By Kimberly Palmer
If you’re ready to get your business off the ground but aren’t quite sure where to start, here are five do’s and five don’ts, based on interviews with dozens of successful side business owners.
1. Make sure you’re ready.
Do you worry about losing your job? Do you wish you could earn more money? Is your full-time job and personal life stable enough that you can dedicate at least one to two hours a week to a new pursuit? If you answered “yes” to those questions, then it’s time to consider launching your own venture.
2. Choose the right business for you.
Side businesses generally fall into six primary categories: creating products, providing services, running a business, helping others, doing physical work and performing. Take time to do a self-assessment of your own talents, interests and skills to see what might work best for you, and where you’re most likely to find customers.
3. Get on top of your financial life.
Review your finances, playing special attention to any weak spots. Do you need to focus on scaling back spending or paying off debt? Do you have an emergency savings account with at least three months worth of expenses? Getting your finances in order before launching a new venture will make it easier to focus and build your business. When you start earning money from your venture, use it to bolster your savings account, and be sure to track any related expenses carefully for tax purposes.
4. Find new friends who are also engaged in similar pursuits.
Start reading blogs or Web forums related to your business. Join a meetup.com group or online group of people who also do similar work. Create Twitter and other social media accounts to help make those connections. Retweet other people’s ideas, reply to their questions, “like” their Facebook pages and engage in back-and-forth. These new friends can be allies as you build your new business.
5. Promote your venture vigorously by blogging, tweeting and other online efforts.
Give yourself a social media makeover: Dedicate five to 10 minutes a day to sending relevant tweets or other messages via social media. On your profiles on social media accounts, describe yourself in terms of your new business identity to help spread the word about what you’re offering. Your first clients are likely to be friends and acquaintances who know you.
6. Wait too long to launch.
Many entrepreneurs find their business ventures almost by accident; a friend asked them for a favor, and suddenly they were in the floral business or running a social marketing consultancy or pet-sitting. Instead of slowing down and first building a Facebook page or stocking up on inventory, they said “yes” to the opportunity in front of them, and their business grew from there.
7. Let the first failure stop your progress.
Entrepreneurs almost always face setbacks: a pitch gets rejected, a client gives negative feedback or a new digital product flops. But they keep going, because they know that one rejection doesn’t mean their contributions are worthless. Instead, they take it as proof that they are trying something new and taking risks, some of which are bound to fail.
8. Think you’re earning too little to make a difference.
Many entrepreneurs make what seems like small amounts of cash on a weekly or monthly basis: $100 to $200 a month, or just a few thousand dollars a year. But not only does that money add up over time – $3,000 a year equals around $40,000 after 10 years if it’s in an account earning 5 percent interest – it also represents new possibilities in the event of a layoff. An income of $200 a month, earned from working a few hours a week, can often be scaled up dramatically if time allows. Even microbusinesses represent new opportunities and potential.
9. Overinvest in startup costs.
It’s easy to plow savings into a new business before it’s even launched: a beautiful website, a professional marketing plan, trips to conferences and new certifications. But before investing a cent, successful entrepreneurs often first look for ways to bring in revenue to offset those costs, while simultaneously testing the market. That might mean offering nutrition consulting services before setting up a new website, or selling an e-book through Amazon or another existing e-commerce channel before printing paperback versions.
10. Work too hard for too little.
When entrepreneurs are first starting out, they sometimes make the mistake of undercharging for their services, or setting up a business model that would require a 100-hour-a-week schedule to earn a living wage. A classic example is selling a handcrafted crocheted sweater for the same price as a store-bought, machine-produced one. Simply charging more for products and services can signal quality to potential buyers. Testing the market to see what it can bear, and checking out competitors’ prices, can help entrepreneurs avoid starting too low.