Things to Know Before Starting a Small Business
Becoming an entrepreneur brings a huge sense of self-satisfaction and accomplishment with it— a fantastic reward for the stress and worry that comes alongside it. Fortunately, careful planning and introspection can help mitigate the stressors and create a sustainable, successful enterprise. Here are some key things to know before starting a small business to help you navigate the process better.
Understand Needs vs. Wants
One of the best pieces of advice for starting a small business (and for life in general) is understanding needs versus wants. Determining what your business needs to get started versus what you’d like to have is an important distinction that can save you time, stress, and money.
For example, you may determine that you’ll need the ability to fax online documents as you travel from place to place. Conversely, it might be nice to have an assistant manage communications for you, but not feasible during the early days of your business.
Many small business owners who secure financing make the mistake of spending everything they have on wants. This approach will set you up for failure when unexpected needs inevitably arise.
Be Frugal, Not Cheap
There’s an essential distinction between frugality and cheapness. Being cheap means purchasing low-value items or relying on others because it costs less money at the time. Being frugal means knowing when to spend and when to save and knowing that it’s worth spending more on high-quality items that bring value to your business.
While being cheap might save you money up-front, those costs will come back to haunt you later on. Cheap materials and items are quicker to break or lose their value, requiring costly repairs or replacement fees. Measuring the opportunity cost of being cheap is also integral— if it takes you hours to do it yourself, it’s likely better to pay an expert.
Create a Detailed Business Plan
Creating a detailed business plan helps organize your thoughts on paper and creates a reference point for your business goals. As you work through this process, you’ll be encouraged to conduct detailed market research, outline how you’ll attract customers, and determine how much financing you’ll require.
Many lenders and investors require a detailed business plan as a part of the application and approval process for financing. Look at this as an opportunity to predict and overcome barriers and challenges before you invest more time and money in your business.
Start with a Brand Strategy
Many small business owners put branding on the backburner, preferring to address it after the business has launched or neglecting it entirely. Starting with a brand strategy can help streamline your sales funnel, as it guides you in finding relevant touchpoints and trust with your ideal customer.
Another simple branding strategy that many new business owners overlook is product packaging. Investing in custom boxes and packaging is a great way to ensure customers have a positive experience with your brand. It will give them a greater sense of value and connection, thus increasing the possibility of them remembering you.
Develop a simple brand strategy that outlines your mission and values, as well as your tone and voice. Use this exercise to get to know your target demographic better and clarify how you’ll build a rapport that results in repeat sales.
Create a Smart Financial Management Plan
Financial management is a common struggle for entrepreneurs. The first step in creating an intelligent financial management plan is separating business and personal finances. Then, you need to find the intersection point to sustain both your business and yourself.
Keep these key considerations in mind before you start your small business to improve your chances of long-term success and profitability.