Eight Tips to Setting up your Small Business

“Are you Crazy!?” are the exact words that came from my wife’s mouth when I told her that I wrote a business plan to start a Martial Arts School. She was reacting to me telling her that we would require about $50,000 for start up costs and the first few months of operating costs. Back to the drawing board, I went. I tweaked my plan so that we were able to start on less than a $1000. In less than 4 years, our business grew to a six figures income.

In those first three years of operation, I learned many important lessons that drove our business to success. Here’s some tips to setting up your small business.

Eight Tips to Setting up your Small Business

1. Start small first - . Most people dream of that cushy retail spot with plenty of space that will bring in many walk-by customers. Beware… a prime retail spot comes with a huge price tag, think small at first. Ask yourself, “What is the quickest way to make money?” For example, my original plan calculated the cost for a prime retail spot. Instead, I found an alternate location at a church auditorium. This decision suddenly made starting a martial arts school affordable because the monthly rent was ten times less than a retail spot.

Starting small had many advantages, too - It provided us time to build better systems, find a niche, grow our customer base, and create an income stream to reinvest in the business without the risk. Yes, after a year, we got that retail spot but only after our idea proved itself and we earned enough capital to move without worries.

2. Create a detail plan – Most people ignore creating a detail plan in favor of just starting the business. A detail plan will help you identify a niche and determine how you will get customers in your door. Ask, “How is my business different then the competition?” and “What methods will I use to get customer in the doors?”

Your plan should detail your break-even point. The break-even point is the amount of money required to stay in business. Brainstorm on how you will meet this break-even amount.

3. Get professional advice - Before you open your door for business, seek the advice from a qualified accountant and lawyer. Your accountant and lawyer will become important members of your team to help you reach your business goals, assess risk, and hold you accountable.

4. Find a niche - You definitely do not want as Dan Kennedy says, “to roll around in the mud with Wal-Mart competing for the lowest price” This is a losing strategy for any business instead look for a niche – a special area that has little or no competition. A niche market resonates with specific customers – they want your product or service because it’s special – different. Niche markets enable you to charge a premium for your product or service, therefore maximizing your business revenue.

5. Market like crazy – Don’t let anyone come within 5 feet of you without telling them about your business. Constantly, paint a picture of the benefits of what you offer. Along with traditional marketing – flyers, ads, and mailers, the best marketing for small businesses comes through referrals and networking. Building referrals systems will assist in your businesses grow exponentially. Prospects referred from existing customers will purchase more and give less price resistance because their friend sold them on your business before even walking through the door.

6. Test your idea – Put your product or service in the market on a limited time basis. You could mail a simple test advertisement, set up a table at convention or festival, or offer it through a website. Stimulating interest in this way will provide valuable feedback so that you can tweak your product or service to fit with the public demand.

7. System driven business – Once your business is up and running, focus on creating a system driven business. Michael Gerber’s states in his book, The E-myth, that most business owners are technicians that one day suffers an “entrepreneurial seizure”. Instead of thinking about technical part of doing the job, build systems to drive the business. How will you greet the customer? What do you say when you answer the phone? What is your system of creating referrals and repeat business? What is your sales presentation? Every aspect of your business needs to be a written down procedure that you and employees follow consistently. The system can change but test each change and measure the results. With excellent systems, customer will applaud your efforts and you will save time to spend on the most important activities in the business.

8. Become the Obvious Expert – Do you want customers to flock to your business? Yes. Then work on becoming the obvious expert in your field. There are many methods of becoming the obvious expert. Here’s some quick ideas for you to boost your status to the obvious expert - writing article for newspapers, create a blog, give free talks and seminars, provide valuable free resources on a website, or publish a book or e-book

With a little brainstorming and perspiration, you can start your own small business. If you play it smart, you too can start your successful small business with little or no capital.