Hiscox, the small business insurer, recently released a new digital docu-series, Courageous Leaders, in partnership with Vox Media.
The series features video interviews with successful entrepreneurs who provide insight into how they found the courage to succeed in business.
The series features entrepreneurs like Foursquare’s Co-founder/CEO Dennis Crowley, Thrillist Co-founder/CEO Ben Lerer and Interior Designer/TV personality Ross Cassidy.
A common denominator of many of these entrepreneurs was that they started their small business, quite literally, from nothing but a dream. Hunter Hoffmann, head of communications for Hiscox, recently spoke with Small Business Trends to outline tips on how to start a small business with limited resources.
Don’t Quit Your Day Job … Yet
One way to start a small business and get it off the ground while minimizing financial risks is to keep your day job until your business is large and steady enough.
While there’s certainly a romance to the story of the daring entrepreneur who goes it alone, there’s also much to be said for continuing to receive a paycheck, especially if you are married and have children. This means you will be burning the candle at both ends, but it can be done with good time management.
For example, if you work at the office from 9 to 5, you will need to block out time each day. Maybe 8-10 p.m. every night is the best time for you. Or, if you are a morning person, getting up at dawn and working for a few years is the way to go. It is all about managing time and keeping your stress level low.
Find ways to cut costs wherever you can. Many small business founders mix their fledgling business effort into their daily life, so they often seek to cut corners in terms of both household and business expenses. But a lot of entrepreneurs save a lot of money using new online DIY solutions, such as Wix.com, as well as by using sites such as Crowdsource and Elance to find supplementary talent you can virtually hire at competitive rates.
One way to help you determine where you should find outsourced support is by following this maxim: Focus on doing what you know how to do and let others handle the other stuff.
Also, don’t forget to attend the right networking events, ones somehow related to your business. You should attend as many of these events as you possibly can. You will meet people who may turn out to be instrumental to your success, all while enjoying the free food and drink offered at these occasions.
Praying and a belief in a higher power certainly won’t hurt your efforts to debut your business. However, here we refer not to winged seraphs, but rather investors looking for projects to fund. Utilize your connections to help get funding from angel investors, affluent individuals who seek to provide capital specifically for business start-ups. Many times you will find investors who were once in your shoes and can also offer advice in addition to funding.
As with so much else in life, to realize success here is like playing a numbers game: The more people you talk to the better your chances of finding someone who can help or introduce you to someone who can help.
In preparing for meetings with these potential investors, it’s important to know your business inside and out. One good method of doing this is to have a friend poke holes in your business plan. This will help you to better weather the storm, meaning you’ll be able to better handle difficult questions under pressure, an ability true leaders need to have.
Look to the Masses
Crowdfunding has grown increasingly popular. It’s also a great solution for entrepreneurs who need to fund their dream.
The rule of thumb here tends to be: the quirkier ideas perform the best. (Remember, one successful Kickstarter project had to do with the perfect egg salad sandwich recipe.)
If your business involves a novel product or an online service, you should definitely look into this.
The main caveat to keep in mind regarding crowdfunding when you start a small business is: always remember, there’s the potential for you to commit faux pas that make you obligated to return the money.
Go to the Bank When You Don’t Need To
Going to the bank when you are penniless puts you in a vulnerable position; it’s better to get the paperwork done early so you can commence building important relationships well in advance of when you’ll need to leverage them.
Also, don’t climb out on a financial limb until you have to. Monthly payments will always be due and they won’t change based on how much revenue your business earns, or fails to earn, for that month.
Make Your Business Your Baby
You’re the one who is ultimately responsible for making sure everything about your business is taken care of. No one else can do it. Just as new parents quickly realize that their newborn baby is in charge of the household, so too should new business owners realize the same about their business.
You wouldn’t trust someone else to care and feed your baby — consider your business in the same light. If there’s a problem, don’t complain because no one else cares. Just focus on figuring out how to fix the problem.
Schedule Some Off Time to Avoid Burning Out
When you start a small business, it usually proves to be an all-encompassing endeavor. You won’t punch out at 5 p.m. as do those holding corporate positions. Instead, you will find yourself working all hours in the day and night. You certainly won’t have a wealth of spare time anymore.
