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© 1996 Frank E. Fogg - All Rights Reserved
Every year thousands of Americans start their own business. Some just desire a part-time second income while others hope to expand their businesses to full time positions. The downsizing and outplacing in recent years has also forced many long time employees into home businesses and consulting while searching for another job. There are many benefits to starting your own business. The major advantage of running your own business is control. The business can be as small as desired or can be allowed to grow. It can be part-time or full-time. The business can be continued, discontinued or sold depending on your needs. Students and homemakers can arrange their work around busy schedules. Full time wage earners can use weekends and evenings to earn a second income. Another benefit is satisfaction. Life experiences can be used to your advantage in choosing a business and managing the day to day operations. You make the decisions and reap the full benefit of your work. Some types of businesses are not practical for the beginner. Many industries require a large amount of money and equipment to start operations. A shop, factory, office or storefront must be found. Machinery and equipment must be purchased. People must be hired to form the organization. The purpose of this book is to provide ideas for small companies that can be formed using things that you may already have at home Most of these businesses can be started right in the home. All can be started and run by one person. We will start off with some general hints about planning and starting your business and then look at some specific business ideas that are either unusual or can be started with very little investment.
There are many benefits to starting and operating your own small business. You can choose to do something that you like. You can set your own working hours and use your life experiences to get more fulfillment from your day's work. You may decide to select a business that is currently a hobby for you, changing something that is fun into a profitable enterprise. There are also tax benefits associated with operating a business. Much of the expense of starting and operating your company can be deducted from your income tax. The cost of operating a car or truck, part of the home rent or mortgage, and the cost of goods and supplies used by you may all be deductible. Of course, one main advantage of your own small business is that you get to enjoy all of the profits. A portion of earnings can be set aside using a variety of self-employed retirement plans. Early retirement may also be possible with the additional income received in this way. If your company grows, you may have the opportunity to sell it later for a substantial profit.
The most important thing to do before starting your own business is to get as much information as possible. Most information is free, but mistakes can be very costly. There are a number of groups and organizations that will be happy to give you important advice on starting your own business. A universe of knowledge is available via the World Wide Web including powerful database search engines that help you to pinpoint specific information you need. There are several methods you can use to organize your information as it is developed. Use a filing cabinet or box separated by subject area to organize books, magazines and pamphlets for use at a later date. Save magazine and newspaper ads, summaries of telephone calls and conversations, and other small items on index cards. Carry a day planner or organizer to record important telephone numbers and addresses and plan appointments. Local Trade Organizations and Chambers of Commerce are one good source of information about starting your business. Books and pamphlets are available that give specific advice about business opportunities and regulations in your area. Tax registration, financing, business organization, and sources of help are just a few of the topics covered. Membership in some of these groups may also offer additional benefits including insurance and trade or group discounts with local merchants. The Internal Revenue Service provides information about small businesses upon request. They offer hundreds of publications free of charge that explain all aspects of the tax code in plain language. The publications that are designed to provide information for small business owners include:
Almost all companies need to obtain financing at some time. The S.B.A. (Small Business Administration) is a government agency formed to promote small business. They assist the owner in obtaining commercial financing to start and expand a business. In addition to helping entrepreneurs gain financing, they also offer programs that teach small business owners valuable management skills. Special programs to assist minorities and women are also available. Contact your local office to obtain more information. Your local City Hall is also a good place to start obtaining information about business in your area. They will be familiar with special regulations and taxation in your area for the type of company you are considering. They may also provide references to groups or retired executives in your area that can provide valuable advice on starting and managing your company. Business and management seminars are a valuable tool for developing management skills. These seminars are offered by experts from the business community and cover virtually all topics you will need to know to start and manage your company. Some seminars will cover basic management skills while others will focus on more specific topics such as:
An additional advantage of attending seminars is meeting other businesspersons and developing contacts. Most of these entrepreneurs will be happy to talk about their companies with you and long-term business relationships can be developed. The local library is another valuable source of free information. Books and magazines are available about any subject. General advice about starting your business is available in books. Some libraries offer cassette tapes or video recordings on this subject as well. Magazines provide the most current news about industry advances, trends and changes. Friends, co-workers and other business owners can also be good sources of information about starting a business. They may have started and operated a business and can relate personal experiences about the benefits and problems they encountered.
Every new business will need a strategy to succeed. Now that all of the information has been collected it is time to proceed with planning to make your company successful. People will choose a particular product or service over another for a variety of reasons. Understanding why they do this is important to develop a successful business plan. Advertising is the first reason people will buy your product or service. The customer cannot buy from you if they do not know you are there or what you offer. Plan advertising so that it clearly shows what you have to sell. Complex words create confusion so avoid them. Focus on a few major features of your business that are likely to generate customer interest. A successful advertising strategy will create the desire for people to buy your product. Price is the second reason people will buy your product or service. "Lowballing," setting an artificially low price, will not always motivate the customer to buy from you. Most customers will want to feel that they have received good value. A price at market rates combined with good quality or service will satisfy this requirement. Prices that are too low can also give the impression of poor quality. Product features is the third reason customers will be interested in buying from you. They will be interested in looking at the differences between your products or services and those offered by your competition. Making the product better, easier to use or different than others will increase its value to the customer. Distribution is the final area where a competitive advantage is possible. Making the product or service readily available to customers is important. Several strategies can be used to take advantage of this. Locate your business close to your intended customer base. Provide service or delivery directly to the buyer's home or business. Provide service during the evenings or on weekends when other businesses are closed. It is important that the customer can buy from your company easily and when they want. Decide who your company's intended customers will be. This is called a "Target Market." Depending on the type of business you are planning to start, your target markets may include:
Narrowing your target market depends on what you are offering. Some examples of narrowing your target market include businesses that are minority owned and elderly homeowners. Now your efforts can be focused on addressing that particular group. Attempt to answer these questions:
One way to develop a strategy to satisfy your target market is examine the strategy that other companies are using. Look at each competitor's advertising, then attempt to answer these questions:
Established companies that are successful have already discovered by trial and error what strategies work for satisfying their customers. The strategy can be modified to take advantage of opportunities that the competitors have missed.
