For the purpose of this exercise, I did steps 1 – 4 for a housecleaning business for Sue. As you can see, the first set of circles reveals that Sue has quite a bit of experience. Her edge is that she plans to use Eco Friendly products because she is an activist for our environment. For every circle, she then detailed how she is using this experience to create her company.
I expect that you will have loads of circles on your page. Think hard! I guarantee that you have more actionable experience than you think you do.
5. Get Feedback
Now is the time to take your idea and get a fresh set of eyes on it. If you have a service-based business, take your diagram to your peeps (most likely family and friends at this point) to see what they have to say. Here are a few tips.
Tip 5: Be Open-minded With Criticism
Some criticism will be constructive. Other feedback, not so much. Take the good with the bad, look for patterns in the feedback, and always, always be gracious. Thank them for their time. Ask questions if some of the feedback is vague. Don’t miss out on an opportunity to make it better because of lack of communication.
I will use me as a perfect “bull-headed” example. I was starting a new business and was so excited to run an idea past my husband. I did not take his input well. I was actually aggravated and felt he didn’t understand what I was trying to create.
After a bit of thought, I realized where he was coming from and made a few changes as a result. Don’t be bull-headed! Take all criticism into consideration. Your product or service is not going to appeal to the masses.
Considering different perspectives may actually give you another stronger angle where you appeal to more people than your original target market. If someone doesn’t like one idea, it doesn’t mean they hate everything you’ve just said.
6. Make it Official
What does your business structure look like? For small “hobby to business” startups, entrepreneurs typically choose either sole proprietorship or a limited liability company. To avoid confusion before choosing one or the other, you should evaluate the strengths and weaknesses of each as they pertain to your needs. The Small Business Association (SBA) is a great resource to check out.
- The limited liability that LLCs provide for their owners
- Sole proprietorships are generally less costly than LLCs
- LLCs need to register with the state and pay registration or filing fees
- LLCs often have annual fees you must pay to maintain registration
- LLCs are subject to state laws governing LLCs
- With an LLC, you must keep LLC records and funds separate from your own
- Operating as a sole proprietorship, you are taxed as a self-employed person
- LLCs can be taxed as sole proprietorships, partnerships, or corporations
Business name – What’s in a name? A lot! Once you’ve picked your name, you should protect it by registering it with the right agencies. Brand yourself. Before you name your business, you should have a handle on your niche.
- Address your customer base (Office Depot)
- Make lists of words that represent the qualities/products you want to market (New Mommy Clothiers)
- Try a simple one-word name (Staples)
- Come up with some simple adjective-noun phrases (North Face, Urban Outfitters, American Apparel)
- Use a proper name (Papa John’s Pizza)
- Make a new word (Buzzfeed)
- Play with words (Grasskicker Lawn Service)
Choose a Location
Does your product or service require you open a brick-and-mortar storefront? Or are you gearing toward an e-commerce set-up? The SBA offers great tips when choosing a business location.
Register Your Business
Register your business name to protect it. Your location and business structure determine how you’ll need to register your business. Determine those factors first, and registration becomes very straightforward. You’ll receive Federal/State tax ID #’s. Check out the Small Business Association tips HERE.
Be sure to check on what is required for your business structure. SBA tips and tools.
Business Bank Account
Before making any business transactions, you need to open a business bank account. Call around to see what banks have the best small business checking account plans. Don’t forget to inquire on minimum balance requirements and checking account fees.
Insurance can protect you from unexpected costs – from natural disasters to accidents to lawsuits. SBA tips and tools HERE.
7. Business Plan
A business plan demonstrates your idea’s potential for success. Whether you are wanting to sell your handcrafted items online or seeking to open a brick & mortar, a business plan is a must. Don’t be fooled into thinking that you don’t need to do this because you are just selling small items as a side hustle. This is a must, and I have great resources for you. WikiHow has a great resource for writing a business plan.
What is a Business Plan?
- A description of the problem your customers have
- Your solution (your product or service)
- Business model (how you make money)
- Target market (who is your customer and how many of them are there)
- Competitive advantage
- Management team
- Financial summary
- Funding required
8. Figure Start-up Costs
My guess is if you are reading this blog, you are a small start up like my businesses have been. I have always used income from 1 job to fund my side hustle. But there are actually a ton of ways to get your resources to start your business.
Fund your startup yourself. Bootstrapping your business might take longer, but the good part is that you control your own destiny (and equity).
Pitch your needs to friends and family. It can be hard to separate business from personal relationships, but if you’re considering asking for a loan, make a formal proposition along with your business plan to show them just how serious you are.
This is a great way to rally support of your inner network. If you find it difficult relating your ideas to friends and family, ask yourself why.
If it is because you are ambivalent on your service or product, then step 9 (coming up next) may help.
Request a small-business grant. Nerdwallet listed the top 10 places women can look for small business grants and financial resources.
- Small Business Innovation Research and Technology Transfer Programs
- The Girlboss Foundation Grant
- Women’s Business Centers
- Economic Development Administration
- Small Business Development Centers
- Amber Grant
- Eileen Fisher Women-Owned Business Grant
- Fedex Small Business Grant
- National Association for the Self-Employed
Nerdwallet.com also lists 9 small business grant opportunities for minorities.
Black Enterprise lists the top 10 grants available to black, minority business owners.
9. Redefine Your Product or Service
Now it’s time to put your ideas in action! Take the feedback you received and work out any bugs. This is the time to expand on any original ideas you had for your product or service, reach out to manufacturers if you need to mass produce, and redefine to better fit your niche and appeal to your target market.
After all the work you’ve put into starting your new business, it’s going to feel awesome to actually see your idea come to life. But keep in mind, it takes a village to create a product, so reach out to a professional if you need help with any of these steps so far.
Next week, we’ll go over steps 10 – 12. At the conclusion of the 12 tips, I’ll feature a short quiz for you to see if you fit the role of entrepreneur.
About Today’s Author
I am happily married with one daughter and two step-sons. I have owned and operated a small wedding cake business for over 25 years and most recently started a new company handcrafting carved egg shells. A truly unique talent.
In owning and operating small businesses, I have personally experienced many successes and failures along the way that have made me a seasoned DIY entrepreneur. I don’t claim to be a professional marketer or consultant. Just consider me your new best friend that is sharing my personal knowledge and experience.
I welcome your comments and input, so please feel free to share. Each week, I post a new topic. So follow me so you won’t miss out! Next week, I will continue on with steps 10 – 12. I may even add on a step or 2 next week if I can’t fit all of the information into 3 steps.
Hope to see you next week!
Believe in yourself and your dreams!