JT Spunk | Photography

So You Wannabe A Small online Business Owner?

Honest advice and practical suggestions for people who want to start a real world small business.
Owning a real world small business can easily be your ticket out of the work a day world. You’ll still be working, but for yourself! This can, all at once, be gratifying, frightening, annoying and rewarding. The result of all your efforts depends more on you, then anything else. Even in the planning stages, it’s you that will have to make all the tough decisions and live with the consequences once your small business is up and running. If you’re an unyielding perfectionist, don’t quit your day job. Starting a business takes a lot more then just attention to detail, it requires flexibility, patience, self motivation and discipline. If that’s you, let’s move on to the next step.
No matter where you live, buying, starting or planning a small business can be a big headache. Between the red tape created by tax laws and what seems like a never ending parade of forms and inspectors, the task can be daunting. And that’s just one small part of the process. Once you leap over all the financial and bureaucratic hurdles, there’s still that annoying little detail of actually being able to make a profit. Many small businesses fail because by the time the owner gets the shop or service up and running, they are already too financially, emotionally and physically exhausted to make it work. So what’s a future small business owner to do?
If you’ve already got an idea and want to try and make it work, look for the path of least resistance to your goal. Start small. Many small businesses are unsuccessful because the owner fails to test market their idea on a smaller scale. I know someone who began a telemarketing business in his home. He started with a small contract to raise money for a charity, one phone and the local phone book. As the money began to trickle in, he dedicated a room in his house to the project, bought a couple of folding tables and chairs and added some additional phone lines and employees. All the while he did a lot of research on the telemarketing business, finding out what equipment was needed, desired and affordable. When it was time to expand again, he rented inexpensive storefront space in a strip mall that was down on it’s luck. As his company grew, he took over two more adjacent storefronts, computerized the whole operation and had a number of contracts going at the same time. If you can’t keep your overhead low, you will never show a reasonable profit.
Nothing can knock the wind out of a person or family like the failure of a small business. That’s because many people try it the good old fashioned way. They max out their credit cards, take out another mortgage on the old homestead, borrow money from every friend or relative who ever owed them a favor and dump it all into what they are certain will be the next Starbucks. When things go bad from a starting point like that, there’s no place to go but down! Before you bet the farm on your dream, take a step back, examine your plan and consider the alternatives. Create a parachute for yourself. Don’t over borrow, keep a cash reserve to cover living expenses and personal bills for at least six months and pay off as many personal debts as possible before you start your business. If you’re already seriously in debt, it’s not a good time to start a business. A new business is unlikely to help you pay off large, existing debts. In many cases, it may temporary place you deeper in debt then you have ever been before. The type of small business you choose to open should be dictated by your present finances, not future situation or borrowing ability.
You walk past that cute little store in the mall and say, “I could do that!” But while you’re looking at all the great stuff in the window, did you take the time to notice whether or not there were any customers in the store? If so, were they buying anything? If you’re planning to buy an established small business, make sure it’s not a lemon. And even if it’s not, jumping into an industry you have no first hand knowledge of can be a big mistake. It’s possible that the shop owner has a customer following, connections and supply sources that are unique to them. It may be a family operation. If it takes three or four experienced people working together to keep a store profitable, there is no way you will be able to step into those shoes without taking a gigantic risk.
But what about Joe’s Burger Stand? I mean the guy seems to rake in the cash. And then there’s Betty’s Boutique. Her store always seems to be crowded. Aren’t these good bets? For Joe and Betty, they might be fine. But how much do you know about the burger or boutique business? If you have even the vaguest notion of trying your hand at an existing or brand new retail or food establishment, it’s going to cost you some money and that’s just the beginning! You’ll need the physical constitution of a horse, understanding friends or family and time to take the necessary management and food service certification courses at your local community college. A little knowledge may be dangerous, but none is deadly when it comes to the world of small business.
It might surprise you to learn that the most successful small businesses started by first time owners are not retail stores or food shops. They are lawn and landscape services, movers, cleaning or maid services, onsite windshield replacement, painting, household repair and come to you or neighborhood minor auto repairs. All these businesses have low overheads, most are not expensive franchises and many require substantially less initial investments then retail establishments. They also tend to skirt many of the inspections and licenses needed by storefronts. The success of a service related business depends on how much competition there is, the skill level of those offering the service and how much people are willing to pay for it. To make a long story short, the best service related business to own is whatever service most people in your area want, need, can afford and can’t get.
