Terry Kyle
Fri 25th Jul 2008, 12:14
How To Start Your Own Small Business
So you want to start your own small business BUT don’t want to lose your shirt or blouse if it all screws up?
Cool. Makes sense.
So, apart from deciding to go for it, aim to apply these principles in choosing your business and you stand a very good chance of making it:
1. The small business can be operated from HOME (i.e. no giant additional rental overheads).
2. The business does NOT require a large inventory of product (another financially crippling overhead) i.e. it is service-based rather than product-based, at least to begin with.
3. The business has SEVERAL income streams (e.g. service as well as sales - look at hair salons selling high-markup products AND hair care).
4. The business involves a product/service that buyers pay for IMMEDIATELY and not on a 30-day/60-day/90-day/120-day basis (late payment of accounts has sent countless small AND large businesses to the bottom of the river without a scuba tank).
5. The business relates to your EXISTING skills/expertise (or it’s something you are prepared to develop your knowledge in very quickly) so avoid offering neurosurgery in your neighbourhood unless you spent the last 10 years cutting open people’s heads in a hospital.
6. The business has a considerable/total CASH-IN-HAND sales element.
7. The business still earns income when the owner is away (e.g. vending machines) - not necessarily vital but pretty nice.
8. The business is not too reliant on finding good staff (finding and keeping quality staff is one of the biggest issues for all small business operators).
9. The business is not based on too small a number of clients (e.g. an advertising agency with only 1 client) - this gives the client the power and not the business!
10. The business appeals to human NEEDS that demand constant fulfilment rather than occasional wants (the food retail business is far more bankable than many other service businesses e.g. people have to eat but they don’t NEED to have their tarot cards read - mind you a tarot card reading service is very cheap to set up and actually a pretty good small business model).
11. The small business has a clear point of difference from possible competitors e.g. it is faster; it is open after hours when others are closed; it comes to the client’s home; it caters to a specialized niche such as the disabled or gay or senior market; it is much simpler than existing competitors; it is in the best possible location; or it is much cheaper than obvious competitors.
Without such a characteristic, a small business will probably struggle.
12. The business is one that the owner clearly ENJOYS or has some natural affinity with e.g. a car enthusiast importing and selling used Jaguars from Britain - the new XK rocks!
Good luck and keep me posted on your small business journey!
So you want to start your own small business BUT don’t want to lose your shirt or blouse if it all screws up?
Cool. Makes sense.
So, apart from deciding to go for it, aim to apply these principles in choosing your business and you stand a very good chance of making it:
1. The small business can be operated from HOME (i.e. no giant additional rental overheads).
2. The business does NOT require a large inventory of product (another financially crippling overhead) i.e. it is service-based rather than product-based, at least to begin with.
3. The business has SEVERAL income streams (e.g. service as well as sales - look at hair salons selling high-markup products AND hair care).
4. The business involves a product/service that buyers pay for IMMEDIATELY and not on a 30-day/60-day/90-day/120-day basis (late payment of accounts has sent countless small AND large businesses to the bottom of the river without a scuba tank).
5. The business relates to your EXISTING skills/expertise (or it’s something you are prepared to develop your knowledge in very quickly) so avoid offering neurosurgery in your neighbourhood unless you spent the last 10 years cutting open people’s heads in a hospital.
6. The business has a considerable/total CASH-IN-HAND sales element.
7. The business still earns income when the owner is away (e.g. vending machines) - not necessarily vital but pretty nice.
8. The business is not too reliant on finding good staff (finding and keeping quality staff is one of the biggest issues for all small business operators).
9. The business is not based on too small a number of clients (e.g. an advertising agency with only 1 client) - this gives the client the power and not the business!
10. The business appeals to human NEEDS that demand constant fulfilment rather than occasional wants (the food retail business is far more bankable than many other service businesses e.g. people have to eat but they don’t NEED to have their tarot cards read - mind you a tarot card reading service is very cheap to set up and actually a pretty good small business model).
11. The small business has a clear point of difference from possible competitors e.g. it is faster; it is open after hours when others are closed; it comes to the client’s home; it caters to a specialized niche such as the disabled or gay or senior market; it is much simpler than existing competitors; it is in the best possible location; or it is much cheaper than obvious competitors.
Without such a characteristic, a small business will probably struggle.
12. The business is one that the owner clearly ENJOYS or has some natural affinity with e.g. a car enthusiast importing and selling used Jaguars from Britain - the new XK rocks!
Good luck and keep me posted on your small business journey!