Money 101: How To Start Your Own Small Business
J.K. Rowling was buying groceries on a welfare check until she hit pay dirt with a nerdy pre-teen wizard. Sara Blakely was a sales trainer and stand-up comic before she revolutionized the pantyhose industry with Spanx.
Almost two-thirds of the world’s approximately 1,000 billionaires are rags-to-riches stories. And even Kanye says a little ambition can help you make a Benz out of that Datsun. So … why not you?
According to Georgia economic developer and small business expert Mary Ellen McClanahan, there are more than 29 million small businesses in the U.S. Fifty-two percent of those are managed and operated out of the comforts of someone’s own home. Although there are fewer women entrepreneurs than men, McClanahan says the number of women-owned firms in the U.S. is growing at twice the rate of others.
“Women start businesses for both lifestyle and financial reasons,” says McClanahan, who has been advising small business owners for 14 years. “Many run businesses from home to keep overhead low.”
Can you see yourself on Oprah’s couch telling your success story? Conducting conference calls in your pajamas? Writing off everything you buy as a tax deduction? Slow down, sister. McClanahan says successful small business owners share common characteristics such as passion, focus, determination, drive, good planning skills and talent.
Even if you’ve got all that, she says there are some challenges, too. Our bedraggled economy has left some small-business-owner-wannabes with tight credit regulations when they’re trying to secure a loan. Historically, health insurance costs have also been a hindrance to small business entrepreneurs.
“However, the good news is the cost of starting up your own small business my not be your biggest obstacle,” said McClanahan. The majority of today’s major business icons started with only $6,000. The average business loan for new company start-up is $5,000, she says.
So, where to start? McClanahan says the first thing a budding entrepreneur must do is get educated. “You must learn what operating a business means. Check out your competition, investigate the marketplace, and get partners on board to pull the weight where you are weakest,” she says.
McClanahan recommends first hitting Google, then going to your local Chamber of Commerce to determine how saturated the local market already is with your product or service. Next, she recommends turning to Uncle Sam. You’ve paid taxes for years, right? (If not, you might wanna get on that.) It’s your turn for a handout — free advice, counseling, training and even financial assistance under certain circumstances.
The U.S. Small Business Administration (SBA) is a federal agency that serves as a resource (a free one!) for citizens who wish to start, build and grow a small business. The SBA website will give you step-by-step instructions on how to write a business plan, find a mentor, apply for a business loan, obtain licenses, pick your location, and even develop an exit strategy if your idea isn’t working out.
So if you’ve got entrepreneurial spirit and a work ethic to match, give it a shot. Your own wizard or pantyhose idea might take you from rags to riches. Or maybe you’ll just free yourself from a lifetime of bad coffee and water cooler jokes … in our opinion, a win either way.
If you were to start a small business, what would it be? Share in the comments! (Unless you’re worried we’ll steal your ingenious idea.)
The Money section and all articles within it are sponsored by Free Credit Score; however, the articles are all independently produced by The Frisky and the opinions and views expressed by the writers and experts are their own.