Starting a Business All-In-One For Dummies Cheat Sheet
Starting and running your own business can be one of the greatest joys in life. It can also be the hardest thing you ever do. The fact that no one is going to be standing over your shoulder telling you what to do can be simultaneously exhilarating and frightening. Finding sources of inspiration can keep you going in the absence of that voice over your shoulder. Nailing down a handful of basic, fundamental practices can keep you on the right track. And getting a grip on the money constantly flowing in and out of your business is one of the big keys to success.
9 Sources of Inspiration for Starting a Business
Maybe you’ve been talking about your great business idea for a long time now. You know you can do it — so what’s stopping you? Or maybe you started taking steps toward making your idea a reality, but something came up and you just haven’t gotten around to committing yourself. The following suggestions can help you get some traction on your idea. They can also serve to inspire you and spur you on in your business endeavors.
Start reading about great new businesses
Business magazines featuring entrepreneurs and small business owners are among the most popular on the newsstands. If you want to inspire yourself with the possibilities, check some of these titles:
Join a community business organization
Almost every community has an organization where you can meet and talk with other business owners. If you get involved, you’ll have no trouble finding people who offer encouragement to take the next step in starting your business. You’ll also find people who can help you take that step.
One highly respected community organization is Rotary International, a humanitarian group of businesspeople who dedicate themselves to improving their communities and providing scholarships and other benefits. The advantage of Rotary is that wherever you travel in the world, you are likely to find a local chapter. To become a member of Rotary, you need to be nominated by a current member.
If you don’t know anyone who is a member, start by joining your local Chamber of Commerce and the various trade organizations for your industry. Chances are you’ll find a Rotarian in one of these organizations as well. Rotary membership is a great way to start feeling comfortable about wanting to become a business owner.
Hang around a university business school
Nowhere will you find a larger hotbed of entrepreneurial activity and new business startups than at a university, particularly in its business school. That’s because most colleges and universities now have courses in entrepreneurship. Talk to the faculty in these programs about finding a student or students to help you do a feasibility study or business plan.
Getting some energetic, motivated students on your team is one way to jump-start your business venture. You can also inquire about seminars and courses in such things as feasibility analysis, business plan writing, and technology commercialization, to name a few. Schools often offer these opportunities through their extension programs to people from the community who are not registered students. The exciting environment alone is enough to get you enthusiastic about sharing in the excitement of starting a business.
Tell a friend
If you announce to a friend that you intend to start a business, that friend will ask how it’s going every time you meet. The need to report progress should be enough to motivate you to make at least some headway. Nothing is better than to have a friend keep nagging you about your great idea — that’s what friends are for!
Leave your job (or get laid off)
Leaving your job is a pretty radical step, but some folks can never quite get up the courage to start the businesses they’ve been dreaming about without having a cataclysmic event push them into doing it. One of the big reasons the 1980s is called the Decade of Entrepreneurship is that so many people were laid off because of downsizing by big corporations.
Some of the suddenly unemployed even started new companies to compete with their old workplaces. Leaving a good job is a major decision that must not be taken lightly, and it needs to be considered only after you’ve done your homework on the business concept you want to execute. You can do all the feasibility work for your new business while you’re still at your job and not leave until you’re ready to devote full attention to the new business.
Discover an industry
Immerse yourself in an industry and find out everything you can about it. Talk to all types of business owners, suppliers, distributors, and industry experts. Become the expert on your industry and soon you’ll find the opportunity that’s right for you. Because you’ve made important contacts in the industry and understand how the industry works, your knowledge will motivate you to give your new business a shot.
Spend time with someone who has already started a business
What better way to inspire yourself to start a business than to spend time with someone who has done just that? Spend a day with an entrepreneur or business owner you admire — perhaps someone in your favorite industry. Shadow that person, observing what he or she does on a day-to-day basis. Entrepreneurs love to talk with fellow entrepreneurs, especially budding entrepreneurs. Your chosen person can give you personal advice based on his or her experience on how to get started, what pitfalls to look out for, and how to balance your personal and business lives.
Besides, business owners are great cheerleaders, and yours may say just the right thing to motivate you to start your new life. If you join a community organization, chances are you’ll have the opportunity to meet several entrepreneurs at various events. One of them just may be the perfect one to shadow.
Find a mentor
When you’re starting a business for the first time, it’s wonderful to have someone you can turn to when you need advice, when you’re frustrated or discouraged, or when you want to share a small win. Mentors come in all shapes and sizes, but the best mentors are ones who believe in you and can be honest with you, who introduce you to important people you need to meet, and who pick you up when you fall down.
