Starting A Small Business
Starting a small business should never be considered a minor undertaking because it will affect every area of your life. And starting small doesn't necessarily mean you'll stay that way - just look at Woolworth's and Microsoft.
How far you want to take your business will depend on your overall goals. The eventual size of your business depends on you and the scope of your ambition.
If you've chosen to start your own business, you're in good company.
In his best-selling book, The Millionaire Next Door, Thomas Stanley revealed that the majority of millionaires interviewed for the book made their fortunes through running their own businesses. Of the deca-millionaires (those worth over 10 million net), the percentage rose to 97%.
Robert Kiyosaki, in his Rich Dad, Poor Dad book series, promotes running a business as the fastest way to generate cash flow and become independently wealthy. His mentor, the rich dad of the title, used his businesses to build his property empire. Starting a small business can be a first step towards creating substantial wealth.
Steps To Starting A Small Business
Starting a small business is a life-changing decision and should never be approached haphazardly.
Here are some preliminary steps you need to take once you've decided to start your own business.
Running A Small Business
- Do surveys and other forms of testing to ensure there's a market for your product and/or service. If you've been working in the same industry as an employee, you may already have some of this information. But you also need to know if there's enough demand to sustain a new entrant into this market.
- Assuming your market research data is positive, start getting your ideas for the business on paper. Do a rough sketch of how you see the business functioning - how your product will be created and how it will reach your customers. Map out a best-case scenario of how you'll do this:
- Will you have a storefront? If so, now is the time to check out possible locations and evaluate the costs.
- Can you work from home? If so, how will you handle customer contact?
- Do you need employees? How many will you need to start with? What skills will they need?
You must have a rough idea of these basic components before starting a small business. You'll fill in more detail when you do your business plan in Step 6.
- Commit to maintaining a wealth mindset at every step of the way. Write goals for the business, use affirmations regarding your outcome for each step and utilize physiology and anchoring to ensure you're always in the right frame of mind for tackling any business or promotional activity. Identify any beliefs you have that might get in the way of your business success and replace them with positive ones.
- Contact your federal, state and local government offices and inquire about any resources they offer on starting a small business. These might include:
- Information packages
- Free workshops
- Grants or other funding
Ask them to send you everything they have. Then read it!
Australians can tap into government resources for starting a small business on our Government Assistance page.
- Do your homework. Do some preliminary reading about starting a small business, including the important set-up phase.
- Find the top business books in your country and read at least three of them.
- Read Rich Dad, Poor Dad and The Cashflow Quadrant by Robert Kiyosaki. Make sure you understand the difference between being self-employed and owning a business.
- Take advantage of any free courses for new business owners. Attend as many as you can.
- Learn to write a business plan. You must be able to define exactly what it is you're selling, either a service or a product, and then work out on paper the best way to present this to the buying public. Use the ideas you developed in your rough sketch (Step 2) as a starting point.
This may seem like a tedious exercise but it's a key prerequisite to successfully starting a small business. This is where you'll discover the financial feasibility of your business idea.
- Develop a budget for the business. Make sure it includes tithing at least 10% of your gross income.
- Decide on a business structure. Research the advantages and disadvantages of each and decide which best suits your purposes. Keep in mind that this isn't an inflexible decision. When starting a small business, you might begin as a sole trader and then make the transition to a company as your business builds.
- Establish your professional support team. Find a competent accountant and lawyer and set up your business structure through them. If your structure is complicated (e.g., involving a company-trust combination), it may be better to do this before your business starts trading.
- If you don't set up a structure through an accountant or attorney, you'll need to contact all the necessary authorities yourself with regard to setting up the business. Purchase your business license and business name (if appropriate), and register for tax or any other required reporting obligations.
If you're starting a small business in Queensland, Australia, you'll find a simple way to contact the state authorities on our Government Assistance page.
- If you're setting up a factory, storefront or office, now is the time to finalize this.
- Hire any necessary employees. Think in terms of a team. Hire people who are smarter than you are (i.e., who have expertise in areas where you're lacking, such as accounting or marketing).
- When your product is ready to market, finalize your marketing strategy. If you need to do further study, do it before you invest in advertising. Or delegate it to a staff member who has either marketing expertise or an aptitude for the subject.
Thorough preparation in the initial stages of starting a small business will give you a head start towards creating a successful enterprise.
Obviously, starting a small business with adequate preparation is just the beginning. Once your business is under way, your attention will shift to a new set of concerns:
Your Next Step:
- Pay attention to what's working and what's not. Modify the activities that aren't productive until they work or replace them with more effective ones.
- Make sure you steer clear of the traps that doom most small businesses to failure.
- Look into low cost ways of promoting your business, including the use of promotional products such as fridge magnets. Promote goodwill among your clients with small tokens of appreciation, or send them flowers on special occasions.
- Use your profits to create your wealth creation plan.
- Be sure to read the Why Small Businesses Fail page before starting a small business.
- For an excellent resource on systemizing your business, get a no-cost copy of Rich Schefren's Business Manifesto.
- If you're interested in starting an online business, go to the Internet Business page.
- If you're starting a small business in Australia, you'll find help on the Government Assistance page.
- Visit the Amazon web site for more information on creating a successful small business:
(If the Amazon box doesn't display any book titles, just click on your browser's "Refresh" button)
Disclaimer: This site is purely educational and we make no claims or guarantees with regard to the information presented. Please consult a certified NLP practitioner for individual coaching in the use of NLP techniques. We strongly advise consulting a financial industry professional before embarking on a wealth creation journey.
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