Tips for Success in Opening a Small Business
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Introduction
Many small businesses will fail within the first year of opening. There is a reason for that and the reason is simple. They do not plan for the first year’s costs. I will explain the different steps that should be done before opening the doors.
Financing
The first and most important thing you should plan for is financing. This could determine whether you lose your home so it is an important one. The Small Business Administration advises you to have at least a full years funding before you even start. Setting up a partnership or corporation are some of the ways to get the financing. A partnership will give you the ability to get loans and partner funds, but be careful with the loans. You are responsible for paying these loans back. How will you accomplish this if your company does not turn a profit right away or goes belly-up? With a corporation, the corporation is responsible for paying the funds back. You are still ethically responsible but you will not lose your home. You will need to plan for building costs, product costs, equipment costs, employee costs, advertising, and utility costs. Do you really need an employee? How much in wages can you afford? Don’t plan benefits into your first year’s costs; add them later when finances are better.
Product Interest
The second thing you should research is your product interest. If interest in your product is low, then you might as well quit now. You need a high interest base in order to succeed. If you are producing this product, do you need special equipment? Is the cost high on this equipment? Can you lease it? If you are buying the product ready-made, will you be able to handle the cost?
Location
Your next item up for consideration is location and how you will sell your product. Will you sell by catalog, web-site, or store? If you are opening a store, is this a good location for this type of business? Will the buyer base support it? A thrift store in an exclusive area of town is not really a good idea. Likewise, a tool store would not fit in. A boutique in an industrial area would probably be an error in judgment. Fit the store to the area. It will give you a broader scope for your customer base. Customers will go to another store next door or down the street and see yours. It will be another form of advertising.
Conclusion
In conclusion, the first year in business is critical. The way you handle the topics I have mentioned, could be the deciding factor in whether you are a successful small business owner or a former small business owner.
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Wow Becky you are one switched on lady.
Great hub and great advice.
Wow, I just got this published. Thank you Sunnie and Rosemary for coming by. Some if my essay papers are all I have time to write right now so I am happy some are useful. I am happy you have found them useful.
Seeing the BBQ picture made me think of a bbq place not far from us that came and went, then a pizza shop in the same place came and went now there's another pizza shop there. I quess we'll how long that one lasts. That's life here in las Vegas shops come and go so fast.
Hello Becky. This is perfect. You layout the basics, and tell the age old adage, 'to be prepared'. It takes hard work and some luck to launch a business and have it bring in more than goes out. Very well put together.
Writer20, we have a couple of places here that every time we drive by, there is a different restaurant in there. They don't make sure that they have enough money to go for a while before making money. Takes a while to get a clientele. It is not just Vegas. Thanks for coming by.
Mike, thank you, I have had a business and it is really hard to get one going. I am happy that you approved of my advice. I hope people will take some of it so they don't end up in trouble financially. There is enough of that anyway. Thanks for coming by.
Becky, you are an amazingly quick writer. Good for you. This one should help people in many ways. I am so glad you joined HP and began publishing. You have such talent and so much to share.
Becky, This is a great way to help anyone hoping to start a small business, ( which is the back bone of our nation ) Thank you for sharing...
It's a tough time to start a small business, but may be a good way to start fresh, providing you find an appropriate niche and offer products that people will want. Sensible tips here.
Hyphen, I didn't write this for here. It was a class assignment for an English course I took a year or so ago. I just copied and pasted to publish. I figured if my English professor had given me an A, it must be well written and already triple checked. I am so happy to see you here.
always, I hope someone finds this useful, at least to get started in knowing what to look at. It is tough to know where to start.
Dolores, Thank you for coming by. It is a terrible time to start a new business but I believe that is the way we are going to improve our economy. Finding the right product and place to sell is essential if you are going to make a go of it.
Becky...
Excellent informative hub! I would like to start a home-based writing business...this should all apply to that, right? I do understand...product interest will be low...
Thanks!
