Many people think that going into business will change their life for the better yet come to find out that it is hard work, long hours and sleepless nights.
That is true in some many cases and why more businesses fail as opposed to make it when the business owner underestimates what is required and when they find out they do not bother going the full route and making the business what it should be.
Also, many people choose a business solely on what they think will be good without doing any market research, any due diligence on how successful that kind of business would be and without realizing that there may be a business plan they can work off of instead of creating one from scratch. A business plan is vital to getting a new business up and off the ground and although you need one specific to your business there are tons of them out there that are in place that you can buy and adjust.
Nothing better than taking the base and building on it to save time and money plus it gives you some thoughts and ideas that you may not have had already.
Another way to go about starting a new business is buying a business in a box. That is essentially a product that will offer you all the things you need from soup to nuts. It will come with a business plan, a proforma, supplier information as well as how to build your business to make you successful. You can deviate from the plans of course and you can find additional or better suppliers but that is a great jumping off point.
Many come with all the legal forms for you as well as employment contracts if that is something one would need for their business. It is a great way to start your small business as 90% of the ideas and due diligence is done for you. Of course you will have to pay for the service and do your own branding using a service like this one as there are things one must do once they buy their business in a box.
The success rate goes way up when you are buying a proven business idea as you can see by the success of McDonalds, Burger King, Walmart, Home Depot and a slew of other businesses. Also, there are a ton of smaller businesses that operate the same way with similar success ratios such as Chem-dry, Jazzersize, Jan-Pro, Dream Vacations, Superglass Windshield Repair and many more. Some you may have never heard of and would be absolutely surprised that there are business such as that which you can get into for a very small amount of money with a high opportunity for success.
A franchise will hold your hand all the way from the day you sign on and write your check, help you choose a site, give you the best plans for your interior renovations and build out and will help you out after you get going. Of course you will pay something to them up front and something on a regular basis in terms of a royalty but it is almost like paying for an on going consultant and often the best way to go if you are needing that kind of help over time.
You do not need to buy a business in a box or even a franchise at all and can still be very successful in business. After all, the Business in a Box Seller and the Franchise Seller probably did that and found ways to success. You will still need to prepare a business plan, proforma, get your finances in order and study the demographics but it certainly can be done.
Take the case of the man who opened a toy and hobby shop in New Jersey. His business ownership experience was limited but he saw a need as there were no other ones in his town or the adjacent towns either. The community had a younger age base with lots of schools and there was a fair amount of tourist traffic during the summer season.
The only other places that sold some of what he would carry were a small pharmacy and a hardware store so there was no specialty store around and that gave him reason to consider the business opportunity.
With some savings and a small loan he started that business after putting all the factors together and did well until he sold it close to 20 years later to retire. Many others do the same thing in various industries; restaurants, landscaping companies, tree services, automobile repair shops… the list goes on and on.
Many of those are quite successful and have not paid for the knowledge other than their time and maybe a trip to an accountant to set up the business books properly.
The work involved in choosing your new business venture is as important as the work you do once you make that choice. Too many people see one thing, hop on it and then fail to do any due diligence and end up failing in business.
Nobody wants that.
What we want to see is someone that has done a terrific amount of due diligence, finds a business model and a business that would work for them and then pursues that business opportunity with passion. That will create a nice lifestyle for the business owner and hopefully jobs for those that can be employed. In all reality this is the perfect trickle down economic opportunity and trumps almost any other way to build the economy.
So, what does Due Diligence actually involve?
Your business plan is the spine of your new business and it covers how you will set things up, where you will source your products (you make money buying properly, not selling), your sales strategy, a description of your business (you’ll learn a ton just writing that), your finances of course, your business management/organizational chart and your financial projections.
Take your time putting that together properly will give you more focus than you can imagine and, although it could drag into weeks doing it properly, that may just cause your business to be wildly successful or help you pivot to one that would be.
First thing you want to do is check the demographics. If there is nobody to sell to or if the general population in your area is not the type of people who would frequent your business you are wasting your time with that business idea and either need to choose a new business idea or a different location. You may think you can sell ice to Eskimos but that is not going to make you a solid sustainable business.
Be sure that the community in which you are going to operate your brick and mortar business is one that would embrace your products and services.
If you don’t have the required money, or can get your hands on it via a loan or investor, then you need to stay at your nine to five. Even if you can borrow it that may not be the best idea as loan payments can cut into cash flow and shut you down in a New York minute. Investors may also be a millstone around your neck if you have to give up too much to get your business up and running.
You will also need cash put away so you can pay your normal and customary living expenses as you will probably not be financially stable from your new business inside of at least a few months and in all probably at least six months. Consider that aspect as that is one of the main reasons small businesses fail; no money for the owner to pay his personal household bills due to overly enthusiastic projections.
Of course there are ways to start a business with no money.
One of the keys in any business is sourcing or finding the best vendors so you can resell at a decent profit. You do not make your money selling but rather buying right. The best products are not always the least expensive as you could end up with junk and develop a bad business reputation. On the other hand if what you are offering is of such high quality it is too costly you won’t sell enough to keep the doors open.
There is real work in finding the right suppliers so taking the time to see the products, interview those on the selling and and any managerial types you can contact, seeing how things would get shipped to you as well as making sure the packaging is attractive are all part of the process when you are sourcing.
Do not skimp on that aspect of your planning or you will almost certainly be sorry.
Did you ever wonder why milk is in the back of the grocery store? It is because it is a product that is used by most households and if you are going to purchase it you have to walk past a whole bunch of other food that may entice you to buy.
Setting up your store should not be much different. Put the products that are in high demand near the back of the store so people are going to have to walk past a bunch of other products and, if possible, make those products ancillary products. Your average ticket should go up and that means you will be making more money from the same customer. You will need to do some testing to see what ends up working best but that is an essential part of making your business more solid than just putting things out willy-nilly with no regard as to the flow of your products.
You may be a one man show or you could have a dozen people right off working for you. Either way you will want to put together an organizational chart so you know who is responsible for what. Even a one man show is going to need that so you can put in writing who you call for what, when you need to bring your books to your bookkeeper… even something as small as making sure you have your landlord’s phone number handy so you can call if you have a need.
If you have multiple people it gets a bit more complicated as you will need to lay out what each person does and how they do it and what process you use for reporting to the owner or the process for the owner to check the work. Delegation without follow up is irresponsible and can cause real issues in your business.
Clearly we did not cover all bases here but did lay out a general outline for you to be able to get the ball rolling should you decide you want to be the next successful entrepreneur in your area. The amount of work involved cannot be covered in just a couple thousand words and cannot be explained in just one setting.
As you delve into business ownership you will come across tangents that you will need to address and those tangents will likely produce more tangents. All that is actually a good thing as the more you uncover that has to be done so you are successful the more chance you have of becoming successful in your new business.
Take your time, look under the rocks as you investigate, walk through similar businesses in various areas and get a real feel for the industry and if you do that you’ll be well seasoned to be able to attack that new venture and end up on the cover or Entrepreneur Magazine!