Starting a side business takes more work than most people assume. However, the rewards are worth the work if the venture flourishes. Use these steps when starting any new side business.
Evaluate The Idea
This step helps determine if the idea will work. In many cases of failed business ventures, someone runs with an idea that is not ideal for one or more reasons.
For example, opening a quality organic health food store in an area where most people live at the poverty level would mean very few sales.
It is important to think about the market and the ability to reach them. Any side business should match the online or local market, and the market should be accessible. Test any idea before turning it into a business. Promotions and independent sales or surveys often help determine how well an idea will work or how well a product will sell.
Always remember that the most successful products and services solve some form of problem.
Develop A Business Plan
During this phase, set specific business goals and plan a schedule. Find out how much time it takes to obtain licenses and complete other necessary steps. Some steps may require waiting. However, other steps can be taken during those times to shorten the total amount of time it takes to go into business.
Have a system for setting up new goals, determining time limits and checking goals off as they are met.
Obtain Licenses And Insurance
If the business requires a trademark or copyright, take care of this first. People who want to set up their side businesses as corporations or partnerships can hire an attorney to complete the work or file the forms themselves. It is best to purchase a packet online and do independent research to ensure all steps are completed.
Research any local and state business licenses needed for the type of product or service. Be sure to obtain them before releasing advertisements of any type.
Every business should have insurance to cover faulty products or a potential lawsuit. Liability insurance is a must. Do not simply purchase the cheapest policy available. If the policy has a low limit, consider purchasing umbrella coverage for added protection.
This is especially important for sole proprietors. If a sole proprietor is sued and does not have adequate coverage, personal assets are seized by the court to satisfy the judgment.
Set A Budget
Plan how much money will be allotted for inventory or necessary equipment. Make a list of all expenses such as insurance, rent, supplies, monthly operating bills and all other expenses. Develop a plan for staying on budget.
When the side business is ready to launch, the next step is networking and advertising. Do not overspend on advertising at first. Try networking organically, and take advantage of social media sites and free blogs for connecting with potential customers.
As a rule, it is best to start small with a side business. Let it grow naturally as time and money allow.