13 Questions to Ask Yourself - Is a Local Small Business Right for You
THINKING OF STARTING A LOCAL SMALL BUSINESS?
Make Sure You Have What it Takes!
Ok, so you have decided to start your own service business. You want to be a small business owner and more than likely, a local small business owner providing a service to the community. Before you jump in, it is time to ask yourself these 13 questions before you start your new business.
Depending on your background, you may have had more exposure to these 13 questions we are about to go over. Some of you may have little to no experience in regular business, never mind with a self-employed small business. Even if you have been part of corporate America or currently work in the industry you will be creating your small business in, life is very different on the other side. As we like to say, there is a big difference between working “in” your business vs working “on” your business.
So please step back and ask yourself these questions:
1. Do you like People?
Sounds like a silly question. But it is quite simple actually. The reality is, some of you really don’t like working with the public. For most of you, if you do not enjoy working with the public then STOP here. Do not pass go, do not collect $200.
The reality is, if your new small business will have you dealing with other people there is no way you can get around dealing with the public. You may not need to love them but at a minimum, you must love to help people solve their problems. It isn’t enough to love what you do. This takes us to #2…
2. Do you have thick skin?
You will need it! People get upset. Many times for a good reason and sometimes that is how they are wired. Your goal is to minimize the yelling or how long they remain upset. A wise person early in my customer service career told me that people are upset with the problem 9 times out of 10. The key is, can you keep your focus on resolving their issue so they will calm down and see you are trying to help? This will also help you increase your odds dramatically of keeping them as a customer/client.
You will also have critics. Some of these critics might even be your family and friends. You will make mistakes and you will be called out on those mistakes. You must remember that business is business and you can’t take criticism or feedback personally. You need to be a duck.
3. Do you embrace and believe in Great Customer Service?
I cannot stress this one enough on how critical this one will be to the success of your new small business, especially if it is a service business!!
You will be in the Service business and you will happen to do X, Y, or Z. Without customers you have no business. Take care of those customers, vendors, employees and you will have a profitable business for life!
This is different than the first question. You can not be a “people person” but still, be very customer service driven. I’ve known many people like this. They just believe strongly in getting and giving great service!
4. Are you willing to put in the time to do the research on your business?
If you think you can jump in with both feet and not hit the bottom of the pool you are being naive. You have a lot of homework to do before you even spend one penny on your business.
You need to spend some time with your best friend “Google” and start researching your new service business. What are the startup costs? What does your typical customer look like? What are their needs and how can you fill them? How much money can you make doing this? Is the business trending up or down? Does your community need someone like you doing this business? These are just a few of the questions you need to be asking yourself.
5. How well do you know your trade area?
While this one is part of question #4 it is important that you narrow down and know what your trade area is. If you plan on having a physical business, you will want to know where you plan to focus your attention and resources. Do you want to drive all over? Does it make financial sense to drive 20 miles? How about 50 miles or even 75 miles? Will you be focusing on your town or go outside the city limits?
Is there enough business? How many competitors are in your trade area? What do they do right? What do they do wrong? How will you compete?
6. Do you have a plan for living expenses while you get your business off the ground?
I don’t know about you but I like paying my bills and putting food on the table. I’ll assume you do to. Do you have a plan and the finances to get your business of the ground? If you think you can be profitable and make enough in 6 months, double it! Never count the money until you see it. If you do it in 6 months great! If not, you need a plan B.
Many small businesses disappear when the owner needs to seek out a “regular” job to makes ends meet. Life catches up and the dream dies.
Starting out part-time? This is actually a very smart idea! Just don’t “jump ship” until you are making in your small business enough to make that transition smooth or you have the funds for the next 6 months set aside.
7. Are you a self-starter?
This one can kill you. If you are like most folks, they have a boss and list of duties every day of what they need to accomplish. Many new entrepreneurs do not even realize how accustomed they are to a routine. Take away the routine and it is too easy to get distracted, head to the movies, play video games all day or hang out with your friends.
When you’re an entrepreneur you need to have a plan every day. You must learn the difference between working “in” your business and “on” your business. Most of you will be good at “doing” the business but will rarely work “on” the business and this will lead to your eventual failure.
