Careers 101: Starting a small business
Careers 101: Starting a small business
You've dreamed of starting your own business for years, but you've never actually done it. Why not? Were you nervous about parting ways with the security of a steady paycheck? Did you fear failing? You've always worked hard, maybe even asking yourself why you worked that hard for someone else when you had a perfectly legitimate business idea that could work — if you only had the courage to do it. Trust me, you can do it, and it's not that difficult if you do your homework, ask lots of questions and listen.
About 10 years ago I lost my job. I had always said I would hate to go to my grave with my music still in me, and I knew I wanted to be an entrepreneur. So I became one.
I made more mistakes in the first month of my business than some people make in a lifetime. Many of those mistakes were because I did not listen to some very smart people who tried to help me. They had lots of good ideas, but of course I thought I was smarter than everyone else.
To avoid some of the mistakes I made, here are a few must-dos when starting a small business: 1) Interview several Certified Public Accountants (CPAs). Pick one who truly understands small businesses and the tax benefits associated with being a small-business owner. A CPA may also be able to help you decide on the appropriate legal entity for your business (S Corporation, LLC, Sole Proprietorship, etc.).
2) Choose a financial planner to help you put together a strategy that works for you. Make sure the planner looks at all areas of your financial situation and helps you put together a plan tailored to your needs.
3) Figure out where you are getting your financing. If you are not going to borrow money, then how much of your own cash are you willing to spend? How deep in debt are you willing to go to make this business work? Have you secured lines of credit before going into business?
4) Determine the cost of health insurance. Health insurance is the most expensive aspect of going into business for yourself. Many small businesses have one or more employees that must be covered while other businesses technically do not have employees; they instead use subcontractors to whom they do not legally have to provide insurance. A business insurance broker is a good source to use to get an idea of the options that are out there.
5) Consider other types of insurance you may need. Liability insurance and errors and omissions insurance, for example, are designed to protect you and your business in the event your company is sued.
6) Pick a trustworthy, small-business-friendly bank. What special services does the bank provide that you could help your business? Does it meet your business' specific needs?
7) Figure out what to charge for your product or service. You need to determine if you are going to charge a set price, an hourly rate, a daily rate or a per-project rate. Check out sites such as Salary.com or Payscale.com to help determine what the ballpark pay range is for the type of work you do. Use that as a baseline. Then check with your local Small Business Development Center and your CPA, and research what businesses similar to yours charge for their services.
The business planAfter all this work, you still need a business plan. Even if you aren't borrowing any money, a business plan can provide you with a road map to keep you on track financially. According to http://www.Entrepreneur.com, a business plan contains the following elements:• Executive summary • Business description • Market strategies • Competitive analysis • Design and development plan • Operations and management plan • Financial components
The importance of marketingAs an old sales and marketing person, I firmly believe that if you don't do a good job of marketing your new business, you won't be around for the long haul. Even though marketing is a component of the business plan, I often talk about it separately because it is so important to the overall strategy and the success (or failure) of your business. At least 30 percent of your time should be devoted to marketing. You may be fortunate enough to have enough business come your way through word of mouth, but that's the exception, not the rule.
The Chamber of Commerce is a good place to begin networking and finding marketing resources. Public speaking or writing are also good ways to get your name out there and market your business. Just about every industry has a trade publication that will allow you to submit articles for publication. Blogs, podcasts and newsletters are also inexpensive and effective ways to market.
Although it may sound daunting, think about how satisfying it would be to be your own boss and control your own destiny. It's not easy, but it can done if you put a lot of work and forethought into your business plan, surround yourself with good people, ask 1,001 questions and execute your game plan with confidence.
Tim Dix is a career coach, motivational speaker and owner of Global Resources Ltd. in Greensboro. He has an international sales, marketing and training background. He can be reached at 644-0937 or tdix@mindspring.com.
Tim Dix is a career coach, motivational speaker and owner of Glo
Resources to get you started
Small Business Administration (SBA)
Small Business Development Center (SBDC)
Chamber of Commerce
