It’s a great time to be a small business owner. With more consumers longing for that personal touch that’s lacking in mass-produced items, and the Internet paving the way for online sales that can reach around the world, there’s never been a better time to consider opening your own business.
You may have heard the amazing stories about young entrepreneurs setting their own hours, working from home, and breaking out of the 9 to 5 routine that left them feeling depressed and miserable. But be cautious. Owning your own business can open these doors for you as well, but there’s going to be some pitfalls along the way. We’ll explore some of these in the following paragraphs, to help get your business off on the right foot.
Identify That Differentiates You
All too often, people start their own business with a great product or idea they have, without going any further. While these are the core of any business, you can’t just open a store and pray that people will find you. Instead, you have to identify both what sets your business apart from others, and who you want to buy from you.
For example: let’s say you’ve decided to sell a shovel that you invented to make gardening exceptionally easier. When you market your shovel, what are you going to say about it? What makes your shovel better than the $5 cheapies? These are the types of things you have to understand, or you’ll be just another shovel on the shelf.
The same thing goes for your consumers: if your shovel costs more, even if it is indeed the best shovel in the world, many people will be hesitant to buy from you. You can either market in such a way that you convince these buyers that your shovel is worth the cost, or ignore them altogether.
Prepare Your Finances
The fact is that many new small businesses often operate at a loss, at first. It makes sense – when you first open, no one really knows who you are, or what you really do. Even if you’ve created a lot of hype, in the grand scheme of things, you’re an unknown, and it can take a while to find your footing.
Make sure your finances are prepared for this. You need enough emergency funding saved, so that you can pay your bills, both business and personal, to sustain you until you can start to generate a profit.
Tally up the amount you think you’ll need, and give yourself about 10% extra for emergencies when you apply for your business loan. It’s also critical that you check your credit score beforehand, and get it as high as you possibly can, so you’ll enjoy better terms and interest rates for your business loan.
Prepare a Comprehensive Business Plan
One of the most frustrating issues that employees deal with is when their boss can’t make a decision. For the small businesses, this often stems from the fact that there isn’t a solid business plan that outlines how the business will react to different stimulations.
When you prepare your business plan, you can’t just account for when things go right – you have to have contingencies in place for when things go wrong. What will you do when your ideal customers don’t respond to your marketing pitches? If you end up needing to cut costs to stay in business, where will those cuts come from? These are all things you need to think about beforehand and prepare a plan for.
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