A guideline to avoid common business start up mistakes
The main challenge to starting a small business is often thought to be lack of money. That is no longer the case if a person has a good product or service and follows a few guidelines.
A guideline or system will produce a viable business with a fantastic opportunity to make very good money.
In fact, lack of experience and knowledge of how to start a small business is more often the challenge than lack of money. The internet has leveled the playing field to starting a small business and with the right knowledge success is attainable with little start up cost.
This article is an overview of the process of how to start a small business from scratch spending less than $500 and going on to earn unlimited income.
This Is Not A Get Rich Quick Article
The airways, internet and speaking platforms are full of get rich quick platforms and ways to snatch money from the unsuspecting.
Most of the get rich quick gurus are the only ones that get rich by selling hyped products and information that promise to give riches with little effort if their particular system is purchased and followed, yet they seldom deliver on the promise.
This is not that type of article. I have worked over 30 years as an attorney, entrepreneur, and investor and believe me I have tried a number of the promises made for quick riches. None of them work.
I've lost my share of money chasing dreams and the next shiny object.
What I’ve found that does work is taking the time to learn what to do and then applying that knowledge to a given situation and things then fell into place. What I am sharing with you is some of the experience I’ve learned the hard way.
I have helped numerous persons learn how to start a small business with little money.
Hopefully something in this article will help you, the reader, along the way to ultimate success and then I hope you will simply pay it forward.
Let's Get Started: How To Start A Small Business Begins With Mindset
The very first thing required in starting a small business is to have the right mindset. Without it the business is doomed already.
The person starting the business must be determined to stay with the process and see it to fruition. A business is like a jealous woman or man in a relationship. It demands focus and attention at all times, especially in the beginning.
It cannot be approached as a hobby. A hobby is something you do in your spare time and it's never really taken that seriously. It's done "when I get around to it." That won't work with a business.
That isn't to say you must abandoned everything in your life. Of course not, that would not be wise. It does mean you must get rid of excess baggage and find time to work on your business on a daily basis and put in some serious time to taking care of it.
If you do it will soon return the favor and take care of you.
Next Step: Provide a Product Or Service That Already Has Demand
How to start a small business begins with answering this question. What is the product or service you will offer for sale and does it have a large enough demand for the business to become profitable and sustain a successful operation?
If the answer to the question is no it becomes very clear that the business should not be started in the first place.
Just because you may like the product or service and be totally sold on it does not mean there is a market or demand for it. It’s not about you, it’s about who you will try to sell your product or service to. If they don’t want it and there is no demand for it the business is over before it gets started.
HOW TO TEST MARKET DEMAND FOR YOUR PRODUCT OR SERVICE
Finding if there is enough demand for what you will offer for sale is not a difficult process. However, it does require work. Remember, I said the business is jealous. It demands attention from the beginning of the relationship, and it will become even more demanding before it starts to earn the income you likely want.
I once heard a story about someone who wanted to open a new hamburger stand and asked for advice on how to determine if it would be successful. The person consulted asked the prospective business owner this question.
“What do you think is the most important thing you need to have to make your hamburger stand successful?” The reply was “I need to make sure I have the best hamburger over my competitors.” The consultant’s response was “No, you need to make sure you have a starving crowd.”
You see a starving crowd will seek out the hamburger even if it’s not necessarily the best hamburger. It’s the fact that they are hungry and looking for something to eat that is most important.
A business's product or service must seek and find a market that is hungry for what is being offered. If the product or service satisfies that hunger, they will buy, buy, and buy.
The first thing to do is to find your product or service offer’s hungry market.
There are tools that help do just that. They help you research your market and identify the hungry crowd.
THE TOOLS TO FIND YOUR TARGET MARKET
Human beings are constantly seeking products or services to do one of two things. Either to solve a problem they have or give them a pleasurable experience they can enjoy. A business's objective must always be to provide show the prospect or customer how the offered product solves the problem they have or leads to a pleasurable experience they ultimately want.
Your research should focus on these two points. Solving a current problem should be the focus. Once you find a market that your product or service solves a significant problem for your chances of success are greatly increased.
People use the internet to search for what they want. They use Google and other search engines to find what they are looking for by typing into the search box phrases they use to look for what they want. These phrases are called “keywords.”
When the keywords are typed into the search browser it goes out into the internet and searches for websites and information that match the search phrase. If your product or service matches the search phrase then the browser directs that purpose to your website, page or link. Your product or service is then matched to what the searcher is looking for.
