Keep overheads low – This is one of the most important rules to follow for most small businesses. Unless you are a Silicon Valley start-up, with masses of funding, money will be tight at first. Most entrepreneurs put their life on the line here -investing in themselves, by using credit cards, or their homes as surety.
Remember the statistics we looked at about business failure? Many of them fail because of lack of funding. Keep your overheads tight and protect your cash flow.
Staff or contractors
It is likely that at some point you may need assistance in the business. There are many pros and cons to employing staff. This will very much depend on the type of business that you have. A rapidly increasing trend is to take people on as subcontractors rather than staff. This merits a section of its own, so I will revisit it later in this module. Suffice to say for now, I would avoid taking on staff in the very early stages, until you have established the business a little. This is for a number of reasons, the most significant of which is keeping the overhead as low as possible.
Don’t open an office
Not for vanity anyway. You can probably work from home to begin with. Even Microsoft started in Bill Gates garage.
Don’t forget to think about protecting the Intellectual Property in your business. This is a topic in its own right too, but briefly you need to know how to protect your idea, whether it’s an invention or a brand name. You need to know about patents, trademarks, copyright and registered designs.
You can find out a lot about this online, and that can save you a lot of money.
This is a very effective way of supporting a new business, word of mouth referral is very important. There are other advantages as well. A strong network can offer you mentoring, formally or informally, allowing you to get a lot of advice from other members. More about this later.
Choose your business name carefully
It needs to describe your company in a few words, be easy to remember, easy to pronounce and easy to spell. Its good if it is also witty and catchy. You need to find a suitable available web domain name. You must check there are not any similar business names and similar domain names
Don’t go on a business course run by a talker.
Follow a doer. Someone who has a successful track record.
Book learning and theory are one thing, doing it is another. So, while it is a great idea to read lots of business books to ensure you grow your knowledge, sometimes you just need a little very simple low level advice from someone who has been there and done that.
Keep an eagle eye on your competition
Knowing what your competitors are up to can be the key to keeping your business alive. You must understand and experience firsthand their products and services, and know what value added benefits they are providing their customers. Your objective is to grow your business by taking away their customers.
You need to understand your customer and what your product or service can do for them, what owning your product will give them.
Think about what is in it for your customers long term, not what profit you can make out of them short term.