising!
- The Web advertising service, Google AdWords can be very effective. There are other, similar online advertising services as well.
Decide How You Will do Your Small
Small business accounting and bookkeeping is necessary but can get quite complicated. For most small businesses, however, the bookkeeping process can be kept to a simplified format while still meeting all needs of the business and what is required by law. It’s my opinion, that, especially for solo entrepreneurs and beginners starting a small business, record keeping should be kept as simple and less time consuming as possible.
For larger businesses with many employees, a more complete bookkeeping and accounting program may be necessary. If you are one of these, you can go to school and learn it really good. But you may want to just learn on your own. There are usually many books at your local library on the subject or you can purchase one online at eBay.com or Amazon.com, with no problem, and probably very cheap.
Would you like to save maximum time learning a simple bookkeeping system at very little cost? You can pick up a copy of Dome Simplified Monthly Bookkeeping Record, written by a certified accountant. Try it, it’s as easy as you can get and claims to meet all state and federal law record keeping requirements for those starting a small business.
Skip McGrath’s Auction
If you sell or are planning to sell things on eBay or your own website, Skip McGrath’s website Auction Sellers Resource, is an excellent place to explore for all kinds of valuable information for beginners starting a small business, including starting a small business online, how to start your own eBay business, what sells well on eBay, other eBay selling tips, small business advice, and finding wholesale companies that are selling genuine wholesale merchandise.
Something You Can do if Your
Business Begins to Falter
There are many things that can cause a small business to falter and eventually fail, but I’ll mention here two of the main ones. The first is too many expenses; the second is insufficient advertising.
Not to long ago, Google changed it’s famous (or infamous, to some) algorithm, causing many good websites as well as the targeted bad ones to suffer and decrease in their lifeblood of traffic. Actually, I’m not really sure if it was the algorithm adjustment by Google that caused traffic on my affiliate website also, to start going down. The decrease in traffic could have just been a coincidence in timing, what ever, my site was losing considerable traffic.
My search engine optimization program was not enough to sustain the traffic increase that I was used to. Slowly but surely, my website’s traffic was deteriorating and I began to panic! However, I didn’t panic to the point that I froze or was in despair. I began to brainstorm the situation I was in. What I decided on was this:
A few months earlier Google had offered me a good chunk of free advertising using their ad program called Google Adwords. I decided to use it. At first, I didn’t know how to use Adwords efficiently, but it did bring much welcomed traffic to my site immediately. When I saw the new traffic coming in, it was like a breath of fresh air and relieved the stress.
The more I studied the Adwords Help pages, the more efficiently I was able to use it, and the more traffic came in per dollar spent. I still use Adwords, but now in conjunction with another Google program called Google Adsense and I’m profiting from the exchange. I’ll have much more to say in the future on how to use these Google programs, so stay tuned! They are really good programs if used correctly and can help make your small business a success.
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