A mentor may be someone who has had a successful business in the industry in which you’re interested or someone whom you admire regardless of whether he or she happens to have experience in the same area as you. That’s why it’s so important to network, get out there and meet new people, because you never know when you’ll meet your mentor, the person who ultimately starts you on your way.
Do something — anything
Leap into your opportunity with both feet and start doing something that makes your business happen. File for your DBA (“doing business as”) or your incorporation papers with a business name. Set up your home office to accommodate the new business until it’s ready to move to a more formal site (or like many entrepreneurs today, keep your business at home and operate it virtually over the Internet). Get your domain address for the web. Have some business cards made up. It doesn’t take much to start building a critical mass of activities so that, before you know it, you feel like you’re honestly in business.
6 Tips for Success in Starting a Business
Although no one can guarantee that your business will be a success, if you work hard, price your products and/or services right, and keep your customers satisfied, you stand a good chance of building a successful company. The results you get out of your business are a direct result of the work you put into it. The most successful owners — those who get the results they hoped for — share many of the following traits.
Do what you love
To do what you love, you first have to know what kind of work you really want to do. This discovery requires deep introspection and an understanding of which kinds of work get your creative juices flowing and which kinds dry them up. Doing what you love also sometimes requires that you ignore what other people want you to do for a living. You may decide, for example, that you’d really like to start a photography studio, but your spouse or best friend may think something more practical, such as buying a successful pet store in the local mall, makes more sense.
Ultimately, you must decide what you really want to do for a living. It’s your dream — you’re the one who gets to choose it (and live it!). No one else has the right to tell you what kind of work you should love — and do.
Treat your business like a business
If you want your business to be a real business — an organization that generates the kind of money that will allow you to become financially independent — you have to treat it like one, and not like a hobby or a momentary fling:
If you’re starting at home, set aside an entire room in your home — not just a closet or a shelf — exclusively for your business.
Make a serious investment in business equipment and supplies: a decent computer, a fast Internet connection, and whatever else is required to effectively and efficiently run your operation.
Create a marketing plan and follow through with it.
Publicize your company’s products and services to a wide audience of potential customers and clients.
Build a strong customer base and make plans for future growth.
Being serious about your business doesn’t mean you can’t have fun, or that you can’t make up your own rules along the way. Indeed, being your own boss means that you get to decide how you’re going to run your business. If you want to work only on weekday afternoons, for example — setting aside mornings for exercise or spending time with your kids — you can do so and still have a serious business.
Become an expert
People naturally respect those who know more than they do. By specializing in a particular area of expertise — whether it’s where to dig a new water well, how to scrapbook, or what to do in a financial crisis — you assume the role of a presumed expert, even if you’ve just started your business. It makes good business sense for your clients to hire an expert instead of someone less experienced. By avoiding the mistakes and dead ends that someone with less experience may make, you can help your clients spend less money by hiring you, even if your hourly rates are higher.
The interesting thing about becoming an expert is that the passage of time makes you increasingly more experienced in your field. As time goes on, potential clients and customers will seek you out just to get the benefit of the expertise you’ve developed through education and experience.
Don’t be shy
Companies don’t spend millions of dollars advertising their products in the media for no reason; they do so because media advertising is a particularly effective way to get the attention (and, ideally, the business) of potential customers. The world is chock-full of good ideas that have gone nowhere fast. Even the best ideas have to be packaged, presented, and sold. The key is to identify and use marketing methods best suited to both your personality and your business.
Although you may never have had to sell yourself or your products before, you can’t avoid doing so when you own your own business. After you generate momentum and build a strong customer base, then you can rely more on referrals from your happy clients to do the marketing for you. But when you’re getting your business off the ground, consider and attempt every possible method for getting the word out about your products and services.
Build a solid customer base
One of the most important ways to establish a successful business is to build a solid base of customers who stick with you through thick and thin. This solid customer base becomes the foundation on which you grow your business. Of course, building a solid customer base is much easier said than done. At the heart of the process is creating an organization that values its current customers and goes out of its way to ensure their satisfaction and happiness.
Customers are smart — they can tell whether they’re high or low on a company’s priority list. If they sense that you don’t care much about whether or not they do business with you, they’ll likely jump ship as soon as another company that really does care about them comes along.
Ask for referrals
The word-of-mouth referral is probably the least expensive and the most effective way of getting new business — for any business. That makes referrals the most important way for businesses to market themselves. Here are some of the best ways to earn great referrals from customers:
Do great work.
