You have worked hard for someone else for 10 years. In recent years, you have felt like you’ve been more responsible for your employer’s success than anyone else in the company. You earn a decent salary, but the profits go to the company’s owners.
You are convinced that you have the skills to manage the company that you work for, but it’s a family business. The odds that you will ever run or own the company are very slim. You’re an ambitious person so the solution to your predicament is obvious — start your own business.
Leaving the virtual office of the business you are currently working for to launch your own business is an extremely appealing choice, particularly because you sincerely believe that you will be far more professionally and financially successful when you’re in charge. Here’s the truth though — millions of people like yourself have started a business that failed.
How can you succeed where others failed? There are many things you can do to maximize your chances of success. Here are 10 tips for starting a business:
1. Seek The Advice Of Experts:
Talking to people who succeeded and failed can give you a better insight on the unexpected obstacles that you might encounter, but are unprepared for. You should seek out entrepreneurs, particularly entrepreneurs in your industry. If you want to start a cleaning business, for example, you should consult entrepreneurs who own cleaning businesses. Hopefully, you already know entrepreneurs in your industry. You certainly should if you’ve been a success in your industry.
You can also seek out strangers who are very willing to help you. Many people who worked for SCORE, a nonprofit association that has been “dedicated to helping small businesses get off the ground” for more than 50 years,” helped me. SCORE, which used to be known as the Service Corps of Retired Executives, has chapters all over the USA. The Small Business Administration (SBA) also has staffers all over the USA that might be willing to help you. You can also call local colleges, which often have small business development centers.
2. Think About Your Personnel:
You will never succeed on your own. NEVER. Just like your employer needed someone with your skills to succeed, your business will need people with the right skills to succeed. If you want to maximize your chances of success, you will hire people whose work you are familiar with. These should be people with specific skills who work in your new company’s industry.
As you plan your business, you should be thinking about who can manage employees, who can make sales, who can do other specific and important tasks, and whether there is a realistic chance that you can persuade these people to work for you. You really don’t want to rely on placing jobs ads and hiring strangers for important roles in your company.
3. Think About Your Prospective Clients:
You know the industry. Who are your clients going to be? You should know if your current employer is having problems getting clients and why. Can you get some of those clients?
You shouldn’t start a business unless you’re confident about getting enough clients to succeed. In fact, you should reach tentative agreements with clients before you launch your business. “You can’t start marketing too soon,” small business expert Susan Ward writes in the article “Top 10 Tips for Starting a Business That Will Succeed.”
4. Conduct A Market Survey:
Spending money before your business opens its door sounds scary. In fact, though, it can be a wise investment — and could improve the chances a bank will loan you money.
You think that you know the industry, but there might be a market niche you’re unaware of. If you’re in the cleaning industry, for example, you might not know that the market for cleaning offices is saturated, but most small restaurants or most small grocery stores in a growing suburban area need cleaning services. A market survey can save you a lot of money by directing you to the right prospective clients and ensuring that you don’t spend too much time and money pursuing the wrong ones.
5. Prepare To Be Flexible:
You know that you have to formulate a business plan if you want to persuade a bank, or someone else, that you deserve a loan. You also know that you should formulate a business plan even if you are self-financing your business because the process helps you make spending and investment decisions.
It’s unlikely, though, that your projections will be accurate. You need to formulate backup plans and be prepared to make changes to your business plan if your sales, revenues, and/or profits are lower — or higher — than expected. You also need to be ready to make quick decisions on subjects that aren’t mentioned in your business plan. For example, you might have an opportunity to sell the cleaning products that you use in your business although your original business plan consisted only of selling cleaning services and not products.
6. Consider Alternative Financing:
Only about 25 percent of the funding needed by startup businesses comes from bank loans and credit cards, reports the Entrepreneur magazine article “Funding Options for Bad Credit Risks.”
Many entrepreneurs self-fund, but there are many other options. The SBA has several programs for small business owners who can’t qualify for a traditional bank loan. Its programs include a program that enables entrepreneurs to get microloans — loans of small amounts of money to people who have a bad credit history and/or financial problems — from nonprofit organizations. Tens of millions of people get microloans annually. The Entrepreneur article lists websites that are credible sources of microloans.
7. Don’t Undercharge:
Frankly, this tip wasn’t even on my list of 20 possible tips until I decided to research the advice of experts online. In so doing, I came across this CNBC article entitled “Starting a business? Here are three important tips.”
The writer, investment adviser Bijan Golkar, said that many people who leave large companies to start a business often don’t think about a wide variety of costs that are not pertinent to full-time employees. He cited the self-employment tax and health insurance. Thus, he said, entrepreneurs don’t earn enough revenue to cover their unexpected costs. He said that one solution is higher prices. That sounds like an unconventional bit of advice, but smart entrepreneurs can certainly provide quality products and services that justify the higher prices.
8. Pay Attention To Legal Issues:
You might think that you’re in effect running your employer’s business right now because your skills bring in clients, revenues and profits, but you’re not. You know that when you start a business it is YOU who has to raise the money needed to start the business and keep it running effectively. However, did you think about the relationships that your employer has forged with the municipality the business is in and as well as the state?
Businesses have to comply with many laws. Unfortunately, entrepreneurs often neglect these issues. You need to find out what the municipality’s laws are in regards to business permits, zoning regulations, and other matters before you launch your business. Failing to comply with local and state laws at the outset can cost more money than if you made sure you researched these issues before starting the business. Hiring an attorney might be a wise investment.
9. Pay Attention To Tax Issues:
You need to figure out, for instance, whether the people who will work for you will be full-time employees, part-time employees, or independent contractors. How much taxes the people who work for you pay is contingent on your decision. You need, though, to make sure that their tasks and responsibilities match how you classify them under the law.
Again, you will save money if you figure out all these issues before launching your business. You do not want to have to pay fines because you broke the law.
10. Pay Attention To Your Family:
Entrepreneurs often have to work longer hours than employees of companies, particularly just after they launch their startup companies. You need to prepare your family for your longer work hours and simultaneously make a commitment to spend a higher percentage of your free time with them.
In other words, you might have to make a huge time sacrifice in order for your business to succeed — and that sacrifice should not come at the expense of your family. Perhaps, you need to watch less television. Perhaps, you need to spend less time at the gym. Perhaps, well you get the point. You need to make the decisions on what you will sacrifice before you launch your business.