If enough other people are also looking for the same or similar product the search engine will populate the number of searchers looking for the product or service that solves the problem or gives the desired pleasurable experience. This becomes your product or services market and provides you with the information to determine if there is enough demand for what you are offering.
There are several tools that can be used to research and determine the market for a product or service. Some are free and some are a paid service. The free tools to determine your target market are good enough. Here are some free ones:
Google Trends
Google Trends – Google Trends can be used to determine the current market trends and demands as well as the past periods of time that a market may have been trending for a type of product or service. You can go back five years to determine what has happened or limit it to the last 12 months
It will also suggest some keyword phrases that may be helpful to determine the market demand for what is being offered.
Google Keyword Planner
Google Keyword Planner – This tool is excellent for finding out how many people per month are searching for a product or service. It also provides other alternative words and phrases that someone might use that are like what your product or service is. Google planner will also suggest other possible words that match up to the product or service and give a readout of the number of persons looking for it over the past 30 days. It is a good gauge of how much demand there might be for the product or service.
If you don’t already have a Google Keyword Planner account, you will need to create one in order to use this tool. The sign up is simple and quick and it is free to use.
Ubersuggest.io – This is a powerful free market research tool created by Neil Patel, one of the best digital marketers in the world, in my opinion. He spent thousands of dollars to develop this tool and refined it into an all-inclusive product research and marketing tool.
This tool can provide the researcher with knowledge of the amount of demand for a product or service and it can also identify the competitors that are already selling the same or similar product or service.
In addition, it gives suggested keywords that can be used to further research and find the size of any market for what is being offered for sale.
These tools should be enough to get enough information to find out if there is a true market for what you have to offer. There are several other tools that can do the same thing but the three mentioned here should be more than adequate to get the job done.
Make Sure The Business Is Set Up Properly
Once a determination is made that there is enough market demand for what is being offered efforts should be made to make sure the business is properly set up. This part should not be ignored.
Depending on the type of business structure the business owner wants (sole proprietor; limited liability company (LLC) or corporation, for instance, there is a need to set the business up properly.
If the business will be operated only by one person using their given name, set up is very simple. A bank account should be opened apart from any personal accounts. If desired, business cards may be created for approximately $25. If the business is operated from home a designated spot within the residence can be declared the office and set up.
A personal cell phone number can be used as well. Using a cell phone, a phone service company can assign a specific number for use in advertising and promoting the business and forwarded directly to a cell phone. It can be set up such that when it rings the assigned number shows up on the cell phone and the cell phone user can identify that that is a call that should be answered. It can also be sent to a voice mail for follow up later.
A business license is often required by the local city government for small businesses operating within its boundaries. These usually cost very little on an annual basis and are generally less than $75 per year.
The business can also be set up to operate under a separate name that stands by itself. If the business structure is not a corporation or limited liability company and operated as a sole proprietorship or partnership it can create a fictitious business name.
A fictitious business name is a name chosen by the business owners that will be used for business purposes. For example, Joan Jones wants to start a bakery shop but does not want to operate as Joan Jones’ Bakery. She could instead create the name Cornerstone Bakery, which is a fictitious name under which she will operate the business.
Joan would go to the county government office of the County or City Clerk and research to see if the name Cornerstone Bakery is being used by anyone else within the county. If not, then Cornerstone Bakery would be available for Joan to use as her business name.
She would fill out a fictitious business name application and pay the required fee. Generally, this will be less than $100. She will also be required to publish the new name within a local newspaper for notice purposes for a defined period which is usually about 21 days.
The purpose of this is to notify the general public that a new company called Cornerstone Bakery will be operating within that county. If no notice is received by anyone already using that name or something very similar, then Joan can commence operations under that name for a specified period. The time period usually is five years.
Joan should next contact the Internal Revenue Service (IRS) and get a federal identification number for Cornerstone Bakery. This can all be done online and completed within 15 minutes or less.
Using the fictitious business certificate and the IRS federal identification number, Joan can open a business banking account and start operating her business under Cornerstone Bakery.
Get Legal and Accounting Help In The Beginning
One of the biggest mistakes most small businesses make in starting a business is the failure to seek legal and accounting advice in the beginning. Legal and accounting services are key parts of business development.
The usual reason for the lack of getting this crucial advice is because the business owner thinks it will be too costly and often, they feel since they are so small, they don’t need these two services to start.
