One of the daunting tasks you have to accomplish to start your own business is to find a good business idea that will actually earn you money and not lead you right into bankruptcy in just a few years of your big launch! And in fact, most people who want to start a business on the side, haven’t started yet because they don’t have a profitable business idea.
But this is mostly a mental barrier which you can easily overcome only if you know where to look: your strength. Because after you started, your business will likely dominate your life. So you need to make sure your business is not completely out of your expertise so that you can go for the long-haul.
Do a quick self-evaluation test and find out your strength. Ask yourself:
What skills do you have?
Now, think about the skills and knowledge you have acquired. We always pay for some expert knowledge, like programming lessons, instrument lessons, cooking lessons, language classes, college courses. You can use your knowledge and become a teacher too.
What do other people think you are good at?
This is a good start. This question will not only boost your ego a little bit but also can give you some great profitable business ideas. Message your parents or friends or your colleague, and just ask them if they think you are really great at something. Maybe you give very feasible relationship advice, or you have great taste in fashion or they think you are a very good dancer. Turn their answers into your side business ideas.
What do you already pay for?
Now, if you don’t want to play to your talents or strength then you can look to things you already do. Example: walking your dog, looking after your friend’s or sibling’s kid, cooking your meals or just cleaning your house. These are the things you already do without any fees anyway. Now, use these free-of-charge activities to turn them into your little side business.
What do you do on the weekends?
Now, I know you must be thinking that “I stay in bed all day long!”. I know staying in bed and watching Netflix may be really comforting, but you must also do other activities during your weekends. For example, maybe you go shopping or hit the gym or tend to your little garden in the backyard of your house. These are the activities you love to do and you are incredibly comfortable at. So use your hobby to turn them into great business ideas and start your own business.
After this self-evaluating test, you should have at least 10-12 business ideas that you can actually use to make some money. Even if you are not feeling it, don’t worry. You can always come back to your list and pick something else.
Now let’s move to our next big step to starting your own business.
Before starting your own business you must analyze the industry:
Once you have decided on a business idea, you must research your business and the industry you want to go into. There are no hard and set rules. You can do this the old fashion way. You can browse through the internet, talk to the people who are already doing this job, read the books by the top businessman in your target industry, read the relevant news sites, magazines and if possible take a few classes on this subject.
But if you don’t have much trust in the traditional sources, you can always less traditional and more professional sources like getting help from the government department or contacting your local SBDC.
To research your target industry, let’s look at some of the trusted sources:
Take advice from the advertising representatives to collect data and statistics on your competitors or about your industry.
Let’s say your service or product is for people who are making above a certain income in a certain area. So you need to know how many people fit into that criteria. To find out how big your target market is, consult your local list brokers. They sell mailing or email list based on demographic attributes. So they are most likely able to help you to get the details of your target market than most other people.
Target industry suppliers:
To get a sense of the demand and information on your target market, seek advice from industry suppliers.
Most students happily conduct any research for you at an affordable price. Seeking their help will be a good idea too.
Now that you have enough information on your target market, let’s move on to our next step to starting your own business.
To start your own business you must have some top-paying clients:
Now, this may seem as daunting as finding profitable business ideas. But believe me, it’s not that bad. You don’t have to send thousands of cold emails and phone calls to finally nail a gig.
You can start by browsing through the job boards of the freelancers’ websites like Craigslist, Upwork or Fiverr. These are the best places to generate leads and believe me, the majority of your competition on these websites is downright terrible. So all you have to do is just put a little effort into your initial reaching out and get a hold of your first freelancing job.
To separate yourself from your competitors, take some time and craft a perfect pitch for your service and start sending them emails.
This brings us to how to pitch your skills….
Know how to pitch your work to start your own business:
To find yourself some top paying clients, speak directly to your potential client’s needs! Now, this is a very crucial point to understand for any beginner.
Let’s say you are on your first day, and all your date wants to do is just talk about themselves, their needs, bla…bla..bla… you will sneak out through the backdoor within minutes, right? But what if your date asks you questions about you and your needs and seems genuinely interested in you? By the time you leave, won’t you be wanting a second date?
