Thinking of Starting a Local Small Business?
Make Sure You Have What it Takes!
Listen to the Podcast Episode Below or Feel Free to Read Below:
Time to Look in the Mirror Before Starting a Local Small Business
Ok, so you have decided to start your own service business. You want to be a small business owner and more than likely, a local small business owner providing a service to the community. Before you jump in, it is time to ask yourself these 13 questions before you start your new business.
Depending on your background, you may have had some exposure to these 13 questions we are about to go over. Some of you may have little to no experience in regular business, never mind with a self-employed small business. Even if you have been part of corporate America or currently work in the industry you will be creating your small business in, life is very different on the other side. As we like to say, there is a big difference between working “in” your business vs working “on” your business.
Continue to read below or watch this video:
So please step back and ask yourself these questions:
1. Do you like People?
Sounds like a silly question. But it is quite simple actually. The reality is, some of you really don’t like working with the public. For most of you, if you do not enjoy working with the public then STOP here. Do not pass go, do not collect $200.
The reality is, if your new small business will have you dealing with other people, there will be no way you can get around dealing with the public. You may not need to love them but at a minimum you must love to help people solve their problems. It isn't enough to love what you do. Which takes us to #2…
2. Do you have thick skin?
You will need it! People get upset. Many times for good reasons and sometimes that is how they are wired. Your goal is to minimize the yelling or how long they remain upset. A wise person early in my customer service career told me that people are upset with the problem 9 times out of 10. The key is, can you keep your focus on resolving their issue so they will calm down and see you are trying to help? This will also help you increase your odds dramatically of keeping them as a customer/client.
You will also have critics. Some of these critics might even be your family and friends. You will make mistakes and you will get called out on those mistakes. You must remember that business is business and you can’t take criticism or feedback personally. You need to be a duck and let it roll off your back.
3. Do you embrace and believe in Great Customer Service?
I cannot stress this one enough on how critical this one will be to the success of your new small business, especially if it is a service business!!
You will be in the Service business and you will happen to do X, Y or Z. Without customers, you have no business. Take care of those customers, vendors, employees and you will have a profitable business for life!
This is different than the first question. You might not be a “people person” but still, be very customer service driven. I've known many people like this. They just believe strongly in getting and giving great service!
4. Are you willing to put in the time to do the research on your business?
If you think you can jump in with both feet and not hit the bottom of the pool you are being naive. You have a lot of homework to do before you even spend one penny on your business.
You need to spend some time with your best friend “Google” and start researching your new service business. What are the startup costs? What does your typical customer look like? What are their needs and how can you fill them? How much money can you make doing this? Is the business trending up or down? Does your community need someone like you doing this business? These are just a few of the questions you need to be asking yourself. Our two courses will help you with this phase since it is so critical! Plus we will provide a research workbook with them.
5. How well do you know your trade area?
While this one is part of question #4 it is important that you narrow down and know what your trade area is. If you plan on having a physical business, you will want to know where you plan to focus your attention and resources. Do you want to drive all over? Does it make financial sense to drive 20 miles? How about 50 miles or even 75 miles? Will you be focusing on your town or go outside the city limits?
Is there enough business? How many competitors are in your trade area? What do they do right? What do they do wrong? How will you compete?
6. Do you have a plan for living expenses while you get your business off the ground?
I don’t know about you but I like paying my bills and putting food on the table. I’ll assume you do too. Do you have a plan and the finances to get your business off the ground? If you think you can be profitable and make enough in 6 months, double it! Never count the money until you see it. If you do it in 6 months great! If not, you need a plan B.
Many small businesses disappear when the owner needs to seek out a “regular” job to makes ends meet. Life catches up and the dream dies.
Starting out part-time? This is actually a very smart idea! Just don’t “jump ship” until you are making enough in your small business to make that transition smooth or you have the funds for the next 6 months set aside.
7. Are you a self-starter?
This one can kill you. If you are like most folks, they have a boss and list of duties every day of what they need to accomplish. Many new entrepreneurs do not even realize how accustomed they are to a routine. Take away the routine and it is too easy to get distracted, head to the movies, play video games all day or hang out with your friends.
When you're an entrepreneur you need to have a plan every day. You must learn the difference between working “in” your business and “on” your business. Most of you will be good at “doing” the business but will rarely work “on” the business and this will lead to your eventual failure.
That dreaded “time management” will come into play. Not a big fan of calendars and lists? Well, you will need to at minimum learn how to time block your activities because you cannot confuse being busy with being productive.
8. Do you get distracted easily?
Listen, I think most entrepreneurs love shiny things. “Look a kitty….”