You've collected enough information to fill a warehouse, made the decision about the product or service you are going to offer, researched your competition and developed a strategy. It is time to start making money. Now what? Most of the businesses in this book can be started with little or no investment, however there are several sources to obtain money to get your business started. A loan can be obtained from a bank, savings and loan or credit union. Personal credit cards are another immediate source of start-up capital. Family and friends may also lend small amounts to get you started. Many companies offer credit terms to their business customers with payments due within 30 days. Always ask suppliers to open an account for you since this is a good way to develop your business credit history. Make arrangements to be available to your customers. Add call waiting or a second telephone line so that customers may call. Purchase an answering machine to take calls while you are away. If your business requires you to be away from the office, consider a paging service or cellular telephone. A fax machine may also be useful if your customers are other businesses. Keep paper and a pen by the telephone at all times. Advertise as soon and as often as possible. If your budget is small, consider referrals by friends, telephone solicitation and press releases to start. Purchase business cards and distribute them at every opportunity. Have your cards printed with your picture so customers will remember you later. Place small ads in local newspapers and magazines. A one line listing in the yellow pages is usually included with business telephone service. Call your local cable television station and check the rates for advertising on the local access channel. Create a small 8-1/2 x 11 flyer and deliver it door to door. This type of advertising costs only pennies per contact. Local business shows are an ideal way to meet new customers and deliver literature directly to potential buyers. Consider mailing your flyer if your targets are businesses. Computers offer another potential advertising media. Place advertising with on-line BBS systems and on Internet whenever possible. Other companies may be willing to offer your product or service to complement their product line. Inquire about this opportunity with your vendors and customers.
There are several major strategies to optimize your earnings in a small sole-proprietorship. Remember that the customer is always right. Many starting businesses will have just a few customers to start. Always attempt to keep your existing customer base. Attempt to please them but be firm. One method to maximize you customers' satisfaction is to remember them at holidays. Mail Christmas and Hanukkah cards thanking them for their support of your company. The expense of this type of customer contact will pay for itself in cementing the business relationship. Don't forget to contact your customers on a regular basis. Check for additional needs and wants. Customers are the best source of suggestions to improve your organization and product line. A simple telephone call or post card is sufficient to accomplish this goal.
It is vital to save some of the profits of your business. Many small businesses will have slow periods or may be seasonal. Money will be needed at year end to satisfy tax requirements. Establish a savings account early and deposit regularly. You must also consider saving for retirement if your small company is your only source of income. Establish an IRA or a qualified retirement plan. In addition to providing income in your retirement, these plans will also allow you to attract better employees as your organization grows.
Don't expect immediate results from your business. Most companies will require time to grow and prosper. It is easy to become discouraged. If things do not seem to be going right, review your strategy. Which forms of advertising seemed to attract customers? Did customers seem satisfied with the product or service? Were there complaints about the price or quality? Did the customers receive their order in a reasonable time period? Modify your plan to maximize your customer contact and satisfaction. Make sure your quotes and sales are always in writing. This helps to reduce misunderstandings and may even be required depending on the type and size of the sale. Legal problems will be reduced as well. Standard contract blanks, invoices, statements and quotes are available from office supply companies and many department stores.
Here are some ideas for small businesses you can start for little or no cost. The target market, advertising media, equipment required and marketing strategy are provided in outline form for each idea. Included are some ideas for those who already own a computer.
Attend musician nights and concerts, contact band during breaks. Commissions for bookings should be paid in advance.
Consider selling complimentary items during initial contact or visit:
Specialize or diversify to be noticed. Consider offering some combination of specialty menus:
Try to purchase items at discount by shopping at:
Clean, repair and package the collectibles to maximize their value.
Pricing can include a registration fee, hourly charges, mileage, a flat rate in service area or per week, or a combination of these based upon the services offered.
Advertise to assist in planning: Birthdays, children's parties, carnivals, weddings and receptions, and business outings.
Offer pickup and delivery to the customer's home or business.
Generate summary graphs and charts or rank the information on criteria.
Coordinate with area daycare providers to offer discount coupons and other incentive offers. Generate a mailing list from your customer base to sell to other companies that manufacture items for infants and toddlers.
Offer discount coupons for Veterinarians, pet stores, etc. Consider combining this service with house-sitting or mailbox receiving.
Hire subcontractors to perform some work. Charge customers on a monthly basis including commissions for leasing new tenants.
Types of instruction may include:
Offer special packages for club fund-raisers that allow a portion of the proceeds to be retained by the organization.
Complimentary services include tape duplicating and equipment rental or repair
BUSINESS STARTUP IDEAS USING A COMPUTER
Offer hourly rates for training and extended term packages for support.
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Target Market -- Automobile, truck and RV owners
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