Starting up your own business is stressful enough with out having to worry about the poor economy. However, you should not let a bad economy stop you from going after your dreams. With the right guidance and preparation, your dreams of being an entrepreneur can still become reality.
I opened my law firm 18 years ago and my franchising business 3 years ago. My franchising business, the Roni Deutch Tax Center, has helped Americans successfully open and operate their own tax preparation businesses since opening its own doors. Everywhere I go people always ask me advice on how they too can become an entrepreneur, and to help all of you looking for some advice on the topic I have put together the following list of tips for any one hoping to open a business in today’s economy.
1. Business Plan
No matter what sort of business you are starting, even if it is a franchise concept, a well-written business plan is a must. It should outline the details of your start-up plan, and contain a detailed outline of your projected first year or two in business. It should include estimates of all costs related to your business, and how you plan to turn a profit. Preparing an in-depth business plan is one of the most important first steps you can take on your journey, but putting one together is much easier said then done. If you are new to business then you might want to check out a few books on the topic, or even take a business class at a local community college.
2. Know your Market
Before you begin looking at locations for your business, you need to make sure you research the industry thoroughly. Are other similar concepts thriving or failing in the current economy? What are the average success rates? How can you make sure your business stands apart from the competition? These are all questions you should ask your self while researching your industry.
3. Put in the Time
Opening and growing a new business is no easy task, and once you commit to the concept you need to remember that it is going to take a lot of effort on your part. If you are used to working a regular eight-hour shift at your job, then you are going to be in for a big surprise. Even to this day, I still put in the occasional 12-hour workday. When it’s your business there is no time card to punch, and you need to be able to commit to putting in tons of time if you want your business to be a success.
4. Properly Calculate Costs
Before you purchase any expensive new equipment for your new business, you need to make sure you estimate all of the costs you are going to need to get your business off the ground. If you over spend in the first few weeks, then you may find yourself without enough money for rent a few months down the line.
5. Start at Home
If you are hoping to open a business that does not require your clients to come in to your store or office, then consider starting a home business. Without having to pay rent for an office you can save money, and you might also be able to qualify to claim a home office deduction. It may not be as grand as renting out a high-rise office, but it will help cut costs and allow you to expand in the future. Eighteen years ago I started my law firm as a home based business and today it is the largest law firm in the nation of it’s kind.
6. Take your Time with Loans
Getting a small start-up loan is not uncommon, but you want to be sure and take your time before signing any papers. You will want to wait until you have a complete business plan so that you do not underestimate your total costs. Additionally, you might even qualify for a small business grant that can help reduce the amount you need to borrow.
7. Hire in Steps
Hiring a full work force before you even open your front door is almost always a bad idea. Although you do not want to get caught off guard with an insufficient working force, having to pay employees who have nothing to do can quickly drain your bank account. Hire slowly to avoid taking on too much too soon. You could even hire independent contractors to help out until you have the need for a part or full time employee.
8. Pamper First Clients
Your first few customers are very important, and you will want to be sure to take extra special care of them. You should also feel free to ask them for feedback, and if they seem interested you can even request a testimonial about your product and/or services.
9. Wait to Incorporate
In getting your business off the ground, you need to make sure to never get ahead of yourself. Incorporating your business can be exciting, but it might not always be the best financial move for you. Stay small as long as you can, and before deciding to change your business structure make absolutely sure it will benefit you in the long run.
10. Always Look for Ways to Cut Costs
Opening a business in today’s economy is likely to be difficult, and my best advice for new entrepreneurs is to always be on the look out for ways to save money. When you book a hotel or business related travel, always ask for a discount. When you are looking to hire a contractor or make a large purchase, always do your research and get multiple estimates. If you commit to being frugal now, then it will help you expand and grow your business in the future.