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I get a lot of questions about opening a business and what needs to be done to do so. I realize most people want to start a business but have no idea what to start. On that point I cannot help you, however I can give you tips on what to do once you have a basic idea of what you want to do. I decided to give you ten easy steps on what to think about when you want to start your own business.
1-Service or product?
The first question you need to ask yourself is pretty simple. Do you want to sell a product or a service?
– Service: If you want to provide a service you need to look around you and fulfill a need. Is there something in your city or neighborhood that goes unattended. ( dog grooming service, kindergarten ) A service doesn’t require you to sell any product, normally the initial investment will only be your time, marketing and anything related to providing that service.
– Product: If you want to sell a product you need to find something that has a demand. Are you an artistic person and can create art you can sell? Do you have access to a product that you can sell at a lower cost than the competition. Do you have family abroad that can import the product from their country and sell it ? The main cost related to this type of business is the product itself.
2- How are you going to sell your service/product?
The second important thing to ask yourself is how will you sell your product/service? If it’s a product do you know any store owner that can sell it? Will you open your own store or use the internet to sell what you need? For a service you need to ask yourself this question: how will people needing your service find you? Place adds in the paper? Word of mouth?
3- Start small
Think big, but start small. Don’t spend all your money right away, it’s very rare a business makes a profit the first year. It’s normal if it takes time to get people to know you and most importantly trust you. When I first started my business, I lost some future customers because they wanted to do business with a company that had a few years of experience. The good news is that not everyone requires this.
4- Keep recurring expenses to the lowest
Try to keep your monthly recurring fees as low as possible. This is important because even when you are making money, monthly recurring fees come each month and at the end of the year a few hundred dollars a month ends up being thousands of dollars. For a service try to get the lowest fees on your business line (get VoIP lines) and start your office in your home. I can’t stress enough the fact that saving every dime is important. This bring me to point five.
5- Negotiate everything you buy
Business is not like personal spending, everything is negotiable. If you are going to sell a product, each time your volume increases try to lower the price with your distributor. Margins are very important, the lower you buy something the more competitive you can be when you sell it, and you also make more profit when you get a sale. For a service the concept is a little different, of course try to get all the products, advertising and space (to offer your service) at the lowest price possible. The more you save the more money you put in your pockets at the end of the day.
6- Use and make some contacts
What makes a businessman successful is the people he knows, so the more contacts you have the better chances you have to succeed. Go meet other businessmen, tell them what you do and how they can make money with you. The bottom line is, everyone wants to make more money, so if you can convince them you are the person that can help them with that, they will work with you.
7- Learn how to sell
You can have the best product or service, however if you do not know how to sell it no one will ever know it exists. It’s very important that you figure out how to sell yourself and your product, because without that skill you are doing everything for nothing. I suggest to read simple books on a few tricks to gain people’s trust. You never sell a product, you always sell yourself so once you mastered that, your chances of success are more significant.
8- Offer some “freebie” to start and look for opportunities
Sometimes offering your services for free can bring you some business in the future. It’s important to be smart about who you deal with. Helping someone out that you believe has potential can, in the future, bring some business your way. It’s very important to trust your gut instinct and try to associate yourself with people that you believe in.
9- Find associates that can help you
We don’t know everything no matter how good we are. When running your own business there are many aspect you must master, and we can’t be good at all of them. It’s better to split $100 000 with a partner than $25 000 by yourself. Also by having a partner you can also split the workload.
10- Government grants
Free money is the best kind of money out there. The Government offers many different grants for starting a business, so I suggest to search on government websites for grants & special loans (such as interest-free loan or non refundable loans). Remember there are municipal, provincial (state) and federal government branches. Most of the time it’s free to apply for them, therefore you have nothing to lose. There are also some businesses that charge you a fee to look and apply on your behalf to government grants. I suggest to skip those type of offers and to do it yourself, it’s actually a lot easier than you think and you can use that money for other things.
I hope these few tricks can help you make better decisions in starting your business. When I think of this, I wish I knew these ten steps when I was 15 when I opened my first business. It would of saved me a lot of time (and errors). Good luck and feel free to ask me any questions you might have.