3 Tips for Starting a Small Business

by Jason on June 21, 2010

Small Business Start Up Advice

Starting a small business is no simple task.

A great number of people have been in the same situation as you, frustrated with their job, ready to take orders from only themselves, and filled with the ‘perfect’ idea for starting a small business.

However, without knowledge of how to actually start a small business and what it takes to manage one successfully, many of them fail.

Failure in a small business is often not because the idea was bad.  Rather, great ideas fail simply because the execution of that idea was poor.

This is largely to blame for the eager entrepreneur jumping the gun and starting a small business before he or she did the right research.

Adequate research will tell you whether or not your small business idea has the potential for success.

Unfortunately, many small business owners make some big mistakes, but well managed businesses have a few things in common.

Let’s take a look at some small business advice worth considering for starting a small business:

Location, Location, Location

The first piece of small business advice a new owner needs to consider is location.

For instance, let’s say you want to open a knitting shop. There may not be very many shops in your area solely dedicated to knitting, but you happen to know that there are a lot of people interested in the craft.

You can’t simply open a storefront and wait for the customers to appear. You first have to choose the right location for your small business.

You will have to scout many options and decide which ones would actually draw a significant amount of traffic.

You’ll have to ask yourself if a specific location is easy to access and if there are other small businesses around that might attract the same type of customers.

But location is only the beginning of your small business management study.

Profit Margin

Next, you have to look at how much your location costs and how much you can really make selling knitting supplies.

In other words you need to look at your profit margin.

As the business owner you will have to pay yourself and your staff. You will have to buys supplies to stock your store and decor to make it look nice.  There will be insurance and licensing you will be required to purchase.

In addition you will have to pay rent and utilities at your location. How much yarn, per day would you have to sell to make enough money to meet all of those expenses and still make a living and save for your goals?

You might find that starting a small business is not such a great idea after all.

Advice from Other Successful Business Owners

But, if you think that you can make enough money to pay your expenses and make a decent living,  the next step is to talk to people experienced in your line of work.

While you might not want to go to your direct and local competitor you can probably find another small business owner in a non-competing area who is willing to give you advice.

Just make sure they have a similar type of small business – someone else with a craft store is a far better mentor then someone who owns a pizza parlor.

Do not be afraid to ask questions.

Find out about their struggles, their mistakes, and the things they wish they had known before starting their small business.

The value of other peoples experiences cannot be underestimated in life or in business management.

These steps are not intended to deter you from your dream of starting a small business or of business management.

They are intended to help you jump into starting a small business being prepared with good research and a great plan for making money and being happy at work.

Just as there are loads of small business failures there are also loads of people who had a good idea, did good research and came out ahead of the game.

Some went on to huge success – others just enough success and a huge amount of happiness.

Cashflow is the life blood of your business, for tips on how to manage your finances check out this handy guide from Hitachi Capital PLC. Enter the Inspired Cashflow SMB Competition and get access to funding for 12 months free of charge.

This article was written by William Eve, a regular personal finance writer.

Google+ Comments

Related Posts