Starting a Small Business in 2021?

Here are some tips to keep in mind

Are you thinking about starting a new business in 2021?  Most people have some hesitation about doing so, which is understandable considering that a high percentage of all new ventures ultimately fail.  But with enough preparation and a well-thought out process for making decisions, you can significantly increase your chances of success.

In some ways, it’s now easier than ever to become an entrepreneur.  Here are some things to keep in mind before starting a new business.

Nailing down your creative focus

You likely want to start a business because you have a great idea, maybe you even have several!  How do you pick the right one to focus on?  Creative entrepreneurs can sometimes be held back by too many conflicting ideas that keep them from sticking to one profitable idea.  So before you start your business, do some research and a deep dive into yourself.  Is your business venture something you actually enjoy doing?  What will your day-to-day look like once you get started?  Do you have a realistic way of setting goals and measuring success?  It’s important to ask yourself these questions before launching a venture, so that you don’t end up quitting soon afterwards and going in another direction.

Knowing yourself

Being your own boss may sound great, but there’s no denying that it’s not always as glamorous as it may seem.  There will be rough patches, and ups and downs.  How comfortable are you with handling conflict?  Are you resilient enough to deal with stressful situations on your own?  Large companies have entire departments to handle different areas of their business, but at least in the beginning you’ll likely be doing everything yourself.  It’s a good idea to evaluate your strengths and weaknesses and make a plan to address the areas where you might not feel confident.

Having the right support

Although the buck stops with you as the business owner, that doesn’t necessarily mean you have to go everything alone.  Identify people in your “tribe” early on-these can be family members, friends, or like-minded folks in your community.  It ‘s so valuable to have someone you trust to bounce ideas off, or talk through a difficult situation with.  It’s also a good idea to build relationships with some of your peers in the industry-they may seem like competitors, but they are likely facing the same struggles as you.  

Financial support is also important, so having a plan before you start is essential.  There are more financing options available now than ever before.  It can often take a year or two for a new business to see a profit, so take advantage of grant, loan or credit options when necessary.

Knowing your tax, insurance and legal requirements

Don’t wait until something goes wrong to look into these areas.  Research the insurance coverage you’ll need, and find a good accountant.  Making sure all your ducks are in a row when you first start ensures that you’ll never have to worry about compliance.  Every business owner’s worst nightmare is finding themselves in a situation where they have unknowingly done something wrong (or even illegal!) and have to deal with the ramifications after the fact.  Here is a rundown of questions you’ll need to ask yourself or someone else:

  1. What’s the best way to structure my business?  Will it be an LLC, sole proprietor, or S-corporation?
  2. What insurance do I need in my industry?
  3. Do I need any permits from state or local governments?
  4. What documentation will I need in order to open a business bank account?
  5. How will I track my earnings and expenses?
  6. What is my plan for paying taxes?
  7. Will I need to trademark or copyright any aspects of my business?
Having the confidence to market authentically

This can be a struggle for new businesses, especially when all the advice on the internet seems to repeat over and over the importance of positioning yourself as an expert in order to land clients.  It’s a fine line between being confident in your offerings and overselling.  Here’s my two cents on how to market yourself confidently at each stage of your journey.

  1. Recognize that everyone starts somewhere.  You’re not going to be at the same level as someone who is 3-4 years in, and that’s okay.  You may have to start small and work your way up, raising prices as your skills develop.  
  2. Justify the prices you charge by constantly adding value to your product or service.  Maybe right now you are charging less than your competitors, but you have plans to invest in tools or skills in the next six months that will allow you to offer additional value to your customers, and you will adjust accordingly then.  There is a market for everyone, and your products or services are priced correctly, you will always be able to find customers in your market.
  3. Work on your personal confidence by doing self improvement.  Many people (particularly women) have self-confidence issues to begin with, and this can translate into lack of confidence in your business.  There are many ways to boost your self esteem.  This is especially important when it comes to sales, as you’ll have to be confident to sell yourself and your business to potential customers.

Good luck!

Starting a business can be very exciting, and you may believe that being passionate about your idea will be enough to propel your business into success.  But in reality, careful planning and having realistic expectations are much more likely to help you grow into a profitable businesses.  Asking yourself the questions above prior to starting up will help too!  And as with everything, good things take time.  So be persistent and you will be on your way to being a successful entrepreneur!