When you do great work, your clients are happy to give you great referrals. When you do less-than-great work, you’ll be lucky to get a kick in the pants, much less a referral.
Do your work on time and within budget.
If you consistently deliver on your promises, you’ll soon have more business than you ever thought possible. And you’ll earn your clients’ referrals at the same time.
Keep your clients well informed.
When clients spend their money on you, they want to be kept apprised of your progress, not only to stay in touch with the project, but also to keep a watchful eye out for problems before they get out of hand. Whether the news is good or bad, your clients and customers appreciate forthrightness and candor.
Always keep your word — even when it hurts. If you promise to do something, do everything in your power to keep your promise, no matter what it takes.
Customers and clients appreciate vendors who are flexible and willing to meet their needs — and they often pay more for it. Think about what you can do in your business to better meet your customers’ needs, and then do it.
Thank your clients for their referrals.
Everyone likes to be appreciated for what they do. Your customers are no different. Thank them for their referrals with a hand-signed card or small gift.
Many small businesses get the vast majority of their new business through referrals. They really are worth their weight in gold!
You and Your Startup Business’s Money
Of course, you want your business to make money. Duh! That shouldn’t be the only reason you’re starting a business, but it’s certainly a big one. You spend money on your business, your customers pay you money, money goes out for this, money comes in for that . . . one glance at your books should remind you that the sheer money aspect of running a business can get complicated.
You have to stay on top of it, or it will climb on top of you and stress you out. Keeping three pieces of advice in mind can help focus your mind when to comes to handling the money for your business.
Charge what you’re worth
No matter how hard you work, if you charge your customers less than you’re worth, you won’t be able to stay in business for long. Why would you charge less than you’re worth? Well, some people do so because they don’t realize exactly how much they are worth. Others charge less than they’re worth because they’re embarrassed or afraid to ask for an amount that reflects their true worth. Whatever the reason, if you don’t get paid what you’re worth, you may very well drive yourself out of business.
If you don’t know what you’re worth, find out what other companies charge for similar products or services by researching catalogs, price lists, stores, and e-commerce and auction websites. If you can’t find written prices or listings on the web, call or email the companies for information. From there, develop a pricing or fee structure that will help you attain your personal goals.
After you figure out what you should charge, use the following tips to get the price you want:
Become a master at selling the value that your products and services offer to your customers and clients.
They won’t know why your products and services are better than others if you don’t tell them, so tell them often and in a variety of ways.
Be creative in how you’re paid.
Many successful business owners take cash out of the equation altogether by bartering their products or services with others.
Get past any hangups you have about charging your customers and clients what you’re worth.
Practice asking your price in front of a mirror or with someone you trust to give you constructive criticism, just as you would practice a request for a raise or a speech. After you go through the process a few times with prospective clients — and discover that they still want to hire you — you’ll find it easier to demand a price that reflects what you’re really worth.
Avoid unnecessary expenses
Shopping for the latest and greatest business gadgets and equipment is fun — a lot of fun. And treating clients to expensive lunches and dinners and driving that snazzy new company car are also fun. The bad news about all this fun is that it can be expensive (and some of it may not be tax-deductible) and detrimental to your company’s financial health and welfare.
Spend your company’s hard-earned money only when you have to. You can often get a lot more mileage out of stuff than your itchy spending urges would prefer. A good example of this is your personal computer. Every other week, computer technology makes another great leap forward, which may constantly tempt you to upgrade to the latest and greatest and fastest computer with all the latest bells and whistles. Unless your older, slower, and less flashy computer — and the software within it — is actually getting in the way of your ability to do business efficiently, stick with it for as long as you possibly can. Eventually, you’ll need to replace that old slug of a computer, but the longer you can defer the expense, the better for your company’s bottom line.
Do your best to hold the line on all the other expenses that simply drain your financial reserves while bringing in little or no additional revenue. If you’re going to eat out, for example, go to less expensive places. Save the expensive meals for your highest-paying customers. Or consider inviting your best customers over as dinner guests in your home.
Manage your cash flow
Cash, or the lack of it, is one of the key indicators of a company’s success over the long run. If you have cash, you can buy and stock new products for your customers, develop innovative new services for your clients, pay for your day-to-day operations, and expand your business. If you don’t have cash, your business will certainly suffer, and so will your customers and clients. You may even jeopardize your own personal or family financial situation.
Simply watching your cash flow — the money going in and out of your business — isn’t enough; you have to actively manage it. Managing your cash flow means looking to the future, planning and scheduling your projected cash inflows and outflows, billing quickly, staying on top of money owed you, and paying attention to the money that goes in and out of your business.