Tips for Starting a Small Business

Donna Jefferson, the publisher and owner of Jefferson Communications, recently spoke to at an event sponsored by Connecting Women Media. The topic was Women of Invention. With twenty years experience of running her own business, Jefferson spoke to the group about the steps to take before starting a business. 

Some interesting statistics about small business:

What percentage of U.S. businesses are considered small businesses?  (Less than 500 employees)
Of all the new jobs created what percentage is from small business?
What percent of small businesses do women own?
28.2% of all small businesses
How many small businesses fail in the first year?
How many fail within 5 years?
90% fail in within 5 years
Women own 6.5 million businesses, employ 7.1 million people and generated $939.5 billion (2002 US census)

Running a small business has both good points and bad.

Jefferson outlined them both from her perspective.
 Time to spend with kids
 Love my job
 Financial Rewards
 Get to hand-pick who I work with
 Personal satisfaction of creating something that the community values and depends on
 Enjoy the challenge of continually improving the business
 Get to do really cool stuff

• Working hours can be long.
• Continually changing business climate.
• Responsibility of making sure there is money to pay employees.
• Disagreements.
• Managing people.
• Keeping up with technological advances.
• Staying ahead of competition.

Three Steps to take Before You Start Your Small Business

1. Do Your Research
2. Decide Your Goals
3. Make a Plan

Do Your Research

Just because you’re passionate about something doesn’t mean it will make money.
– 70% retail businesses owned by women. Profitability retail = 6.2%
– Average boutique annual net is around $18,000
• Who is the competition for your new business?
• Is the size of your community large enough to support your new business as well as any competitors?
• Can you find the work force or expertise you need for your business?
• How much is it going to cost to start and set up your business?
• How much time and money are you going to need before your business is profitable?

Define Your Goals

How Much Do You Want to Work?
– I wanted to be home when kids got home from school. Will childcare be an issue for you?
How important is it to make Money? How Much?
Define your financial goals. Can your proposed business generate the income you want?
Get the Support of Your Significant Other
– But don’t be dependent on him/her to provide free labor

Make a plan that includes the following:

• Mission (will help in decision-making)
• Goals – financial, business and personal
• Budgets – at least 3 years out
• Timeline
• Marketing
• Web Site -  good one is a must have

– Act like you want to be even if you aren’t there yet 

Work the plan – revise the plan – work the plan

• Made to Stick, by Dan and Chip Heath
• Millionaire Women Next Door, by Thomas J. Stanley PhD
• Wharton School of Business
• Robert S Smith School of Business, Univ MD

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