I didn’t know what you need to know before opening your own business.
I knew nothing about starting a small business. Luckily, the economy was great in 1996, and my niche was referral selling (still is), so I at least knew how to build a small business sales pipeline. My company took off quickly—almost too quickly. Why? I didn’t have time to develop a plan. A new business checklist would have been a lifesaver.
Now my advice for anyone starting a small business is this: However long you think it will take, double it.
I also advise them to meet Melinda Emerson, the SmallBizLady. She is THE small business expert, a speaker, author, podcast host, and creator of the Small Business University. Her post, 12 Things You Should Know Before Starting Your Own Small Business, should be a required read for any new entrepreneur.
Three of the insights on Melinda’s list really jumped off the page for me, because they are relevant to anyone starting a small business—anytime, anywhere.
- Pay attention to cash flow: Without cash flow, you risk going out of business. Don’t be a statistic. According to data from the U.S. Bureau of Labor Statistics, about 20 percent of U.S. small businesses fail within the first year. By the end of their fifth year, roughly half have faltered. After 10 years, only around a third of businesses have survived. That’s why it’s #1 on my list (#2 on Melinda’s). Even if you’re great at numbers, get help from a CPA. You must have someone external advising you and monitoring your income and expenses.
- Double your price: Yep, most everyone undervalues their own work. One of my colleagues said: “Your price should be scary plus 20 percent.” Try it. If you get push-back, don’t drop your price. You could remove a deliverable and/or offer payment terms.
- Focus on one thing: The age of the generalist is long gone. The narrower your focus, the more you’ll be viewed as the expert. Companies hire experts. Stay in your lane.
For the rest of Melinda’s insights about starting a small business, read her article, 12 Things You Should Know Before Starting Your Own Small Business.
I started my company 25 years ago, and yet I still learned from her perspective. For me, that’s one of the best things about entrepreneurship: being a perpetual learner. And experts like Melinda make that easy.