+ Share page with friends!
Your Name:
Friend Emails:
Your Email - optional:

How to start a business

Before you can run , walk. If you have a day job with a stable income then you should first start a side business as a backup. You do not have to quit your day job to "launch" a new business. Only think about launching a business if you are planning to take a dive. Unfortunately, people naively think all they have to do is hang their sign out, and customers will knock on your door. As Thomas Edison said, " Opportunity is missed by most people because it is dressed in overalls and looks like work ".

A side business will benefit you in the following ways

  1. Give you invaluable real world business experience
  2. Supplement your income
  3. Be your backup job when you get laid off
A lot of employees think the good times will last forever and they will never be laid off. Unfortunately, all business is cyclical. During down times, any employee whose job function is not directly related to the bottom line will be laid off. It does not matter how hard you worked or how long you have been with the company. Job function always trumps performance and seniority. For this reason you will be thanking the heavens for having a side business to fall back on.

Do not worry about earning a lot of money with your side business. It will take a lot of time to build up your product/service to the level where it sells itself. However, the education you get by interacting with your prospective customers is invaluable. You will gain street smarts that no MBA from Harvard can ever teach you. In this light, you should value the experience very highly . Earning money is secondary in the first five years.

Most small businesses are grown. You start with one job. If that works out, and you can collect, and you can make a profit, then you get another job. And another. And another. You keep your day job so you can pay the bills and keep things going. When you get so much business stacked up that you think you can never get it all done, then you consider backing off of your day job.

You must have passion for what you are doing. Without passion you will have no motivation to do the countless daily tasks required to run and grow your business. If each task is a chore to you, then you will burn out in a matter of months.

Too many people think running a business will be as easy as their day job. In a day job you are paid to do one specific task that often has not changed for years. In a business you do every task. So the risk, work and learning curve can easily catch you by surprise. For this reason you must have passion for the business. Money can not be your motivator, since it will take several years before you start to turn a real profit. Initially you are after education and experience.

The typical person 'launching' a new business asks question about what type of business entity to form, i.e Limited liability corporation LLC, and what state to register the business in. Put the cart before the horse. If you are a one- person operation, then there is no simpler and more effective way to do business than as a sole proprietor. Just file schedule C with your taxes and you are done. Why do you want to spend thousands of dollars plus lots of non value added time forming some more complex entity for a business that is a one-man show? No legal mumbo jumbo will insulate you from the responsibilities to your clients.