starting a small business

Everyone has a different opinion on how much preparation is required before starting a small business. Most people agree that you need to stop and do SOME planning and research before taking the leap.



Like many people I had researched and thought about creating my own company (or a family business) for years before I actually took the leap. During that time I did some contracts (mainly for former employers) between my permanent jobs or instead of permanent jobs for times as varied as 1 day to 2 years. So when I found myself suddenly leaving a permanent job at the age of 29 I decided to take the plunge for real and COMMIT to starting my own company. Due to the suddenness of my switch I skipped a few of the steps I would otherwise have taken.

I overcame this by taking a short initial contract to give myself time to see if this is what I really wanted. During that time I throw myself into contracting completely. I made business cards, a website, sent out notices to my previous employers and business contacts, registered with multiple temporary/project employment agencies, throw together a two year budget, checked hundreds of websites to see what the market was like for my skill set, talked to other contractors, looked into taxation and legal decisions, bought a laptop, set-up a home office, developed billing and contract templates and really just jumped in with both feet. I won't recommend this approach to everyone - I have been incredibly fortunate to be able to get jobs fairly consistently from former employers and clients. So what should YOU do to start YOUR small business?

a. ask yourself the key questions
You need to examine your goals, motivation and expectations before you jump into a new business. By answering the questions surrounding what you want from this venture - you form a set of goals and objectives which help you to stay focused. This also allows you to better decide what idea will allow you to achieve these goals. Check out the hundreds of ideas we have gathered here for some INSPIRATION!!

b. common errors
One of the saddest things to see is a small business that fails due to one of the most common errors. These errors are all so preventable - you just need to be aware of them and look out for them!!



c. research, research, research
It is very important to research all aspects of starting a small business. From the market for your product/service to the tax effects of the form of your business. Most small business that fail - fail because they did not recognize and address critical issues.

d. setting your rates and prices
Setting your hourly or flat rates for service or your prices for products can make or break your business. With so many different methods of setting your prices and rates it can get very confusing to new business owners.

e. write a budget
I am a chartered accountant - but I used to hate having to do personal budgets - so I can't imagine other people enjoying it much. The thing is - for business owners it is absolutely KEY. As a small business owner you need to plan for: unpaid time off for vacations, downtime and sick time; health costs; business interruptions; retirement; personal expenses and taxes and government remittances. Without a good budget these costs can sneak up on you and cause a serious cash crisis.

f. write a business proposal
Ok - so I am just like you - the idea of writing a business proposal is about as fun as a trip to the dentist. I think the major issue is that people think a business proposal needs to be 25 pages thick and written like a phD thesis. The truth is that a business proposal can be as short and simple as a paragraph of conversational writing. For more information about business plans check out www.writing-a-business-plan.org

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