If someone asked you how to start their own business, what would you tell them? Personally I don`t have a clue, yet was asked by this woman I met while visiting the local establishments.
What kind of business? I imagine most successful businesses - that is, the ones which are based on a good idea - start as a concept, and then the guy starts to think about how he can materialize the concept. For instance, let’s say your idea is Facebook for cats. How do you monetize that? Make a test website and invite your friends? Poach members from AF? etc.
Someone who is not particularly inspired might look for small businesses to buy and grow/turn around. For instance, from listings like this: http://www.bizbuysell.com/
If I remember my business law class correctly, and I’m sure I don’t, I believe you start and LLC and people give you money.
My family are all small business owners. I think I was the first to not go that route. Over the past couple years I’ve been looking into going the small business route and spent a lot of time following entrepreneur blogs and even interviewed a few of the guys that run those blogs. Between what I saw growing up and what I’ve learned otherwise here are some key takeaways:
-Don’t overplan. Find a good idea, or a need that is either not being served or you feel you can serve better. Do that thing.
-Control costs, especially early on.
-Prepare to work a lot and not get paid at first.
-It may take more than one attempt to get it right.
-Don’t pursue glam industries. Most people who want to start a small business romanticize a winery or a brewery or a restaurant, or some fabulous designer boutique or whatever. It’s too competitive, too fickle, and in the end too risky to be realistic unless you just feel like gambling.
- Beyond that, attend some trade shows, figure out what you need, and then take care of those things.
It seems to me that if you need a detailed step by step then you’re probably not meant to start a business. Running one involves a lot of working with unknowns and figuring things out or researching them for yourself.
And here’s the first foolish post of this thread…
My best advice is to focus on what you are going to sell first and here’s two completely different examples 1)cupcakes and 2)consulting.
- Cupcakes
If someone is going to open a cupcake shop obviously you would have to be able to make a bunch of different varieties and they would have to be perfected. You’re not going to go through the legal crap if you have no product. Once you have the product, I would say define your market. How are you going to distribute them? After that location, legal, etc.
- Consulting
Everyone is a consultant so how are you going to distinguish what you do? What is your client base going to be?
There are advantages and disadvantages of forming a LLC or S Corp depending upon what state you are in. As an example, in CA if you form a LLC you have to pay a minimum tax payment each year regardless if you have any income. In MA you have to pay a $500 fee every year for an “Annual Report.” Generally speaking the liberal states are the states you do not want to organize in they are anti-business. I could go on and on…
^Good advice, especially about overplanning.
Initially, explore ways to sell your product (if selling goods) or time (if consulting) to potential customers. Once you identify a few ways, just do it. No point stretching the planning out to be perfect since, like Black Swan said, it may not work the first time and you may have to identify a completely different venue.
Example: you plan to sell perfect cupcakes through a perfect website. The cakes have to be perfect, but the website, not so much. It should be professional and reliable, but if people don’t want to order your cupcakes online, the best website won’t pursuade them. Go sell in the local farmer markets and see if face-to-face works better.
I think first thing is, you just have to flat out come up with a really good product, and try to build traction among a small group of people…that’s your Test. And in that test group, once you see how users use it/interact with it/not use it, you then come up with a “plan” to bring it to the broader world. IMVHO, I think it’s better to think about your venture as a product, rather than as a “business”…
Step 1: Find a problem that needs to be solved.
Step 2: Develop a product or service to solve this problem.
Step 3: Talk with as many potential customers as possible before you decide to start a company to confirm that your product solves their problem.
Step 4: Take the leap and start your company and build your product or service.
Step 5: Start charging customers for your product or service.
Step 6: Build your company one customer at a time.
You should raise as little outside capital as possible for as many steps as possible.
I just finished a book called Hearts, Smarts, Guts and Luck written by the former CEO of ThomsonReuters. I had to read it since I’ve always believed that the most successful people I’ve met had brains, balls, a strong work ethic and luck. The book took a more scientific (and PC) approach which was interesting. A good balance of all 4 is important. It’s a pretty good pep talk if you are looking to start a new company.
One of my friends is actually in the middle of doing this right now. She started making cupcakes for (and then selling to) friends and family. She began growing by word of mouth and is working with a few caterers now as well. She is still working out of her kitchen (so it can take like 5 hrs to fill a big order) and holding down a full time job.
Basically my point is for a lot of businesses (like a bakery), people make the mistake of thinking you need to drop everyhting, get a huge kitchen to mass produce, a storefront, etc.
Don’t listen to Blake. He has no idea what he’s talking about. The cupcake consulting business is going no where.
If you do a quick google search you’ll find plenty of free resources out there on how to start a business.
In addition, there are some real good websites to organize your business plan when you ge to that step. I liked LivePlan.com (has a small free, but there are probably free alternatives)
Not to pick on LBriscoe but I hate it when people tell me to Google it. I f*cking know I can google it. What I want is opinions and ideas and links you found useful, from the semi-real people like on this forum. (I say semi-real because being older and more jaded I accept the possibility that there conceivably may be people with agendas or the born saboteurs/misdirection specialists here. But by and large you seem to be normal humans if hornier than most.)
Ha ha, I think it has more to do with people on average not having the same filters on the internet like they do in person. But I LOL’ed after reading that sentence.