That is why it is so important that you schedule some off time — to avoid burning yourself out. Whether it’s an afternoon at the beach or a whole weekend away, you need to have breaks in your work cycle. Time away will let you recharge and often gives you a renewed perspective on the big picture that you won’t get while stuck in the weeds and grinding away.
Dot Your Is and Cross Your Ts
Watching your concept come to life is one of the most exciting things about starting a new business. But you need to take care of some basics, too.
For example, make sure you’re withholding the correct taxes for your business and your employees, and always sign on for the necessary insurance. Small businesses should look into both professional liability and general liability insurance and, if you have employees, workers comp is required everywhere but Texas.
Make Your Startup Official
When you start a small business, you must make sure you protect yourself by making your business a registered legal entity.
Creating a separation between yourself and your business helps limit your liability in case anything goes wrong. You may want to seek out your accountant’s or lawyer’s advice regarding what type of entity would be best for your situation.
Follow the Money
Every business starts out with what is considered to be a great concept, either of a product or a service that, the small business owner believes, people will die to purchase.
But the market quickly tells you what works and what doesn’t, and you need to be able to pivot quickly to follow the money, not wait at a place where you think it is going to show up. Remember, many of the world’s biggest companies evolved in quite radical ways — with some no longer even slightly resembling what they originally debuted as. Twitter, for example, started out as a podcasting service.
The lesson here is: Focus on what works and don’t be too proud to shelve ideas that fall flat.
Image: Vox Creative
Great ideas and I can’t emphasize the concept of frugality enough. Too often people look at these startups that just got massive funding rounds and see how they spend. Don’t emulate that.
Make the business your baby is spot on, you have to be passionate about it.
Great tip that most wouldn’t think of: “Go to the Bank When You Don’t Need To” !!! Excellent.
Definitely a good advice to ‘follow the money’ because no one can predict what works and what doesn’t. You won’t know what people want until you’re in front of them and you let them talk about what they need….then provide it. Fair enough, trash stuff if demand is growing elsewhere, re-invent yourself as you go
Great tips! So glad you included mention of making it official. Incorporation is so important, and so many people think they can skip this step because their business is small.
I really like all of the advice you give about how to be successful in starting your own small business. That being said, I appreciate the insight you give to go to the bank early on so that you build an important relationship, and you get the funding that you need for your expenses. That being said, I think that getting counseling in your finances is really important so that you can make the best possible decisions for the budget of your business, however, I also believe that getting additional legal counseling, too, can help you to ensure that you’re making the best decisions for your business and you are setting yourself up for success. Thank you for sharing!
This is one of the best articles I’ve read Small Biz Trends.
Fantastic ideas and a good starting point for anyone one who is seriously considering starting a business.
Great article. Only thing I would change is where you focus on Angels I would focus on Mentors. Find a mentor or mentors…the earlier the better. Especially folks who have been to the entrepreneurial dance before, who can keep your startup out of trouble early and guide you through the storms later. Not everybody either needs or gets professional investors. But everybody needs a mentor.
The browse section is where buyers goto finalize their buying by entering their payment details, etc.
The rational next step can be your community themselves.
I think it’s important to remember that no small business is going to achieve instant success overnight. That’s why it’s a good idea to have a steady source of income, and to not give that up. Setting aside a specific time to work on your small business is a smart idea. I am going to have to start doing that myself! Thanks for sharing.
This is some of the best, and most positive, TV to come out in years. Today there is so much bad news and sad events, focusing on success stories makes for a welcome change. Thanks for pointing out the homework that all people who want to start a business must do before launch. I see lots of companies launched prematurely to all the research properly completed. This often waste time and money, and negatively affect the business owner. Appreciate your perspective. Thank You
Great tips Ed. Specially the crowdfunding idea helps to grow something innovative. Starting a small business needs basically proper planning and executes the plan by using proper resources. Small business owner should be aware of current trend that he can grab the perfect opportunity in time.l.