5 Things You Should Consider Before Starting a Small Business

1. Shel St CLair

   Business Plans Are Vastly Over-Rated

I have been starting and developing small businesses as a consultant for 20+ years and I have been paid to work on countless plans that were not worth the paper they were written on.  The uncontested winner for first place in the category of most important item in starting a small business is, (drum roll) have a solid idea.  That’s right, have a good business idea.  It doesn’t have to be completely unique or original but it needs to be good.  For example, a neighborhood grocery store specializing in gourmet deli items, not unique but if well run it will be a winner if…  Well, if what?  If the location and merchandising of the store are correct.  If not all the best planning in the world will bomb.  So what is your idea?  What do YOU want to do?  Would you buy it?  Why would the people around you buy it? 

Imitate What Works Not What Doesn’t

Even if your business idea is entirely original and no-one else has ever thought of it, there are fairly standard principles that will help sell anything. (E.g. clean restrooms promote repeat business in restaurants, asking someone to buy makes more sales than waiting for them to decide to buy)  So, there is much information that can be applied to ANY business that you want to start that will get you miles ahead.  Find it and apply it.  Conversely look at what other businesses are doing that DOESN’T’WORK FOR YOU.  If you don’t like it that is a big clue that others won’t as well.  Ultimately, the point is don’t try to reinvent the wheel, even if your business is unique. Learn as much as possib  le from the success and mistakes of others.

Start With As little Money As Possible

What!!!  You heard me.  Unless this is some kind of no-brainer that has absolutely no risk and requires that it be fully funded for a full two years, invest as little money as possible.  I have been hired dozens of times by start-up owners who were pouring their retirement savings into an idea of their wife’s cousin.  They plan, they research, they build, and then no one buys.  Find out if people will buy before you fully invest your heart, soul, or money.  I had a woman come to me with what I thought was a very clever idea once; it involved retail sales of a relatively unique product line in a cleverly discounted way.  I counseled her to HAVE A GARAGE SALE.  What?  Yep, buy a limited amount of product, put a bunch of junk in your front yard, add the discounted merchandise with the full price tag still on it and see what happens.  She sold out.  She even sold the junk.  She found a cheap way to test her business idea and discovered that she had a winner worth investing in.

Don’t Start a Business With Your Ex or Your Best Friend

Gosh, doesn’t this seem obvious.  What I mean is that unless your friends or enemies are Warren Buffet or Tony Robbins they probably aren’t who you want to be taking business advice from.  There are a ton of websites and books written on every subject imaginable that offer fairly solid (if hackneyed) advice on starting and growing a business.  In most instances it is best to keep your own counsel and seek only the counsel of those who hold wisdom.  Again, I had a woman hire me once to write her Sales and Marketing Plan for a start-up business that I felt was solid as a rock.  I studied her business and spent several weeks researching and discussing strategy with her.  I like to follow up so I called her some months later to find out how she was doing.  She had taken everything she had worked on to her mother, (who was a successful business owner) who had talked her out of starting the business and keeping her corporate job.  She never even tried.

 Understand What a Business Plan Is

The two best business planning movies ever made are Ocean’s Eleven and Monsters Inc.  They fully illustrate where business plans fail: execution.  Study these movies!!!! In Ocean’s Eleven you see a vastly over-exaggerated business plan that is brilliantly executed.  In Monsters Inc. you see a relatively simple alteration to a business plan that is already successful, fail miserably.  In both cases the answer to why is execution.  If you do not understand what this word means and how it relates to planning stop what you’re doing and go find out.  Whatever your business is, or is going to be it will never be what it could if you execute poorly.  5 Guys Burgers is a supreme example of this; they have a very limited menu, but boy do they do it right.  Uh, about 5 Guys, I meant business execution, not burgers, Portillo’s, which is also a well-executed business, smokes 5 Guys burger.

Ultimately the strongest advice I give entrepreneurs is, “Do it wrong until you get it right.”  Don’t let the fact that you aren’t perfect stop you.  Get out there; Fear of failure is the number one cause of lack of success.