10 Things You’re Never Told Before You Start Your Own Small Business

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Things to Consider before starting your own business, management mistakes to avoid, how to manage staff, How to be a successful entrepreneur, skills to be entrepreneur, entrepreneurial tips, how to start own business, how to be a business owner, freedom lifestyle

You’re on your 4th Tequila Sunrise as the sun sets, creating a gorgeous image over the North Pacific. As you’re warmed and brushed gently by the bubbles in your Jacuzzi, you look around and see the radiant orange glow of the amazing sunset light up the faces of your friends and family or…. an attractive stranger.

What’s that noise?!
Why is the sky going dark?
What’s that light???
Your eyes shoot open to see your phone vibrating manically and you squint to read the time on the illuminated screen;
“6:10am Monday”

Just like that your dreamscape is but a mere foggy memory and you prepare for another bus ride against a guy who forgot his umbrella and is now using you as an impromptu Shamwow, and another gent who seems to think personal hygiene is optional.
You arrive at work, plop down at your desk and start to daydream about an alternate lifestyle. One where you are your own boss, dictate your own hours, and the only personal hygiene issue you have to deal with is your own.

Sound familiar? If you’ve started your own business or are considering it, you’ve probably encountered this scenario before.

So when you FINALLY decide to start your own small business it is hard not to get carried away by all the excitement.
But for every entrepreneur that makes it look easy, there are several more who falter. In fact almost half of all new businesses in Australia close within three years, according to the Australian Bureau of Statistics.
The numbers in the US don’t fare much better. This article by Ryan Jorden in Linkedin Pulse quotes some hard facts from U.S. Bureau of Labor Statistics, BED,

“About half of all new establishments survive five years or more and about one-third survive 10 years or more. As one would expect, the probability of survival increases with a firm’s age. Survival rates have changed little over time.”

So what are the things that you should consider before taking the plunge? What should you know to give you the best chance of success?
Andrew Griffiths, author of the best-selling book The Big Book of Small Business, gives you his top 10 tips:

1. Be Clear About Your “Why?”

Embarking on the road to being a small business owner is one that needs to be considered in detail before setting out.
Being a small business owner is not for everyone; it is challenging, there is a lack of certainty, it can be very hard financially and it will take a lot of work.
It is NEVER a walk in the woods.
That said, the upside is wonderful, incredible satisfaction, control for your own destiny, the ability to earn more than you would as an employee and the freedom to run the business the way you want to run it. All of that said, you need to be clear about why you want to start your own business, going in it with your eyes very wide open.

2. Know Who Your Customers Are

It is important to know who is going to buy what you are selling. If you can’t answer basic questions about your prime audience, then you must do more research!
Who is your niche market?
Describe your ideal customer?
What products or services are they screaming for?
The clearer you are about who you are going to be selling to the clearer you can be about your branding, your location, your marketing, your pricing — everything. Be as specific as you can about your customers and learn as much as you can about them.

3. Check Out The Competition (And Work Out How You’re Going To Stand Out!)

Take time to visit any competitors, or similar styles of business.
See what they do well, see what they could do better. This gives you the opportunity to figure out how your business offering is going to be different (and ideally better) than your competitors.
To start a small business without checking out the competition is madness.

4. Do Your Homework On The Small Business Rules And Regulations That Might Affect You

There are always going to be rules and regulations that need to be considered when starting a business. They vary dramatically from region to region, state to state. Within Australia, check out the Australian Government site — www.business.gov.au and state business support departments.
In the US, you’re best off heading to BusinessUSA for your local rules and regulations.
Be warned, not towing the line because you were not aware of a particular law is no defence, especially when it comes to things like employment, workplace safety and taxation.

5. Get Some Help To Develop A Realistic Set Up Budget

When starting a business it is easy to get caught up in the excitement of the moment. This often translates to over estimating income and under estimating the costs associated with starting a business.
In his book The Big Book of Small Business Andrew Griffiths says,
“I work on a tough formula — double how much everything costs, double how long it will take to set up and halve how much income you think you will make — if it still stacks up, you should be fine.”
Having someone who understands budgets and small business, perhaps an accountant, to help you determine a budget is a very good idea.
Getting finance once you start your new business will be tough. Generally you’ll be funding the whole operation from savings or credit cards, so getting your funding in place while still gainfully employed is a smart option.

6. Make Sure You Are Going To Be Charging Enough

This is hands down one of the biggest mistakes that new businesses make.
They look at being the cheapest as their marketing strategy to attract new customers. The problem is that it is very hard to put your prices up once you develop a reputation for being cheap.
It is far better to sell on quality not price.

It is far better to sell on quality not price. Click To Tweet

Do your math, ensure that your prices will enable you to make a good profit.

7. Work Out How You Are Going To Get Customers

Sadly too many businesses invest a fortune in their new business, set everything up, fit out the premises, build the website, stock it and staff it — and then throw open the doors, expecting hordes of customers to come screaming in just like the brain-craving undead in any elevator scene of a zombie film.
This never happens.
You need to have a very good plan (developed well ahead of time) that clearly identifies how you will attract customers. This is considered a Marketing Plan and smart businesses invest in this before they spend a cent on anything else.

8. Get Your Advisers In Place

Source your advisers early and get them involved in the set up of the business. Ensure you have a great accountant (ask other business owners for referrals), a great lawyer (especially if you are leasing a premise), a great marketing adviser to help develop your Marketing Plan ahead of time and possibly a few other advisers like a graphic designer, website developer, IT consultant etc.
It does depend on the type of business you are planning to open. Invest in getting the right advice before you start your business and your chances of success will be dramatically increased.

9. Make Sure You Have Your Insurance In Place

Just as there are statutory rules and regulations that need to be adhered to, your insurance needs to be firmly in place before you open your doors.
If it isn’t, you run a very real risk of being sued – especially true in the US.
As a minimum, you will need Public Liability insurance — which protects you from people being injured on your premises. This is simple to organize from anyone who offers business insurance, but there are other, more specialized types of insurance covering businesses for everything from fire and theft to income protection for the business owner.
Find a great insurance broker, specifically one that deals with businesses and get advice. Once again, talk to other business owners for their opinions on what is needed and what is not.

10. Look For A Mentor

Having someone who you can talk to and ask for business advice is very advantageous. Mentors can to help avoid making all of the common start up and small business mistakes as they are usualy someone older, who has “been there and done that”, who is able to give their time freely and who has a modicum of success against their track record.
Having a good mentor to offer advice in the early set up stages of a small business would be very wise, but beware – they are basically helping you for free, so don’t ask TOO much of them or overstay your welcome. They are people too and require time to take care of their own business.

Work Smarter, Not Harder By….

Making sure you’ve actually PLANNED AHEAD the ins and outs of your business BEFORE you pull the trigger and start.
This might seem like a no brainer, but as your dreams of your business have been dancing around in your head for who-knows how many years, so too have the successes of this dream business.
Don’t fall into the trap of getting your dreams of starting a business becoming a reality with the dreams of success also becoming a reality before it’s even happened!
There is a lot of hard work on the road ahead.
As they say, failing to plan is planning to fail. These 10 points seem pretty ironclad, but what do you think? Do you have any to add to this, or do you disagree with any of the above? Make sure you write in, leave a comment or tell us on our Facebook page.
You can pick up a copy of Andrew Griffiths fantastic book The Big Book of Small Business here with free shipping!

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