Dreaming ‘big’ is not a bad idea, but we must remember who and where we are and to realize what our limitations may be if any. It’s simple – what is feasible and what isn’t. When creating your business plan, two critical resources are time and money.
Determining how much you can squeeze out of your budget for your business start-up, it is all too easy to consider using credit. (“funny money”). This would be a bad idea unless it is an emergency. This is so not just because you are paying interest on that money. You also have to pay the bill each month. This adds up quickly and often we can lose control – even with the best intentions.
Consider your income, versus your expenses to live. The balance would be what you have to use for your business or whatever. If your business is a top priority, you may be surprised how much ‘extra’ money you actually have if you are willing to make some sacrifices. Are new clothes critical right now? Are they more important than your business? If not, then don’t buy it right now. Is that movie the most important thing? What would happen if you didn’t see it right now?
Analyze what you would need to start up a business online. There will inevitably be advertising and marketing expenses associated with any business. Online they are much more reasonable than you likely would expect. Advertising is probably the first priority since you need to find customers. If you are going to make sales, that is the way to do it quicker.
The free ways can also work but require a lot of effort and more time than if you are able to pay for advertising. There are many ways to go online to find what you need, and while much cheaper than offline, there are still expenses.
There are usually maintenance fees such as your Internet connectivity, hosting, domains and membership fees if you are an affiliate or distributor. These costs are necessary. These are not something you want to skimp on as reliability is important.
Again you will find that all things online are much more inexpensive than in the offline world. You can claim tax deductions on the money you spend for your business including a percentage of your expenses to run your home if it is used for business. Consult your government’s tax website each year as the rules do change.
You may be playing a losing game if you are using credit to fund your business start-up, unless you are prepared to pay your entire balance each month. The maze begins because when you have cash you need to pay your credit card and other bills. If you need cash even for necessities, you are forced to use your credit, aka ‘funny money’.
It may just seem natural to use your card for business expenses, particularly online where you may be required to use a credit card in order to make a purchase. If you start planning to start a business by creating a savings account that will be for business operating expenses, it makes much more sense to your bottom line. If you have saved sufficient funds in your savings account to make a purchase, then use the credit card, but prepare to pay the entire balance from your savings as soon as you can (try not to accrue interest) and no need to since you already have the money to pay.
Ask yourself if you have any gambling addictions or compulsive spending habits. Please be honest with yourself because if you do, then you have to be very disciplined in your spending, more so than others who do not feel compulsive about spending money. You should definitely get serious about this before you go bankrupt. Your situation can get out of control if you do not have enough income to cover your expenses. Never speculate, which even with a fancy name is still gambling.
If you are using credit now, do some simple math with examples. Do some calculations that prove how interest due on the money you borrow from your credit card adds up quickly and compounds. It is costing you a lot of money to use credit instead of cash (savings). Never spend more than you have immediate custody of, no matter what the excuse, including investing in your business. Only use your credit line for emergencies, other than what you can pay each month to erase any balance, as defined above.
Preparing for the unexpected should be done before it happens. You never know when the unexpected will happen. The idea to be prepared ‘just in case’ is a good, safe one. We hope nothing catastrophic ever happens, and if it doesn’t you have a windfall. We need both savings for emergencies and a business operating budget. You can probably have two free savings accounts with minimum balances.
If necessary part of your business plan should start with how much money you have to invest each month to fund the start-up. You should start putting away money into a savings account if you have a job, each payday. Even $5 will add up believe it or not if you are consistent and don’t use it.
To be sure you stay on track, which is easier when organized, you should have at least a tentative plan. You need to know if you have any money you can invest in your business or you must find free ways to do everything at first. You should have a plan so that you can commit your time.
Your qualifications and skill-set that you have acquired in your working lifetime are the core assets you have to work with. They represent the foundation that you will build upon to create a profitable business. You can always get a lot of free information and even ‘formal’ training online if you would feel better to update your skills.
It is fairly important that you be confident in what you can bring to the table when starting a business of your own. You may need to learn to use simple technology, and even learning about a new industry or niche may be on the agenda for you. Since you will be technically ‘self-employed’ it is more or less up to you what you do or don’t do. Probably best if you can avoid doing things you really don’t like if they are not necessary. If necessary then learn to live with it.
It may help you to do some self-assessment exercises at the planning stage of developing a business. Like an inventory, listing what exactly you have to work with. This will make you feel strong and/or point to things you may need to get some more details about before you can proceed.
On purpose or not, you will be learning lots of new things as you go along – even while still in the planning stage. If you have an open-mind and are willing to learn and to do the work necessary, you will do fine. It is best to get anything you need to learn out of the way so that it doesn’t become an obstacle that keeps you from making progress.
Be honest and play a role reversal game. Take stock of your skills and attitudes about work and ask yourself if you would you hire you? Apply for a job in your own home business. Write a cover letter resume and state why you are qualified for the job and really believe you are the best candidate and should be chosen for the position.
Remember not to use ‘convincing’ behavior or ‘selling’. Merely present yourself and leave it at that. (selling and convincing can create an atmosphere where people will resist rather than cooperate) if you do not do it in the right way.
Use power words to describe your assets such as for example, accurate, dependable, reliable, flexible, proactive, timely, can learn quickly, are efficient and enjoy helping others. Spell out you skills – mainly emphasizing the duties for the available position. You can also include ‘life’ skills. For example you were on a debate team, or committee at your church or club.
Final Exercise: Provide actual statistics and other information to demonstrate where you have had on-the-job experience using your skills. Provide the position title and define all the duties that you performed. Give length of experience and special recognition, promotions, and accomplishments. Be sure to include references the employer can contact.