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SERIES: Start A Small Business 4

I am a HUGE fan of small businesses.  The ingenuity, creativity, and entrepreneurial spirit of small business owners makes them a favorite group of people to hang out with.

One thing I see in most small business owners is a passion for the work they do.  One thing I see lacking in most small business owners is knowledge of the "business-side" of doing business.  With this series, I will be teaching some principles that have helped me be successful in my small business.

Part Four  Become great at one thing.

When you are starting a small business, it is so tempting to try and be all things to all people.  I have rarely seen that work.  Become great at one thing.  Write your vision on paper and work on it until it is clear.

FOCUS is what works.  I have rarely seen SCATTERBRAIN work.

There is such a huge amount of work required to start a small business, it is important to ensure that you direct that focus to your core business.

What market will your business serve?  How will that market learn about your product/service?  How can you demonstrate to them that your service/product can help them?

A ton of businesses survive with mediocre products/services.  They barely survive.  If you want to stand out, be highly focused on becoming great at something.  We deal with so much mediocrity that great is unusual and stands out clearly to us.

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SERIES: Start A Small Business 3

I am a HUGE fan of small businesses.  The ingenuity, creativity, and entrepreneurial spirit of small business owners makes them a favorite group of people to hang out with.

One thing I see in most small business owners is a passion for the work they do.  One thing I see lacking in most small business owners is knowledge of the "business-side" of doing business.  With this series, I will be teaching some principles that have helped me be successful in my small business.

Part Three  Test The Waters

I have known a lot of people who have quit their job and launched a small business without ever testing the viability of their business model.  Now, there are some cases where it makes sense to jump full-bore into a new business, and that is when the individual has saved a significant amount of cash to cover the first year or two of start-up costs/salary.

BUT most people do not have the luxury of a pile of cash laying around such that they can just jump into a business that is profitable from day one.  In fact, jumping straight into a new business without any other means of income is a recipe for financial disaster.  It is a scenario played out over and over again.

This is why over 90% of small businesses fail within the first five years!  They neglect the fact that it takes time to build a successful and sustainable business and run out of cash.  Most businesses do not fail for lack of a good idea or marketable product.  Most fail due to a lack of cash.

If there is any way possible, test the waters.  Tinker with the product.  Trial the service.  Use a couple of evenings each week to work on it and improve it.  Use one day of each weekend to focus on it. 

Does it take sacrifice?  AB-SO-LUTE-LY!  But I have found that it allows me to test whether or not this interest is a passing fancy that is a cool hobby or whether it is a passion that I want to pursue full-time!

It also allows you to pay the bills with a regular job which allows you to reinvest any and all business income back into new products, materials, and marketing.  That will give you a competitive advantage over start-ups that are strapped for cash because they are having to pull full salaries from their revenue.

Test it.  It is worth it!

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SERIES: Start A Small Business 2

I am a HUGE fan of small businesses.  The ingenuity, creativity, and entrepreneurial spirit of small business owners makes them a favorite group of people to hang out with.

One thing I see in most small business owners is a passion for the work they do.  One thing I see lacking in most small business owners is knowledge of the “business-side” of doing business.  With this series, I will be teaching some principles that have helped me be successful in my small business.

Part Two – Obtain Legal Recognition/Organization

What type of business will you be?  There are a variety of legal business arrangements and each has its pros/cons depending upon the type of business in which you are participating.

You can be a sole proprietor, a partnership, an LLC, a non-profit organization, or a corporation.  Within each of these categories that are a variety of subsets of business.

It is important that you obtain wise counsel as to the best legal structure for your business.  It is worth a few hundred dollars to obtain legal/tax counsel on this subject.

For my small business, I have found that an LLC was the best structure.  As I start several more businesses, I am looking at additional LLCs, a partnership, and a corporation.  BUT the key here is that I am fully exploring the pros/cons of each

There is actually a terrific on-line resource that helps folks determine the best structure for their business and then helps them take the next steps!  It is called LegalZoom.

There are a ton of free educational resources available at their site as well.  Check it out!

The key in this step is to structure your business such that it maximizes its revenues and minimizes its tax burdens and liabilities.

I know that all of this legal incorporating stuff can be joy-robbing for a lot of small business owners, but it is so necessary for long-term business success.

I challenge you to take some time TODAY to learn about what the right business structure is for you and then take action!

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SERIES: Start A Small Business 1

I am a HUGE fan of small businesses.  The ingenuity, creativity, and entrepreneurial spirit of small business owners makes them a favorite group of people to hang out with.

One thing I see in most small business owners is a passion for the work they do.  One thing I see lacking in most small business owners is knowledge of the "business-side" of doing business.  With this series, I will be teaching some principles that have helped me be successful in my small business.

Part One – Have a business plan.

Ask yourself the following questions.  Take the time to truly understand them!

  • What is your vision for the business?
  • How will you make money?
  • Who are your competitors?
  • Who can you partner with?
  • What are your Strengths, Weaknesses, Opportunities, and Threats? (SWOT Analysis FORM)
  • How long will it take to turn a profit?
  • What are the start-up costs?
  • How much financing is needed? (Prefer ZERO!)
  • Is this a hobby or a passion?
  • Is your spouse on board with it?

Answer these questions and then take it to a small business owner who has successfully operated a small business for over twenty years.  Ask this person to review your plan.  Seek wisdom.  I promise you that this person will be able to help you immensely.  Do not be afraid to seek wisdom from several people.

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