Friday, April 25, 2008

10 Steps for Starting a Side Business

In my book, being self employed is the only way to go. However, for many people with a secure job, a family to support, and benefits to consider, launching themselves full time into an untested self-employment situation would be disastrous. A better way to move from employee to self employed? Consider starting a side business. Here are ten tips to get you started:

  1. Use your current talents, skills, and abilities as the basis to begin your side business. For example, becoming a blogger if you honestly have little writing ability is probably not the best way to get started in a business. Ditto for job heavy on sales if you don't have stellar people skills, or buying into a fast food franchise if you have no experience in the restaurant industry. Pick your strengths to work with and you will be half way to success with your new venture.
  2. Start with the basics. What kind of basic supplies and equipment do you need to get started? Simple business cards, basic tech gear, and some basic advertising will help launch your business in a much more cost effective manner than investing thousands for top notch advertising and computers that, after getting into the business, may not be what you really need.
  3. Have a plan. Iron out a basic business plan before you get started. This forces you to take a look at things such as demographics, permits, licensing, and market conditions that many people tend to overlook in the excitement of starting a business. A plan also gives you a direction to follow so that your daily "to do" list is focused and your efforts are not scattered. Remember, once you get your feet wet, you can always go back and refine/update your business plan.
  4. Make money. Many people do everything to start a business except make money. Once you have your plan and everything you need to get started, get started! Go out and get your first client, your first sale, or your first project and actually earn something from your business. This will give you confidence to to continue in your efforts, and help you to focus and refine your business offerings.
  5. Put half of all of your earnings in the bank. All kinds of financial issues come up when you own a business, not the least of which is taxes, so be prepared by having the money in the bank to meet all of these challenges.
  6. Advertise! You may be the best plumber, writer, sculptor, etc. but if you cannot sell your work, you will not have a business. Encourage your clients to refer you to others if they are satisfied with your work, and immerse yourself in the marketing section of your local library or bookstore for lots of good ideas on ways to promote your business.
  7. Refine your plan. When you started out, you had a lot of ideas and little experience. As you gain more experience, it becomes time to refine your plan. Look at what you are charging. Should you up your rates to match the market? Look at your services. Are your services too narrowly focused or too widely scattered? Often new business owners will work for peanuts and do anything and everything to get their business off the ground. As you gain more experience and credibility, you can afford to charge what you are worth and do the work that you want to do.
  8. Look at ways to increase your income with less effort. What related products/services can you offer to your clients? If you teach yoga, can you write a book on the topic? Can you sell yoga equipment? Can you offer one-on-one yoga classes to clients who can afford this?
  9. Consider whether or not to expand. If your business takes off, what should you do? Be careful about quiting your day job too soon. Be careful about expanding too quickly and taking on expensive leases or employees before it is absolutely necessary. Take your time and get all of your ducks in a row before you consider expansion.
  10. Don't be afraid to quit or change direction. Businesses fail quite regularly. Businesses get boring. Businesses turn out to be more work than they are worth. There are a number of reasons why the side business you choose may not be the side business you end up with. There is no shame in quiting a business that is unsuccessful or turns out to be something you don't want to do. Feel free to quit, change the focus of your business, or open a completely new business.

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