One of the big questions you need to ask yourself before investing in a new or established small business is, “How many headaches am I prepared to deal with?” Unless you are the luckiest person that ever lived, the odds are that you are going to be sued, robbed, vandalized, run afoul of an inspection or have a code violation at one time or another. If you not up to dealing with those sorts of hassles, then a storefront is not going to be the right choice for you. If a service type business doesn’t appeal to you either, there are still some interesting choices. If you can’t be the store, how about supplying it? Unique craft ideas and items are highly sought after. There are huge numbers of small consignment craft malls and stores springing up everywhere. Unique, one of a kind clothing products are also in demand. Decorated shirts, pants, dresses and bags move fast and fetch big bucks. Whatever the stores won’t buy, you can always try selling online.
Tap into the market for used or bargain goods. Second hand or bargain furniture and clothing stores were the fastest growing and most successful storefront-style small businesses in 2002. Everyone needs furniture and clothes, but what happens when cash is tight and you can’t get credit? You go to second hand stores. Although it’s not something I would encourage given the neighborhood repercussions, I know of more then a few people that make a ton of extra money by having a garage sale twice a month.
You can collect used clothing or buy discontinued and imperfect new clothing cheap by the box. Just adding a few studs or an appliqué to some used quality jeans or imperfect new items can make them worth ten or twenty times what you paid. Purchase used furniture at house or apartment sales, clean it up and resell for a nice profit. Buy discontinued furniture kits, put the stuff together and sell a five dollar set of book shelves for ten. Given the recent baby booms, quality new and used children’s clothing at cheap prices is always in demand and presents a good business opportunity. People are looking for bargains. If you can offer them new or used clothes for prices from a dollar to twenty five dollars, you’re likely to make some fast money.
Almost any small business or service you start in the real world, can use the internet as a source of attracting customers. The biggest mistake that anyone with a service or business can make is to avoid having a website. Even if it’s just an online business card with contact information, that gives you access to many more people in your area who own computers, go online and are likely to look there before ever picking up a phone book. It’s also a time saver. If you offer a service like wedding, family or portrait photography, you can display some of your work on your website. This allows potential customers to take a look at your work, without taking up your time. If they like what they see, they’ll call or email. Posting your price list will eliminate having to deal with bargain hunters on the phone. You can visit my website at http://www.100earningtips.com for a list of places to get free websites and free site building help.
Word of mouth is still the most powerful way of attracting customers. No matter what small business idea you plan to pursue, make sure that you are ready, willing and able to offer your customers a good deal and excellent service when they need it. People are so used to substandard service, that even when a barely competent person goes the extra mile for them, they sing that person’s praises to all their friends. Go the extra mile, charge prices that will bring them back, be totally honest and offer the kind of service you would like to receive. These are non-negotiable items when it comes to being a successful small business owner.
Beware of ‘junk’ franchises. These are offerings made by companies that get rich from selling equipment to unwary people wanting a turnkey style, get rich quick small business. The worst of these are the used pay phone and cheap vending machine deals, but non-existent routes for food, prepaid phone cards and novelty items are also right up there. Companies run ads in Entrepreneurial magazines offering exclusive distributorships for rechargeable or prepaid phone cards, cheap candy, junk novelties or out of date CDs right in your own area. They claim to offer routes with established businesses ready to buy their products. That actually means they give you exclusive rights to try and sell their stuff to any small stores in your area that will buy. The vast majority will not, and don‘t be surprised if your ‘exclusive territory‘ is just a few business blocks wide! Meanwhile, your stuck with a contractual commitment to buy a certain number of items from the company each month as part of your franchise. Many of these companies will insist on a prepayment of three to six months worth of products before they will award you the franchise, with a need to buy more each month allowing for non-existent growth.
If you want to invest in a small, turnkey style franchise like cleaning, resurfacing, weight loss schemes, vitamin products or most anything, try and link what you already do or the resources you already have to your future business. If you’re a Realtor, for example, a carpet or house cleaning business might be a natural extension of your profession. People selling or renting a home need it cleaned. If you’re a fixit person, you can offer your customers name brand tile or carpet cleaning. Franchise pavement or roof resurfacing and deck resealing is also a plus that can add to your income. Auto mechanics working for themselves can make some nice extra bucks by offering windshield repairs, tinting or auto painting. Most small franchises should be thought of as an extra income with a growth opportunity.
Before you call that 800 number for franchise information or visit your local business broker, spend a lot of time looking in the yellow pages and visiting some small businesses in your area. If you see a lot of empty storefronts, that will tell you that normal retail doesn’t work well there. What services are most needed? How much are they charging and do they seem to be operating at a profit? If you are still a bit stumped or concerned, try a business consultant. That’s one of the services that I offer. A good business consultant is not going to charge you an arm and a leg, but they will point in directions you may not of thought of and may need to go to give you a better shot at success.

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