10 Tips on Starting a Small Business
Join me (@lauraberginc) and a panel of small business experts for the #RBCSmallBiz chat, on October 22 at 9 pm, EST, on Twitter. Get answers to your most pressing questions about starting a small business. Canadian participants will also get a chance to win RBC Visa Gift Cards!
Starting a business can be a daunting endeavor but allow me to share some of the insight I’ve gained creating and growing My Smart Hands. When I started my company I had no prior business knowledge. I had never taken a business course in my life. I also didn’t come from an entrepreneurial background so I couldn’t ask my parents for advice. I was on my own, negotiating my way through the sometimes perilous road to success. Here are ten tips that I discovered (sometimes the hard way) along my journey to creating a hugely successful business:
1. Find your passion
This is the most important piece of advice I’m going to give you. It’s much more difficult working just to get rich. Starting a business is hard and it’s the love of what you are doing that is going to keep you going when things get tough. And things will get tough, you will have low moments along the way that will test your resolve. We all do. But if you love what you are doing, your passion will guide you to success.
2. Start planning your business while still employed
You don’t have to jump in head first without a net. There are a lot of things you can be planning and beginning to implement while you are still employed full time. This will relieve some of the stress related to creating a new company. When I made the decision to start my business I was still employed as a full-time teacher. During my down times, weekends and evenings, I mapped out my teaching manual and began creating marketing material, working on a website and writing a business plan. Get the ball rolling while still drawing a regular paycheck so you can hit the ground running on day one of your new career.
3. Set a date to transition from your old job into your new post as company president
There needs to be a time when you finally decide to pull the trigger. You should give yourself a date to leave the security or your day job and jump into your new exciting world as an entrepreneur. I was lucky because there was a natural time for me to quit my teaching job – at the end of the school year. For you there may not be an obvious transition date so you will need to pick one. Put it on the calendar and make it your first goal. I find I work well when I have deadlines.
4. Don’t be afraid to get a part-time job to help with cash flow
When I started my business, my slow start left me somewhat disillusioned. I had done so much prep work that I figured I’d post ads for my classes and hundreds of people would register for them. I was so wrong! My initial enrollment was ZERO! It was a rude awakening and I quickly figured out that this whole small businesses thing was going to be a bit harder than I thought. But I didn’t give up! Instead I got a part-time babysitting job to float my boat until I could get established. Here I was, a former teacher with a Masters of Education and I was babysitting. But it was not a failure, I was doing what I had to do to realize my dream. Keep your eyes on your goal and try to see your interim job as part of the process.
5. Write a business plan and talk to your bank representative
This is an important point and one that I wish I had done sooner. No one likes to write a business plan. It feels like a lot of work for little reward. However, if you need funding for your business you must have a business plan. But even if you aren’t looking for investment, it is a good way to map out what your goals are for your business. I suggest conceiving both a brief one year and a more formal five year plan. Business plans should be reviewed and revised yearly to see if you are still on track. This assessment will allow you to make modifications based on your experiences and success/failures. There are a lot of great plug-in business plan templates on the Internet. Simply Google it and find one that feels right for you.
It is helpful to have a business plan already written when you go into your bank to talk about funding options. Your bank’s small business representative can be an excellent resource in helping you figure out how to finance your start up.
6. Barter, barter, barter
In the beginning, you most likely will not have deep pockets to finance every aspect of your business. This is where bartering with other businesses may be helpful. When I started out, I enlisted a friend who was in school for web design. She happily designed my website for me to build her portfolio. I, in turn, babysat her son as payment for her work. Another friend designed marketing material for me in exchange for free Baby Signing classes. Barter is a very common way for entry-level entrepreneurs to get the materials and resources needed to start up their business. It’s a great way to save money. But a word of warning here: It’s important that everyone’s expectations regarding this trade of services are very clear. You might even consider drawing up a one-page agreement with the major points clearly laid out for everyone. Early in your new career it’s important to be building and not burning bridges.
7. Join entrepreneur groups
I cannot stress the value of this enough. Entrepreneur groups offer several benefits. Firstly, and most importantly it’s a great way to get advice and support as you grow your business. Secondly, it’s a place to go and vent about the hardships of running a business. Your friends who are working in an office may not be able to relate to the challenges you now face. But these groups can lend a therapeutic ear. And finally, they offer a sense of community. You feel less alone – there are others experiencing the ups and downs that you are facing. It can be both comforting and inspiring to hear other entrepreneurs talk about their successes and failures.
8. Go to small business conferences
This is one of my favorite parts of my job. It’s a great way to network and meet like-minded people. I always leave conferences amazed at the connections I was able to make. And these connections are often unexpected and unplanned. It’s also a great way to get information from other people who were where you are at one point. They may offer solutions and ideas that never even occurred to you.
There are things in life that we know we don’t know – I know I don’t know how to import goods directly from China but I know there are companies out there who I can hire to do this. Then there are things you don’t know you don’t know – I didn’t know that there were fulfillment centers in Buffalo for Canadians to ship product directly from the US. Because I didn’t know this even existed I would never have searched for it. It’s the things you don’t know you don’t know that make going to conferences worth it!
9. Take leaps and say yes to more things
My husband has a saying that I have adopted. If you do nothing, nothing happens. You can become paralyzed worrying about making a mistake. When you are starting out, yes should be a more important word than no. You may make mistakes but inaction, always saying no because you are afraid of potential bad consequences, will get you nowhere. Be bold, be brave, risk taking is in the DNA of every successful entrepreneur. The greatest hockey player of all time, Wayne Gretzky said, “I miss one hundred percent of the shots I DON’T take”. Opening the door when opportunity knocks leads to more opportunities. I’ve seen this in my business countless times.
10. Don’t give up!
Too many small businesses throw in the towel just before they see real success. Starting a business is difficult. You’ll hear that but you won’t really believe it or truly understand the meaning of it until you are ‘in it’. It’s hard! Trust me. But it is also the most rewarding thing you will do once you get over those first couple of hurdles and begin to see some success. Expect that the first year will be extremely challenging and during the first three years it may seem like the good days will never come. If you are lucky you may see success within the first year but many businesses take 1-3 years to fully establish themselves. This leads me back to my first point – be passionate about what you do – that will help you through the lean times and make your eventual success even more satisfying.
This post content is sponsored by Royal Bank of Canada, however the views and opinions expressed herein represent my own and not those of Royal Bank of Canada or any other party and do not constitute financial, legal or other advice.