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!

Read The Entire Series

Leave a Comment