That dreaded “time management” will come into play. Not a big fan of calendars and lists? Well, you will need to at minimum learn how to time block your activities because you cannot confuse being busy with being productive.
8. Do you get distracted easily?
Listen, I think most entrepreneurs love shiny things. “Look a kitty….”
We love ideas, we love coming up with new ways to do stuff. Face it, we get distracted easily. A great idea pops in our heads and we are off to the races. If you know this about yourself then you will need to recognize when you are doing it so you can get back on track. Have friends, mentors, etc that can help keep you focused. You will want a plan each morning on what you will accomplish.
9. Do you have enough funds to get your business up and running?
This one is different than question #6 and it is important that you know the difference. You can’t dip into one for the other. That’s right, you can’t use the family food money to buy those supplies. The kids need to eat.
Do you need equipment? Do you need marketing funds? Do you need anything special to do the new business? As part of your research on your new business make sure you know the out-of-pocket costs for your first 6 months and you have the funds to keep your business going while you are in the early stages. Very few businesses come out of the shoot making a profit from day one. Figure out what you need during the planning stages.
10. Are you prepared to work a lot of hours initially?
Whether you start your new service business part-time or dive in full time, you will work a lot of hours to get the business off the ground. More than likely you will be a one-person army in the early days and you will be in charge of marketing, merchandising, operations, physically doing the service, administrative duties plus even more! Whew…
Most new businesses do not have the funds to hire folks so be prepared to work your butt off!
11. Will you need to hire employees?
Depending on the type of small business you open, you might need employees (for example a quick-service restaurant, hair salon or dentist). If you fall into these types of service businesses make sure you do your research on the laws in your area or state for having employees. This is a critical step in the process. See more on this in upcoming articles and resources.
However, for most of you DO NOT hire any employees until your new business can support them. You must have a solid business plan on what the sales need to be and what your return on the investment (yes, your people, your team are investments not only an expense!)
If you must hire, then make sure you only hire must need positions first. Typically repetitive type items that can be duplicated. You want a solid business plan of what you get for your money and the return on money in x amount of time.
12. Have you created a business a business plan?
Ok, so you have been doing your research. You have been saving your money. You know you will kick ass and you love people. Time to start!
SLOW DOWN TURBO!
We know you want to dive right in (remember, we talked about this back on question #4. But just because you’ve done the research, it doesn’t mean you are ready quite yet. Time for your business plan or as I like to call it, a Success BluePrint.
Your success blueprint (business plan) is where you will map out your gameplan for all the key areas of your business. Think of it as a roadmap to get you going in the right direction, a place to visit when all those great ideas start to disappear as you get knee deep in the day to day business. A good business plan will be a fantastic reminder of where you are going and how you plan to get there. Plus you can tweak as you go. But do not undervalue its importance before you hit the ground running.
13. How is your business acumen?
Our final question to ask yourself before you start your new service business (or any business) is an important one. So important is really is two questions in one.
A business can only survive if it is profitable. All the sales in the world mean nothing if you don’t keep any of it. Yes, even if you hate math, there is no way around being a numbers person. The good news is, you get to cheat. You can use a spreadsheet, an online tool, heck even scribbling on a notepad (although that is our least recommend way…lol)
You need to be able to learn about profit and loss statements, ledgers, sales plans, and a host of other key terms you will hear in the business world.
Don’t worry, we are here to help. Keep visiting and we promise to keep providing great articles, tools or resources to help you grow into an awesome business owner!
So, how did you do?
Did you realize you still have a few questions to get answered? Or maybe you have already started getting the business in motion and now need to step back on a few of these items to brush up?
No matter where you are in the planning stages (or execution) of your business, I’m are here to help navigate those waters. With over 30 years of leadership, business knowledge, merchandising, operational, training and development and human resources experience you will be in good hands. My brain is here for the picking.
Good luck on your new adventure! It will be one hell of a ride but worth it if done correctly!
Don’t worry, you will make mistakes and that is ok. It’s what you do, what you learn, and how you grow that will determine your success!