We love ideas, we love coming up with new ways to do stuff. Face it, we get distracted easily. A great idea pops into our heads and we are off to the races. If you know this about yourself then you will need to recognize when you are doing it so you can get back on track. Have friends, mentors, etc that can help keep you focused. You will want a plan each morning on what you will accomplish.
9. Do you have enough funds to get your business up and running?
This one is different than question #6 and it is important that you know the difference. You can’t dip into one for the other. That's right, you can't use the family food money to buy those supplies. The kids need to eat.
Do you need equipment? Do you need marketing funds? Do you need anything special to do the new business? As part of your research on your new business make sure you know the out of pocket costs for your first 6 months and you have the funds to keep your business going while you are in the early stages. Very few businesses come out the shoot making a profit from day one. Figure out what you need during the planning stages.
10. Are you prepared to work a lot of hours initially?
Whether you start your new service business part-time or dive in full time, you will work a lot of hours to get the business off the ground. More than likely you will be a one-person army in the early days and you will be in charge of marketing, merchandising, operations, physically doing the service, administrative duties plus even more! Whew…
Most new businesses do not have the funds to hire folks so be prepared to work your butt off! If you think you can do this in 5 – 6 hours a day you are wrong. However, if you are starting part-time, this might work, but keep in mind, you do have that 8 hours at the other job too. So yep, lots of hours in your future.
11. Will you need to hire employees?
Depending on the type of small business you open, you might need employees (for example a quick service restaurant, hair salon or dentist). If you fall into these types of service businesses make sure you do your research on the laws in your area or state for having employees. This is a critical step in the process. I do dive into this more in the advanced course and I’m sure we will have some future podcast episodes.
However, for most of you DO NOT hire any employees until your new business can support them. You must have a solid business plan on what the sales need to be and what your return on the investment will be. Yes, you need to view your people as investments, not just an expense!
12. Have you created a business a business plan?
Ok, so you have been doing your research. You have been saving your money. You know you will kick ass and you love people. Time to start!
SLOW DOWN TURBO!
We know you want to dive right in (remember, we talked about this back on question #4. But just because you’ve done the research, it doesn’t mean you are ready quite yet. Time for your business plan or as I like to call it, a Success BluePrint.
Your success blueprint or business plan is where you will map out your game plan for all the key areas of your business. Think of it was a roadmap to get you going in the right direction, a place to visit when all those great ideas start to disappear as you get knee deep in the day to day business.
A good business plan will be a fantastic reminder of where you are going and how you plan to get there. Plus, you can tweak it as you go. But do not undervalue its importance before you hit the ground running. We also go into the whole Business Plan vs Success Blueprint in our courses. Check out the blog post over at StartALocalSmallBusiness.com called: Why You Need a Success Blueprint vs a Business Plan
13. How is your business acumen?
The final question to ask yourself before you start your new service business (or any business) is an important one. So important it is really two questions in one.
A business can only survive if it is profitable. All the sales in the world mean nothing if you don’t keep any of it. Yes, even if you hate math, there is no way around being a numbers person. The good news is, you get to cheat. You can use a spreadsheet, an online tool, heck even scribbling on a notepad (although that is our least recommend way…lol)
You need to be able to learn about profit and loss statements, ledgers, sales plans, and a host of other key terms you will hear in the business world.
Don’t worry, we will dive into these areas more on the podcast in the future. So don’t forget to subscribe so you don’t miss them.
So, how did you do?
Did you realize you still have a few questions to get answered? Or maybe you have already started getting the business in motion and now need to step back on a few of these items to brush up?
No matter where you are in the planning stages (or execution) of your business, I’m are here to help navigate those waters. With over 30 years of leadership, business knowledge, merchandising, operational, training and development and human resources experience you will be in good hands. My brain is here for the picking. Which reminds me, I open up my brain each week over at the Local Small Business Coach podcast, so if you are wanting to see what is in store for you in the future, check that podcast out as well.
Meanwhile, you want to keep listening to this podcast and visiting the StartALocalSmallBusiness.com website and I promise to keep providing great articles, tools or resources to help you grow into an awesome business owner! And if you haven’t already, please sign up for our 7-part series for starting your local small business when you are on the website.
So, if you did great on the questions, and still plan on moving forward on this crazy new adventure, it will be one hell of a ride but worth it if done correctly!
Don’t worry, you will make mistakes and that is ok. It’s what you do, what you learn and how you grow that will determine your success!
Feel free to shoot me your questions at firstname.lastname@example.org and I’ll try and answer your questions. Who knows, your question could end up on either this podcast or on my Local Small Business Coach Podcast depending on when I get it.
By the way, don’t forget to subscribe to the podcast, so you don’t miss any of the future episodes and if you haven’t already, download all the previous episodes so you can catch up.