This is faulty thinking. Having a business lawyer and accountant look at the startup business plan should be high on the list. This can avoid legal issues and other problems like failure to file proper tax filings, overlooking tax deductions and having good financial records to help make solid decisions about money matters.
There are ways to have a business lawyer and accountant help a new business start with these services without laying out a lot of money.
Free help can be obtained from the Small Business Administration’s (SBA) programs designed to help business startups. One such program is the SBA SCORE program. SCORE stands for Service Core of Retired Executives. This is a volunteer group of retired executives that volunteer their time to help small businesses for free.
There are also nonprofit programs designed to help small businesses with business loans and accounting help for free. One nonprofit program that does this nationwide is Accion. This nonprofit provides several services for free to assist new and established small businesses.
Some nonprofits also have arrangements with local business lawyers who volunteer to provide free legal services to small businesses for initial consultations and help with basic legal questions. A google search will reveal the local agencies that provide these services.
These helpful sources are very helpful and can ease the burden of learning how to start a small business.
Make Marketing a High Priority
Now that a market has been defined with enough demand for the business product or service and the business has been properly set up, how to market and advertise the business should be a major next step.
Marketing is everything a business does that puts its product or service in front of the identified target market in the most favorable and attractive light.
It should highlight the value of the product or service and should focus on what’s in it for the persons interested in the product or service.
Marketing should be benefit-driven from the end user’s standpoint. How does the product or service solve the problem or provide the desired pleasurable experience that the end-user is looking for?
Done properly and consistently, marketing will attract prospects to convert them into customers and delight them with products and services, so they return again and again and buy more. They will also tell others about the business.
Create a Marketing System
Effective marketing is using a combination of useful marketing tools. Used in a combination the tools will produce consistent results. The key is to be persistent and follow a process and give it time to produce results.
Every business should have the following basic marketing tools in place and use them on a consistent basis.
- An effective website
- A social media strategy
- Lead generation
- A method that converts leads into customers
- Follow-up sequences
- A measurement system to determine the strengths and weaknesses
There is not enough time or space in this article to go into detail about each of the above. However, they are the basics of any effective marketing system and time and effort should be spent to build each one of them as a part of a business startups marketing plan.
Our firm provides these components as part of our business development services. Contact us for more information. A free consultation is available.
Become An Authority
People like to feel comfortable with the business or person they are dealing with in business. Becoming an authority on what your product or service offers to the business's target market is a good way to brand the business name and to create a comfort level when buying from the business or recommending to someone else.
One of the best ways to become an authority is to create a book, an eBook, or a newsletter about what you sell. Distribute this information on a consistent basis to the target market. Make sure the information is high quality and solves a problem the target audience is facing.
The idea is not to become the best seller of a book or best newsletter. The idea is to create the perception and reality in the mind of the target market that you or your business are the authority when it comes to what you are selling.
Use this information at every opportunity you have. If it’s a book make sure you have copies to give to persons within the target market at every opportunity such as meetups, chamber of commerce events, tradeshows, speaking opportunities, etc.
If its an eBook or newsletter send it out in email updates or allow them to be downloaded from your website.
Creating a book, eBook or newsletter does not cost much. The most cost associated with this method of marketing and branding a business is the time spent in creating the authority document. This is time well spent and will provide an excellent return on the time invested.
I created course material on how to start a small business and distribute it wherever it is appropriate. It has help brand and market what I do. It also helps create an authority brand. Use the concept as part of your marketing plan.
Don't Get Overwhelmed
Starting and operating a business is a large and time-consuming responsibility if done right. It’s easy to become overwhelmed and become discouraged and to just quit or move on to the next shiny object that pops up.
This is the reason many small businesses close shop and never get to the level they had envisioned when starting.
Learning how to start a new small business will bring with it its share of things that will creep in and make you feel overwhelmed. However, there are ways to deal with it. How to overcome the feeling of being overwhelmed is a system just like the marketing system suggested in this article.
Sometimes you will have to step back and look at things and make serious decisions about what is important and prioritize. There may be things that simply need to be stopped.
There may be a need to outsource something that is better done by someone else rather than you.
The crucial thing to understand and decide is to follow the process set up from the beginning. Make changes where appropriate and continue the journey. Systematize in order to optimize.
Every day get up and keep up with practicing what works and discarding what doesn’t. The practice is preparation! You perform how you practice. Don’t expect to change your performance outcomes without changing your practice.
I hope this article on how to start a small business has been helpful to you. If you would like to have assistance in starting up your business and want a FREE consultation. Contact us.
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