Starting a business? Where to start

Before you start anything, grab a notebook or 3. This will become your business bible. Take notes of EVERYTHING - brainstorm ideas, costs, goals, research, etc. Keep this with you at all times. I keep a small notebook next to my bed. You never know when an idea will hit. If you must, keep a small notebook and pen in the bathroom, on the fridge, next to the tv remote. Ideas come at all hours of the day so don't trust that you will remember them. Jot them down while they are flowing. Make the most of the idea machine before it runs out of gas.

Something to think about before starting a business is why are you starting a business? Know why you are starting a business and always remind yourself of why. If you want to be rich, write it down. This is where you need to be honest with yourself. Lying to yourself will only hurt yourself here. Don't worry about how selfish your reasons are. Just know what they are.

Now lets get down to reality. Owning our own business sounds glamorous but there is a lot of hard work behind the scenes nobody sees. Are you ready? Lets see how ready you are:

How organized are you? Can create and stick with a schedule? How are you with your bills? Are you always on top of them? What about your checkbook? Is this always balanced and you know where every dollar is going? Can you keep track of others and know what others are doing at every moment of the day? If you can't say yes to all of these, what are you plans to correct it so you can say yes? Remember that notebook? This is where you need to be writing things down.

How driven and motivated are you? If you have ever worked outside of the home, when was the last time you worked overtime? Could you do that for the next 6 months without a day off? Can you work upwards of 14, 16, 18 hours a day. Are you willing to give up your soaps and talk shows for your success? This sounds extreme but this is the realistic side of owning your own business. You will be working non-stop from morning til night. The days can be long and tiring. This may not last forever but you need to be prepared for this.

How flexible are you? No I am not asking if you have what it takes to join the local acrobat team. Can you and are you willing to change gears at any point in the day? Can you get back on track when your day has been turned upside down? Things happen and this is a necessity that cannot wait until you are ready. There are times you will need to drop everything and move to something else then move back again. As a work at home mom, this is not a what if. This will happen.

Can you make a decision? Now before you say yes keep this in mind - your best friend of 20 yrs orders that new and fabulous one of a kind shawl that is certain to become an heirloom for someone. Being your friend she wants to only pay 50% of your retail cost. As your friend you want to grant her the price but business wise you could be losing out on money. Can you say no and negotiate a higher price that may upset her? Of course you never want to upset your best friend but this is business and you need to protect your business. Sometimes you will have to make a decision that can make you unpopular. We will talk about negotiating later but for now we are just talking about those difficult decisions that sometimes have to be made.

Now you know you can do this, so how do you plan to sell your product? What I mean is will these be available online, in a store, at parties, door to door, by phone, auction, flea market, etc. Lets say you plan to sell your products online. Have you found a web host? Here I caution you DO NOT use a free site for a fully functioning ecommerce business. You want to be taken seriously here. A free site sounds great but don't forget there are several low cost hosts out there and you can even pay by the month. There are many low cost templates out there so don't feel you are limited. You don't have to be a computer geek to have an amazing, low cost site. Look at hosts such as http://thedesignshoppe.com/ and http://wahmshoppes.com/. These are just examples of some great hosts out there. Don't let your frugalness get in the way of being cheap. There are plans out there for every budget so owning an online site with a host does not have to cost more than your mortgage.

I know many will say a free site is just fine and mostly you will hear this from other work at home moms. You are not just targeting work at home moms like yourself. You are targeting a large array of people looking for quality products, quality customer service, by a quality company. A professional image is important to your success. With so many fly by night scams out there, you want your customers to see that you are sticking around and you have fully emersed yourself in your business. This is not to say a free site is a bad omen and never trust a soul. I am just saying you need to think long and hard about this. Free sites have urls that are difficult to remember and can give the impression of being very amateurish. You can also be limited on the look of your site and end up with a site that looks like everyone elses out there. These are things you do not want. You want to be remembered and you want to appear professional and be someone everyone feels comfortable dealing with. You need to stand out here. You want people to remember you when they need your product not struggle to remember who you were and end up at someone elses site.

We are now at the part where many get lost and often forget. This is how will you make money. The answer seems simple right? I will sell such and such product. Of course you will but its more than adding a number and making it work. You need to know how much it cost to make the individual product you are selling. This is just supply cost. We will talk operation cost in a moment. If you know it costs you $100 to buy the supplies needed to make your pencil boxes but how many pencil boxes are you making. If you make 100 that breaks down to $1 each. Are you including all your costs? Make sure you are listing everything that goes into the production of that product.

You also need to decide are their any other ways you will be making money with your business. Explore all aspects of your business - workshop fees, bulk prices, subscriptions fees, setup fees, handling charges, or anything else besides just the product in which you plan to make money. You need to know all of these so jot these down in that business bible.

Something many forget in their business figures in pricing products is costs outside of supplies for your products. This includes that paper you use to print and invoice, ink to print that invoice on that paper, tape to close and secure those boxes, boxes to ship your products, a scale to weigh your items, costs to get those production supplies (shipping to you from suppliers, gas to pick up supplies, etc), internet service, phone for business calls, payment processing fees, bank fees, folders to keep orders straight, that new file cabinet, the calendar to schedule appointments, and so forth. These all need to be figured into your operation costs. Operation costs need to be factored into your price. Some of these seem minor but they will certainly affect your profit margin. Still remember that notebook we talked about earlier? Are you taking notes? If you not start writing.

You have your initial costs written down so lets start talking what it will take to get started. Remember that old adage it takes money to make money. No matter how hard we try to not spend any money to make money, you will end up doing it anyways so you might as well face it. I recommend saving 3 months worth of costs to start your business. It is also recommended you buffer that figure for unexpected costs. Things happen and you don't want to be unprepared for them. Add as much as you can. I suggest anywhere from 20% to a full month of costs. Lets say to run your business it costs $20 a month. Multiply that by 3 and you get $60. Add on that extra 20% which is $12. To begin you need $72. Remember this is an example only. Your actual figures can be more or less. Now 3 months can seem like a lot of money when you look at those figures during these hard times but you do not want to start a business that you can't support in the beginning only for it to close before it really had a chance to get a running start. If you can't get enough for 3 months, save no less than the first month and that buffer.

Your ideas have been refined and you are ready to start. Get that task list written and begin implementing what you have been working so hard on. Let those goals remind and guide you everyday. Look over them frequently and revise anything you need to. Focus on those goals as these are the keys to your business and your success.

Here's to your success!

Olivia Vidal
© Copyright 2008