Thought Sandwiches, with your sense of humor, you should be able to make a fortune. All you need to do is find your niche.
This is a great overview of the steps entrepreneurs should go through BEFORE starting their business. A well-planned business has a much higher success rate than one that was rushed into.
Thanks for the great info!
Business Time, Thank you for your great comment. I tried to make the essentials available so that people can plan and get off to a great start. It is hard enough to get a small business going without missing steps that would make it easier. I appreciate you coming by.
Hi Becky, what you say is generally true. Voted up and useful.
By the way, if you want to help Hub writers get into business, click on some of the adverts on the Hubs, it helps generate income for the Hubber and you might learn something about a product or decide to buy something to boot.
I wonder how Paula Dean built her business? The reason I ask is because I am thinking that there may be people who've lost there jobs, but are good at doing something they love to do, (Like Paula with cooking)... Maybe, just maybe, there is a way to go into business without too much overhead. Like Paula, they may never have to work for anyone else, ever again! Such a delicious thought of financial independence.
LuxmiH, Thank you for coming by and leaving such a nice comment.
Also, Thank you for pointing out how people on hubpages make money. It is very nice of you.
Another great hub. This one is very useful to those planning a new business, online or off. Great job!
Teresa, I am so happy that you could come by and visit. I am glad that you find this a useful hub. I always aim to please.
A very useful article for anyone thinking of taking the plunge to open a small business. You are so right about the location having to be considered, several times locally businesses such as cafes have opened and failed because the location was just not right or because they were 'out of sight'. Yet one cafe that is in a location that has no rivals is thriving and is poplar with locals and tourists too.
Hi Story Page, I am glad that you find this useful. There is a spot that has had several restaurants in it and within a year, they are closing. I do not understand it as I have eaten at some of these places and they have really good food, reasonable prices, and good service. With it being right on one of the main Highways in our area, the location should be good. The only thing I can think of is that they do not know how to manage a restaurant.
Hi Becky,
I know I read this but must have been pulled away or distracted before I commented..sorry..this was a really good hub. Recently my husband launched and on line business. He is putting up a story front at the end of the year. Right now he is really working hard learning all about it. I do agree you have to be prepared. We hope for this to one day supplement his income. Thank you for a great article. I hope you have a great night.
Love,
Sunnie
Sunnie, I am glad to see you here. I end up getting distracted all the time. I was going to answer this a bit ago but the dog wanted to go out and then when I got back, I forgot what I was doing.
It is a lot cheaper to start online than to start right off with a store front. I have done that and it is scary. Being prepared is the only way to go. Try to have enough set by to pay the bills for the business for a year. That seems to be the magic number. Also, try to find the best place for that type of business. I had an antique shop and we located it in an old area of downtown that they were trying to revitalize. They did our advertising for us.
Good luck with the business.
Wow Becky, you put this together very well. Starting any business takes planning. If you don't have enough money put away it can really put you in a world of hurt.
In August of 2011 I "became the proud owner" of an internet business. My roommate had borrowed my credit card to buy a cloned website. She made a few goofs and it became mine. Within a few months the people who had sold the site were on me telling me I had to pay a whole lot more money. They would "fix" the problem for a little over $4000. This quickly turned into over $12,000. Sometime in January I had bought another cloned site. This time everything was checked out before paying for it. In February someone hacked my computer taking the codes to every bank account and credit card I owned.
By the time I recovered most of what I had paid for was gone. Luckily the thief didn't get much, in the end there was only a little over two hundred dollars that didn't show up. I did however end up with one of my credit cards two thousand dollars over the limit. This is because someone didn't pull the money when they were supposed to.
The money to repay all this had to come from somewhere so my corporation had to find a new way to earn. We restarted with totally free internet programs. Between that and the cloned site I put together a new plan which has been working. The first check came in sometime in April and I have never looked back.
As a corporation we now have over thirty cloned websites, two full time employees and one part time. We only "sell" two things. One is a hands off way for people to start an internet business and the other is merchant (credit card) accounts.
