Everyone thinks business owners live the dream life. They see a person who has money and lots of toys so of course they are living the dream, right? What most people don’t realize is this entrepreneur has undoubtedly had to work through incredible mental and physical stress to get to the point he or she is at currently. This tough beginning to any business is known as the startup roller coaster. It’s exhilarating at times when things go well but depressing and stressful when you make a mistake or make a decision that impacts your business in a negative way or something happens that’s beyond your control. The ups and downs can be too much for many just starting out in a brutal marketplace. At times this roller coaster might be so intense that you want to go back to the regular 9-5. Filled with a steady income and less hours, this might be a true temptation when things are down.
Perhaps you have a steady job, aren’t happy, but might pay well. You haven’t secured millions to get things off the ground. You’ll be operating on a tight budget. It’s hard to make the transition to entrepreneurship and even harder to get things off the ground. This article is not an attempt to discourage anyone. It is the author’s hope that instead, it inspires and motivates young entrepreneurs to take that leap.
The Vetting Process
Is your business idea even going to work?
- Make sure you break down the numbers on your prospective company. Find out how much you need to make and then find out how many sales that would equate to for you to break even.
- Make sure to use realistic numbers. It helps to ask around or call some other companies to find out their general pricing.
- This is important so you know how much to charge for your service or product to be competitive in the marketplace.
- Also figure out what your edge over the competition will be. How will you not only be different but make this difference result in more sales?
- Use Google’s keyword planner. Use this tool to find out how many people are searching for your business idea. Let’s say you are going to go into the pool cleaning business in Phoenix. The first thing you would want to know is how many monthly searches there are for “pool cleaning phoenix.” The Google keyword planner should be able to help you with this as well as figuring out what your main keywords are going to be.
Use all this information to your advantage – make it a part of your business plan.
Committing to Entrepreneurship
Is entrepreneurship for you?
There are a lot of questions to ask yourself before you take this leap.
- Do you need health insurance through your day job?
- Are you able to make a serious time commitment to this company?
- Is your spouse or partner onboard?
- Do you handle stress well?
- Do you have the time? Having your own business is very time consuming and labor intensive.
Ask yourself these questions and try and think of anything else that might get in the way of your dream. It’s important to figure this out first before you invest a ton of resources into your idea.
You Will Be CEO, Salesperson, Janitor, and More!
Most founders of businesses call themselves CEO and even have it printed on their business cards. The reality is that you will be CEO as well as in charge of every other aspect of your business. You will be taking the trash out, be 100% in charge of sales, customer service, marketing, and everything and anything else you can think of. Basically, if you don’t get something done, then it never gets done. At first you can’t rely on those expensive employees to manage all these tasks for you. This results in long hours and late nights. Entrepreneurship is not a 9-5. There will never be set hours.
You Will Need Startup Money but Be Careful
Unless you start a business that makes money from day one, you will need some capital at first. This is the hardest part of starting a business. You might have to convince someone to invest in your business, but this is very rare. When it does happen, often you lose large percentages of your company to the investor. You can try your bank, but they generally don’t want to invest in a business that hasn’t been open for 2 or more years.
Family and friends will be your best bet to secure the startup capital you need. These are people who know you well and might want to partner or invest in your idea. Be careful with these percentages though. You are going to be working incredibly hard and it would be frustrating to have to give away part of your earnings to an investor for life. If you can, try and acquire capital as a loan you can pay back. Even if the interest on the loan is high, once it’s paid off, you retain 100% of your business. (Get information on obtaining an SBA secured loan.)
Bookkeeping and Data Collection
Most people aren’t thinking about bookkeeping when they first start a business. All thoughts and efforts are put into how to make money. Bookkeeping will be essential for your idea because you are going to need lots of data to make good decisions. For instance, if you aren’t keeping track of where the leads come from then how are you going to know which marketing avenue is worth putting more money into? If you don’t track how much the leads are costing you, then you have no idea what you need to charge customers for your service. As you can see, the data is what you are going to rely on exclusively for making strategic business decisions. Keep this information up to date and as accurate as possible.
Website and SEO
These days a website and search engine optimization (SEO) should certainly be a part of your marketing plan. A few years ago, websites would cost upwards of $10,000 to build. This is not the case today! Depending on your website needs, a site can be built from between $500 to $3,000 or more. The more complicated your site is, the more expensive it will be.
Or, if you are a little more creative and have some technical ability, you can use Squarespace or Wix and design your own. The only problem with this route is the hosting may cost you more in the long run as you are paying a monthly fee. If you go a traditional route for a website through WordPress or some other platform, you can typically pay very minimal hosting per month.
On the other hand, if you build your own website then you will know how to make any necessary changes or updates as needed. And they will be needed as your company expands. This opposed to paying the person who built your site to make changes every month might be worth the trade-off. However, don’t forget backups and security if you go the DIY route.
SEO is crucial to implement if you are planning on being in business long-term and want people to find you online. The more SEO strategies you implement on your site, the higher it will rank on the major search engines. These search engines are filled with customers searching for the product or service that you offer. If they can’t find you, they can’t buy from you. SEO can be very expensive if you hire someone to do it for you. Marketing agencies can charge anywhere from $1000 to even $10,000 per month! What most people fail to realize is there is a ton of free SEO information available on the web for you. A good knowledge of SEO saves your business money and can only make you and your business more valuable.
You can build a business both with and without capital -- I have experience with both. It’s much easier if you have the cash but not all is lost if you don’t. Worrying about money can easily be a constant thorn in your side. Entrepreneurship can be a crazy life. Will your idea survive? Will you run out of money? How are you going to get the phones to ring tomorrow? When you are working your regular job, these questions are answered for you by your bosses. The tough part is you aren’t guaranteed anything as an entrepreneur. No set paycheck, no health insurance, no set hours. This can be terrifying to most people but the fact that you have read this far into the post shows you have drive and desire. You are someone special who can change his or her life with a business. If you work hard enough, you will succeed. It’s inevitable if you have that “Never give up” mindset. There is no sweeter feeling than to know you built something from an idea into something you can make a living off of and in some cases, set you and your family up for life. Good Luck!