The same rule applies when you are pitching your service to your clients. Take some time and craft a pitch according to your client’s concern and show them you genuinely care about their problems and want to solve it for them.
Your email must include things like:
Introduce yourself and tell them how you know them. For example, if your clients are Youtubers, tell them how you watched their videos and now to help them with their problems.
Your Business Offer:
Do research on your client’s organization and find out what they need help with. Then tell them how you want to solve their problems and why you are perfect for the job. Example, tell them how you have been doing this work for several years and how your experience can help them maximize their profit.
Show them how your service will maximize their profit and by what amount. For example, is your service going to free up more time for them? Is your work a lot less expensive than most other competitors?
This is a classic approach. Get your clients to agree to a small favor first and then ask for larger ones later.
Call To Action:
The call to action is a critical part of your pitch and you must get it right.
Be clear about your work and ask them if they would like to proceed. But don’t be too straight forward. Ask them nicely if it’s okay to send them a few ideas about how you want to help them.
The truth is people love a large profit. And if you can nail the small task with perfection, you can expect to land some more work and earn top dollars for it.
Learn how to tune the perfect price to start your own business:
When starting your own business, the most confusing and complicated task maybe how to price your service. You may be full of questions like “Am I asking for too much?” or “Am I asking for too little?” “Should I charge per hour?”, “Should I charge per project?”.
It’s okay if you don’t know the answers to all of them. You can simply start by picking one method and see how it goes. There are not rules set for these. But a good rule of thumb could be:
Research What Your Competitors Are Doing:
Just go to Google and search what your competitors are asking for the service you are willing to do. This will give you a general idea about where to start and what to expect from your business.
Know What You Can’t Work For:
I love this one. This method is quite interesting and effective. Just find out the lowest rate that will leave you resentful of your work and just double that price. Let’s say if you work for $10/hour, you will feel unsatisfied with your pay. And just double the price and now your hourly rate is $20.
Your Ideal Salary:
This is a newly learned method from the internet and is in fact quite effective. To apply this method, just take your ideal salary and drop three zeros from it. For example, if you want to earn $50,000/annually, just drop three zeros from the end and set $50/hour as your hourly rate for your service.
There’s no hard and set rules about how much you should charge. Just pick one method and set your price. Once you start charging your customers you will get an idea about what rate you are happy with and as you scale up your business you can change your price accordingly.
Before starting your own business, you must protect your personal assets:
Never start your business as “sole proprietorship,”. This will only put your personal assets at risk for the debts and liabilities of your business. You should always enlist your business as an S corporation or a C corporation or as a limited liability company (LLC).
None of this method is expensive or difficult to set up. My advice will be to set up your business as an S corporation so you can change it to C corporation when you want to bring in investors or want to issue multiple classes of stocks.
Most business owners think that if they file for a certificate of incorporation, they will be protected from personal liabilities. But unfortunately, this is not the case. To protect yourself from personal liabilities, you have to follow certain procedures. They are:
Use The Corporate Name:
Always make sure to use your corporation name including “Inc”, “Corp” on all documents, invoices, contracts used by your corporation to establish the existence of your corporation as a separate entity.
Use Proper Signature:
To properly establish the existence of your corporation as a separate entity, always sign on behalf of the corporation by using the name of your corporation and your title.
Keep Funds Separate:
Never combine corporate funds or individual shareholders’ funds or put them in the same accounts no matter what the reason may be.
Follow Corporate Formalities:
To indicate the existence of your corporation as a separate entity, follow all corporate formalities whether it’s about issuing stock properly, following bylaws, holding meetings of the Board of Directors or even recording the meeting minutes.
Keep Taxation Separate:
Make sure to always pay company taxes entirely from corporate accounts and separate tax returns filed for the corporation.
Keep individual transactions separate:
By separating company transactions from individual transactions, you draw a distinct line between individual shareholders, owners or the Board of Directors, and the company.
Last but not least, prepare for trial and error. When starting your own business, expect to make a lot of mistakes. But make sure to learn from your mistakes and be open-minded, creative and above all, always have fun!