Starting a small business is a dream shared by many. However, it can also be a nightmare at times. It is said that entrepreneurs work 80 hours a week to avoid working 40 hours a week. Anyone with that bold, entrepreneurial spirit is no doubt nodding to themselves right now as if to say “yup, that’s right.”
Make no mistake, starting a small business is equal parts rewarding and daunting. The truth is, there isn’t “one way” to go about doing things. Often, starting a business is a learning and growth process marked by a series of both victories and setbacks.
Finding your way as a small business owner is a process. However, here are a few tips to help point you in the right direction.
Learn Why Small Businesses Fail
Just as there is no one way to start a business, there isn’t one reason why they fail either. The truth is, starting a business is difficult and not all of them will make it. However, this should not discourage you. If you learn the most common reasons for failing, you’ll be better equipped to plan for, and avoid them.
According to Investopedia, common reasons include:
- A lack of funding
- A lack of understanding the market
- Poor planning
Despite Nike’s popular slogan, there’s more to starting a business than “just doing it.” Simply put, businesses that fail to plan, plan to fail.
Which brings us to….
Create a Business Plan
Whether you’re a freshly crowned MBA or a stay-at-home parent starting a small business in your garage, business plans are essential. A common mistake that many first-time founders make is skipping the business plan process. Don’t.
Writing a business plan helps coordinate and organize your thoughts. It forces you to put your business into words, including what you’re going to do, how you’re going to make money, and what you need to do to get there.
Just as there’s no “one way” to run a business, there is no “one way” to write a business plan. However, make sure you include these important pieces of information:
- Define your mission statement
- Establish roles and responsibilities within the business.
- Define your product/service
- Define your goals. What does “success” look like in your business?
There are hundreds of business plan templates you can find online to follow. The important thing is to do the work. Don’t worry if if you feel as though it is not long or detailed enough. You may always review your business plan later and expand on it if need be. In fact, many owners revisit their business plan regularly to make revisions, check their progress, or make sure they are sticking to their strategy.
An NFL coach doesn’t go into a game on Sunday without a playbook. Your business plan is your playbook.
Embrace Online Marketing
The marketing world is alive and well in the online space. What’s more, it’s the perfect place to promote a small business. Particularly, social media helps to equalizes the playing field between your business and larger competitors.
Video marketing is a great way to get the best out of your online presence. From online advertisements to product demonstration videos; the power of video is on the rise. In fact, 82% of businesses consider using video a key part of their marketing strategy.
Marketing is one of the areas where much of your energy will be spent, especially in the early days. Jump on the online marketing train early and ABM: Always Be Marketing.
Seek Professional Help
No, not that kind of help. Although starting a business can be stressful! We mean the legal and financial kind. Believe it or not, there are miles of regulations, legal filings, tax forms, and financial requirements associated with starting a small business. Will you need a license of some kind? What type of insurance are you required to have? Are you required to collect and report sales tax?
Skipping over these important details can cause massive problems later on. The last thing you want to do is launch a business, gain some traction, and then find out you owe thousands in unpaid fees or failed to secure the proper license for your business type.
Spend a little extra time and money to consult with professionals and do things the right way. Don’t just assume you’ll figure it out as you go. If you want to start your small business off on the right foot, the first step (pun intended) is making sure you’re doing things the right way.
Don’t Sell. Solve
An oft-repeated phrase in the small business world is this: “businesses solve problems.” While it sounds cliché, it’s also very true. Rather than approach your business as “what can I sell?” Consider what problem you’re solving and why customers should choose your solution.
All businesses solve problems of one kind or another. Coca-Cola solves a thirst problem, Toyota solves a transportation problem. Toyota believes their Prius solves a transportation problem in a way that is safe, cost-effective, and energy efficient.
Lest you think that “real businesses don’t actually think this way,” ask yourself this question. Why then, does every car advertisement talk about fuel efficiency, miles per gallon, safety ratings, and customer satisfaction ratings from JD Power & Associates? Especially since none of us actually knows who JD Power & Associates is?
The reason is that, believe it or not, it’s not all about the price. If it was, every advertisement would say “buy ours because it’s cheaper than the other one.” When a car company markets their solution, they’re telling you why it’s better than the other one. Is it safer, more efficient? More reliable?
Determine what problem you’re solving, how you’re solving it better, and why people should care. Bonus points if you get JD Power & Associates to give you their seal of approval. (They’re a global market research company and have been conducting automobile research surveys since the late 60’s and early 70’s).
Find a Mentor. Absorb Knowledge
As an entrepreneur, you’ll find yourself wearing many hats. Marketer. Salesperson. Business owner. Accountant. The list goes on. The first thing you should realize is that you probably don’t know everything you need to know and that’s okay.
The second thing you should realize is that there are others who do know this and are willing to help. Whether you know a successful CEO who you can take out to lunch every now and then, or you join a local entrepreneur group in your area, there is a wealth of knowledge out there for you to absorb.
Find someone whose advice you trust and who also isn’t afraid to tell you what you need to hear. It will be a valuable resource to lean on.
Keep On Truckin’
Starting a business can be as exciting as it is nerve-wracking. While there is no one right way to go about things, the tips above can help put you on the right track. Above all, a successful business owner is always ready, willing, and eager to learn.
Embrace new ideas, stay up to date on trends or new technologies and be willing to go that extra step to bring it all together.
Now go out there and build your business!