Hard economic times are often a good time to start a business for a number of reasons because existing companies are…
Startups often have the advantage of lower fixed expenses such as wages or rent. And lower costs mean they can offer their services or products to their customers at lower prices thus giving them a competitive advantage. Even with these advantages, starting a new business is still a chancy proposition and it’s almost impossible to take the risk out of a new business startup. However, there are certainly things you can do to reduce your risks when you start a business.
• Keep your costs as low as possible. Here are some tips…1) Do not rent or lease space unless absolutely necessary for your start up. This can be a big expense. If at all possible, use your home for your office and your garage or extra room for assembly, packing, shipping or inventory storage. This can save you hundreds or thousands of dollars annually. If you need to meet with customers or potential clients, consider meeting them at their office or in a public restaurant or hotel lobby. Before using your home for your business, check with your local government office to be sure you comply with local ordinances. Click here for other legal issues to consider.
2) Keep your marketing costs on a tight leash. This includes brochures, direct mail or TV ads. These costs can add up quickly. Tip toe into the various advertising media that make the most sense for your business to judge their cost effectiveness before proceeding with larger campaign expenditures.
3) In the startup phase ask yourself if you really need this now before making any expenditure. When starting a new business one can get carried away with nice to have versus must have. Stick with the must have’s in the startup phase and only buy the nice to have’s when the business can pay for it through profits and cash flow.
4) Consider incorporating your business or setting up an LLC (Limited Liability Company) yourself. Among other things these business structures can protect your personal assets from your company liabilities. If you do it yourself, click here for more information on selecting a business structure as well as other legal issues, it will cost you hundreds instead of possibly thousands of dollars.
• Consider a low cost business. But where does one start to find something to sell? The numbers of possibilities are endless. To get you started this site provides a list of ideas for small businesses whether it is selling goods, services or information.
• Make a Plan. This is an often overlooked and underrated. A Business Plan does not have to be complex but you should have one. That said, the purpose of this site is to help individuals and company’s plan, create and operate a business website. We included this section on planning because of its importance to business success. You wouldn't start a road trip without a map, so why start a business without a plan?
