Starting a small business to improve long term life style
75A small business can be a wonderful way to increase wealth and enable a better lifestyle, pay for a comfortable retirement, and take away the need to work full time.
I have owned, managed and operated quite a few small businesses over a period of 40 years and developed several ways to create the lifestyle I wanted both at work and play. If you start a small business it should be doing something you love to do either as a hobby or an interest you want to develop. If you love your work it is much easier to remain motivated.
The days when you could start a small business in your back yard with $4 of your own, a $50 loan and a borrowed trailer to pick up your stock are long gone. Turning that business in to a full time income in a few weeks is just about impossible these days with the exception of used goods, which can still grow very quickly and offer high returns to allow reinvestment out of profits.
If you were to start a business in your back yard today, your neighbors would probably have the council inspectors around the same day you started. As for hammering all night building shelving, using the electric welder till 3am. I don't think so. Small business today face more stringent controls, even at start-up.
There are so many different regulations, licenses and rules that small business models need to be costed to reflect the expense of administering compliance and paying these often annual fees.
Many entrepreneurs get bogged down when confronted with the reality of these business constraints, but if you have a good profit, farm that stuff out as soon as you understand it.
What if you fail? You still have obligations to unwind all these compliances and fulfill obligations to existing clients/customers. A very high percentage of small businesses fail, but apart from the unknown and unknowable such as poor health, nasty weather or other disasters, most of them fail because they deserve to! How many times have you had lousy communication and crappy service from a small business?
The usual bricks and mortar constraints you hear people complaining about today have troubled small business for many years. Not much has changed in offline business except for Councils and Governments making more rules for you to comply with. These rules have been an ongoing nightmare for many businesses.They have not always seen them coming and had no plan in mind for such legislative changes to health and workplace safety or new laws which affect profit directly or indirectly by changing the playing field.
Understanding risk versus profit in small businesses.
While aiming your small business at high margin niche markets can be very profitable, alas, as with all high profit businesses, they have proportional risks. High risk is always directly associated with high profit.
Knowing what those risks are takes knowledge and research, but is not as difficult as finding out how to factor the risks enough to make the business very profitable and low risk for you, but not your competitors.
I can show you exactly what works, but it's a bit like leading a horse to water. You may not be ready or even able to drink, and I can't help with that, past telling you how it works in real life, and that you must have a new angle to beat your competition and make big money in a small enterprise.
Here are the things that work all the time in any small business.
- Attitude. If you are on the ball, smiling and motivated, you are in the game.
Knowledge. If you know more about the product than your competition you have an edge that your customer will soon recognize.
- Services. Go way past "over deliver." Provide a unique service or free advice that is unique to your business, and pay for it out of your margin. If it costs you nothing, that may well be what it is worth to your customer.
There are no businesses that I know of that provide big
profits without high risk. Even huge companies that appear bullet-proof
like British Petroleum can still take a hit large enough to sink a
small country. The only way to remain bullet proof is to get in front and stay there, if you drop the ball a dozen new small operatives will fill the gap, leaving no market size for anyone to make real money from.
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Thanks agvulpes, it is one of the hurdles. I reckon the first year is the biggest risk, however many fail when they grow too quickly and can't keep up the service when the customer base grows. Being prepared for growth is a bit tricky, you need to have acquired some profit to stock up and buy equipment in many cases, as well as have the time and staff to devote to customers. It all needs to form part of a sound business plan.
I am glad you emphasized - start something you know and like. I charged without much thought into many areas, such as a model agency (no film in the camera, lots of pudenda) to several cafes (too much waste food and staff probs). I had a largish television repair business in San Diego USA when we repaired them instead of throwing them away at the first blip and buying a new one. My best business, curiously, was the first, a scrap metal company in southern UK which resisted every attempt of mine to scuttle it by drunkenss and womanizing. I left it running and went to...Australia!
I have attempted many other small adventures - I still run an Ebay site; and published. But I think I must be terrified of success because I have never really known any except superficially by the pen...Good hub Earnest, I should have stayed in Oz mate Bob
Hi Ern as you know my small business incorporates all of the above. I still love it when i convince a customer to have something fancier that will make me a little less profit. The pay back is twofold, once when i stand back and feel good about the outcome and secondly when times get tough but the phone still rings. Cheers mate, another common sense spectacular.