We use tell not sell by using the free programs to open doors for us. The program is working. We have two independent contractors doing the same thing in another city.
wheelinallover, Thank you for coming by and visiting. I put this article together for a writing class in college. I used the information from the previous class, Business 101. I got A's in both classes. I worked hard on these classes and the results showed. I am still in college trying to get a degree so that I will be able to help support my family a little better. I appreciate comments from people who have done well in business.
Even though I am self educated, I spent two years mentoring college students who did all their college classes totally online. So far for three different online colleges. I was asked to teach a Junior college class but turned it down. Too much time for too little pay. At the time I was making more in three months than I would have earned in a year teaching.
I have to say thank goodness writing is a passion of mine. Way too much of my time is spent writing Ad's, emails, and blogs. Hub pages is the only place I can let my hair down and make mistakes.
I did "take a break" from business today, just did about half of normal, other than advertising. I am finding it hard to find my six year old voice for the article (Hub) I am working on.
I really enjoyed reading your article. Keep up the good work.
I am glad you enjoyed reading my article. I am in school online. I have a disabled husband that I am the caretaker for. I am hoping to get my degree and find a way to earn from home. Going for medical coding and billing. I need to be around in case he has a problem.
The love of my life was disabled also. She was one of the last who suffered polio in our area. She was wheelchair bound from the time she was eight. Her Associates degree took 18 months. She worked for the state as a receptionist. She loved her job.
I became wheelchair bound 3 1/2 years after we were married. The doctor's said I had three crushed disc's and a ruined inner ear. My bones when seen in an X ray look like Swiss cheese. I still lose my balance and fall both in the wheelchair and when transferring. In spite of that I lived alone for four years. My wife passed away twelve years ago. After I fell and hit my head, laid on the floor passed out for six hours before anyone found me, I decided it would be better not to be alone.
I am sorry she is gone. My husband was disabled from being in Vietnam. But the injuries that disabled him are not from being wounded. He has PTSD and several problems from Agent Orange. He also has a seizure disorder. They say it is not service connected but he had several head injuries in the service and Agent Orange also causes seizure disorders. He also falls when he is not feeling well. They finally got around to giving him a walker with a seat so that he can sit down instead of falling.
My degree is taking longer that 18 mo. because with all I have to do and being over 50 now I do not remember as well or as fast. I only take one class at a time.
I know how that goes I have a few senior moments now myself. When I was mentoring the students were taking two or more classes at a time. One shipped her assignments to me while I was right there with the others. What I did is read the assignment and make suggestions on how to improve them. There were a few times I put together an outline of what the teacher was expecting when the student just didn't get it. There were times I spent hours researching just to make sure I knew things were being done correctly. I enjoyed working with most of the teachers, I was in direct contact with most of them so we could stay on the same page as far as their expectations for the students. There were a few that never allowed contact, which is why the research was necessary. Only one of the students I mentored came in with a grade point average less than 4.0. My work helped but it was always the students who earned the grade.
Most of the instructors have been very good at telling us what they want before being asked. They know which questions have been asked before. The only one I ever had a problem with didn't grade a paper that was turned in on time in the 2nd week. I bugged her about it for the rest of the class. Then I contacted the Ombudsman. When she finally graded it, it raised my final grade from an A- to an A and kept me on the Dean's list.
Great job Becky. This is very valuable info. much appreciated. I am currently working from my home but who knows what the future may bring....
Hi carol3san, I am glad you found this useful. I wish I could work from home. Maybe someday. Thanks for coming by and looking.
Sunnie Day Level 8 Commenter 7 months ago
Great hub Becky and very timely...My husband is trying to get his little online bussiness off the ground..it is slow but he is good at what he does..He doesnt have a store front yet but it is coming..on line I mean..He is a coin collector and decided to go that route..with the auctions online he spends hours bidding and resaleing..but no over head thank goodness...You brought up some great points that people do not consider..Thanks for a wonderful insightful hub
Sunnie