Starting your own small scale business can be a scary prospect, but with a little guidance, a lot of research, and old-fashioned hard work, it can be personally (and financially) rewarding too.
2018 has been a very kind year to small scale business owners and optimism remains high. According to TD Banks recent small business survey, published by Small Business Trends, 53% of small businesses planned to grow in 2018, up 46% from 2017. That means the small business market is feeling secure, experiencing profits, and looking forward to the future.
What exactly is a “Small Scale” Business?
Small-scale businesses employ less than 500 people, have a low sales volume (low as compared to mega-corporations such Amazon or McDonald’s), and are usually privately owned.
This has been the general definition of small business for a long time. However, what small businesses look and act like continue to change at a quick pace. A relatively new trend is where people are starting their businesses. A recent Gallup poll found that almost half of all new businesses are home-based, rather than operating out of traditional offices or workshops. While it’s true home-based businesses tend to not be as profitable as the brick-and-mortar setup (at least for now), it could be the ideal place for a newcomer to learn the ropes while making money from home and helping to keep start-up costs down.
If you’ve been mulling over the idea of becoming one of the 27.9 million small scale business owners in the United States, but you’re not sure where to start, here are some ideas to think about to get you started.
Take Personal Inventory
What are you good at? What are you passionate about? Have you discovered a problem in the marketplace that you think you could fix?
Steve Jobs of Apple, Inc. fame, was taken with Sony’s iconic portable Walkman. He apparently liked the concept but found the device to be too large and cumbersome. Later, he developed the iPod and changed the way the world accessed and listened to music. Friends Brian Chesky and Joe Gebbia discovered that local hotels couldn’t accommodate a large group of incoming conference attendees in San Francisco and decided to make a few bucks by offering to let people stay in their apartment on air mattresses. The idea took off and they named their resulting company Airbed and Breakfast, or Airbnb for short.
While these are revolutionary examples akin to winning the lottery, the anecdote is valid. These entrepreneurs found a hole in the market and filled it. Is there any current product or service you find lacking or a product you think you can improve? Is there something that you wish you could buy or provide, but there isn’t anything currently available? If so, you might have the idea for the next big thing in the making.
Passion equals success. When things get rough in your new small scale business, and they will, passion is what will keep you from giving up. What do you love? What are you passionate about? Are books your passion? Jeff Bezos started Amazon by selling books out of his garage in 1994. Are you a coffee lover? Three university students and gourmet coffee aficionados opened a coffee shop in Seattle in 1971 and Starbucks was born.
Take some personal inventory and start brainstorming for ideas. Some of the best and most innovative companies on the market today started with a small idea and a whole lot of passion.
Once you have your idea, the next step is market research. Don’t skimp here. The more you know about your product, the market, and the consumers you’re hoping to win over the better. There are trade journals and market reports for almost every type of industry imaginable. Read as many as you can. Here is a list of trade journals listed by industry to get you started.
Have a Business Plan
A business plan is a formal version of all the notes you’ve been taking about your intended business and what you hope to accomplish. Unless you are planning on funding your business on your own, you will need a well thought out and well-written business plan to apply for a loan or to entice investors. Besides that, is like a blueprint or a guide to help you to narrow your focus, develop realistic short and long terms goals, and detail everything you will need to do to succeed in your small scale business.
Do some internet research or go to the library to find out how to write a solid business plan. If business writing or composition wasn’t your forte in school, have someone help you. University students will work for cheap, or you can hire a freelancer to write one for you. Another option is to take advantage of the many freelance opportunities available by searching directories like peopleperhour.com or upwork.com for a business planner.
Hopefully, this was some food for thought to get you started on your small scale business endeavor. For more inspiration, here’s a list of low-cost small scale business ideas.
More Than Half of Small Business Owners Expect Revenue Growth, TD Bank Reports by Small Biz Trends, https://smallbiztrends.com/2018/08/2018-small-business-statistics.html
US Small Business Owners’ Optimism at Record High by Gallup, https://news.gallup.com/poll/239192/small-business-owners-optimism-record-high.aspx
How to do Market Research for Your Business Idea by Nationwide, https://blog.nationwide.com/market-research-business-ideas/
7 Steps to a Perfectly Written Business Plan by Entrepreneur,https://www.entrepreneur.com/article/281416