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