Wise advice and well presented. I have watched countless small businesses start up and fail. There was a time when all banks required a business plan and a discussion before lending out the cash to get going. Now....I think...they see another sucker come along from whom they can get the next lump of cash. Thank you for your hub.
Awesome hub! I have my own business in Brazil and you have every right to say that what makes the difference is good customer service.
When I quit my job to start my small business with a friend, many said it was crazy, but as you said, we need to take risks. For me it has worked, and today I feel blessed to work with what I like and I'm proud to see my business going well.
wow diogenes, you have not let the grass grow between your toes have you? I do believe that a fear of success is huge.
When I started my business consultancy in 1977 and went corporate, I almost dropped the ball at first when I succeeded. My first client paid me $1,6oo a day plus expenses which I had asked for, but crapped myself when I got it. I was lucky to survive the first year.
I settled in to it after about a year of tripping myself up. It's not too late to immigrate! :)
Keith I do know how you run your business, and you will never be short of customers. Your morals are transparent, and your customers love it. :)
Thank you Peter, The banks here have often required a full business plan when providing funds. I have seen many start ups fail as well. Passion can make a lot of difference to outcomes. When I started my first successful business I felt unstoppable, and all the problems went away when I threw money at them.
If you have a good margin many obstacles can be overcome.
Jussara I can relate very well to your comment. I was lucky enough to spend my life in my own businesses and had so much fun doing it, I would still be in business if I did not have something more important to do. I live with my grandchildren and spend all my time with the little ones these days. I come up good dressed as a fairy!
You should post some pictures of you as a fairy.[SMILE]
One day I hope to be able to spend all my time with my grandkids, but first I have to become a mother. :-)
I will be there one day. :D
I am sure you will be great at both. I am not so brave as to post a pic of me as a fairy, but I do look very funny!
I'm sure you will Sandra. Nice of you to drop in, I haven't seen you for a while. All the best.
Veru down to earth and real reality. Thank you for agreat hub.
Thank you for reading hello hello.
Being in your own business, I have owned one and been partners in two others. takes time. Some say you can slow down and relax after things are going good but unless you can leave it in hands you can really trust, not a wise idea. I retired from being a partner when I was thirty five to work for the state. Time was always important to me but I still did side jobs and ended up working sometimes twenty hours a day. The best thing about owing a business is you can set your own hours, and make as much or little as you want. You do however need to work smart and have people you can trust working for or with you.
Thank you wheelinallover, I learned to delegate to good people.
Out of all the years I worked for myself, I reckon I only actually worked myself for half of them. I would sometimes take a whole year to go and do something else.
Awesome hub,always liked Aussie's! :)
Thanks HattieMattieMae, I'm also glad you like Australians, we are a pretty lay back bunch at times, because we do love our time off.
Not bad earnest. General rules for small business. For me getting the word out is the big issue. You can have the best product in the world and those who have checked out the product think it is wondrous but all that means nothing in the end if you can't get the word out. by the way of late my history hubs have had a fair bit about Australia including the ANZACS.
Thanks for dropping in Rod. I agree the message has to go out there, and it takes a lot of creativity to get it just right.
I used to go on holidays for much of my inspiration, or even going for a walk in the bush worked for me at times.
I will check out your new hubs. Good to hear from you as always.
Thanks earnest.
Your new hub is fantastic by the way.
I am glad you think so. I have a passion for history.
Thank you for the insightful info! Voted!
Thank you, you are most welcome!
Great hub and thanks for sharing.
Thank you, you are welcome.
TY for the insight. I've been trying to start a business offline but it's not that easy. Thanks for the pointers, I am more optimistic now.
I have to bookmark this hub, so I can periodically refer to it as a reminder.
You've defined great points, that everyone should consider when pursuing a business of their own.
Thank you imatellmuva!
Business has always been fun for me, and I spent most of my life enjoying it.
I believe if you love what you are doing, the drive to succeed is a lot easier to maintain.
Very useful and informative hub. I am planning to have a small business of my own and your tips come just right to me. Thanks for sharing.
You are most welcome Thelma. Good luck in your new venture.
You're welcome melodyts. I wish you all the best with your business.
agvulpes Level 3 Commenter 13 months ago
You are correct, because of red tape it has become very hard to start a home run business.
From what I hear, of the businesses that fail, the majority fail within 12 months of start-up.
Finding the right niche for your talents is also true and if you are going to be your only employee that you have, then you need to be very passionate about your chosen business.