4 Rules to Understand Before Starting a Small Business

by Emily Guy Birken · 4 comments

My mother owned an art gallery for 4 decades. When she bought the business back in the 70s, she was a cocky 23-year-old who assumed that she knew what it took to be an art dealer, custom framer and small business owner because she had minored in Art History at college. Of course, life often has a way of humbling you, particularly if you own a small business. Mom made a lot of mistakes throughout the years, but she kept her gallery and has made it one of the premiere businesses in the area.

Her success made it clear to me that anyone with a vision and a great work ethic can make a small business work, but there are certainly some insights Mom wishes she knew since the beginning. It would have relieved some stress and made some decisions easier. If you are considering starting your own small business, here are the secrets my mother would share with you to keep you from repeating her mistakes:

1. Learn how to budget like a business. Even if you are a money savvy individual, budgeting for your business can have a steep learning curve. For one thing, budgets for small businesses have more variables than personal budgets — particularly when it comes to income. Your business budget is the main tool in your arsenal for helping you control your cash flow. It also pays to have contingency plans because situations outside of your control — like bad weather, for example — can affect your sales.

When it comes to budgeting for your business, it may make sense to spend money on an expert. An accountant can help you to determine how to identify and account for all the variables that will affect your budget. If an accountant isn’t included in your startup costs, find a class or a book that will teach you about the intricacies of budgeting for your business. You’ll be glad you armed yourself with knowledge ahead of time.

2. Make sure your marketing plan works for you. When starting a business, you probably know that you need to let your customers know you’re there. But it can be easy to waste time and money chasing your clients through advertising that doesn’t even reach them.

Savvy small business owners know their customers inside and out — and so should you. Sit down with a pen and paper and define exactly who your ideal customer would be. How old is she? What is her marital and family status? Who and what influences her decisions? How does she spend her free time? With the answers to these and any other questions that can help you to see your ideal customer in your mind, you’ll know where to find your customers and how to market to them.

And remember that marketing doesn’t just mean paid advertising. Some marketing costs money and some costs time. For instance, joining a marketing group like Le Tip or the Chamber of Commerce can help a fledgling business to make important contacts.

3. If you fail to plan, plan to fail. After the incredible amount of work necessary to set up and launch your business, it may seem like you can expect the place to go humming along without any extra effort. But that’s a great way to make sure your business fails. You need to keep the plans and great ideas coming. Without them, you’re not focused on the future of your business — which is something you always want to keep in the forefront of your mind.

4. Surround yourself with people you trust. Every business needs employees and service providers, and every businessperson needs supportive family and friends. Making sure that you have trustworthy individuals in each of these roles will allow you to focus on growing your business, rather than worrying about what your team is doing.

Unfortunately, this advice can be surprisingly difficult to follow. This is another reason why it makes sense to join a marketing group. Making friends and contacts with others who are working to make their businesses successful will give you opportunities to learn from them and get referrals so that it’s easier to build a trustworthy team.

Starting your own business may seem daunting, but it’s also an exhilarating way to build your career. Just make sure you enter into it with a clear plan and your eyes wide open. And a little cockiness never hurt any business owner.

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  • Slackerjo says:

    Create redundancy into your business setup. Have a plan B for everything. Make sure everything is backed up – files, internet connection, phone, travel, etc. If you are not very proficient with technology, spend a few hours learning to use a tool, device, or application before you attempt to use it for work. Yeah, you may have your own business, but you still have to do homework. Don’t wing it.

  • Travel Adviser says:

    If you live in an area that is subject to the rules and regulations of a homeowners’ or community association, check for restrictions. Find out what, if any restrictions exist on starting a small business in your home and how you might work within them before you invest one cent in your home business.

  • Jerry says:

    I think surrounding yourself with people you trust is some insurance that your business could survive. If you have investors who are also trusted individuals they may be able to help out if you get into trouble. You hope it may never lead to that but it’s good to have good people around you.

  • Marbella says:

    Hold on tight to the money you have, everyone wants to take your money when you are a beginner and promise you the moon. Buy second-hand furniture and office machines if you need it, buy in as little as possible when you order to your warehouse or store, do not buy large quantities just because you get a good discount, etc. There are lots of things you must consider when starting a business.

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