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5 Tips to Starting a New Business
Many entrepreneurs who are starting a new business ask me what I need to know in the start-up phase.
Here are 5 essential things you need to know:
1. Make sure you have some alternative cash flow or assets. In the beginning, most start-ups will not make a significant amount of money for their owners. They can be successful if handled properly and given enough time to grow, but they tend to take money initially rather than make money. Raising funds to offset this unprofitable phase can make things much easier to bear. Having an alternative income stream to offset an unprofitable business at first is also a wise decision. Starting a business with the idea that it will initially pay all the bills is not realistic and should be avoided at all costs.
2. Have a good business plan. Given that the vast majority of start-ups fail before they really get off the ground, it’s important to minimize this risk. The business will be a product of your time, effort and seed capital; it’s worth at least having a good solid plan to increase your chances of survival. Not having one does not guarantee that the company will fail, but it will definitely reduce the already slim chance of success. A good plan that sets goals and sub-goals and paths to achieve them is crucial.
3. Delegate authority when necessary. As the old saying goes, “Rome wasn’t built in a day.” Another truth is that it was not built by just one person either. A business owner should really treat the company like a well-trained sports team. For example, a football team has a variety of players for different situations and jobs. The defensive player must be very big and strong, while the receiver must be very fast and have excellent reflexes. No one person could perfectly fill all these positions. There will also be many jobs in the company. It is important to match each individual with the work in which he is best. Too many business owners want it to be a one-man or one-woman show. This is a big mistake. It is important to save in the beginning, but this is an area that should not be neglected. If there is at least some alternative income, it is a wise move to hire someone as a contractor to help you in areas where you are not an expert.
4. Take advantage of cheap or free advertising. A lot of people these days still seem to think that advertising is just for advertising and TV commercials. While this can be a great way to give your company more exposure, not all of us can afford such expenses initially. Websites, blogs, and social media marketing are free or inexpensive. Without them, the company will be at a huge disadvantage. If your website seems too expensive or too technical, think about it; A hosted website usually costs around $10 to $20 per month. Running a business in today’s world without a website is unthinkable. A blog is free to own and publish. A blog is basically a mini-website where you can post articles about what your business does or similar industry-related topics. The idea is to get people to go to your website, so linking to your website on your blog can really drive traffic. Social networking sites can allow you to connect with many potential customers or clients. Connecting with people and talking about what you do can be a great way to gain more exposure.
5. Get in touch with everyone you know and tell them about your business. Old friends from high school, your neighbor, family and acquaintances; all these people should be contacted and informed about your company. Don’t try to hard sell them or anything, that’s really boring and counterproductive. Tell them about your new company subtly and don’t try to sell them your services or products right there. They’ll probably tell their friends “Hey, I ran into Jason the other day; guess what he’s doing?” If done right, it can spread the word about your company like wildfire. You also never know which person in your past or present may want your company’s help.
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