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Starting Small Businesses Has Never Been Easier – small business

I believe that it’s easier to succeed with small businesses than ever before. There are more opportunities for entrepreneurs to start small businesses today than at any previous time.

Here are some good reasons for why I believe this is true.

A) With the increase in population comes an increase in opportunities for small businesses.

Generally, a sparse population requires a small business owner to provide a wide variety of goods or services to survive. With a denser population, the small businesses can still survive by providing a very narrow range of products or services.

For example, in a smaller population a small business which provides gardening services would probably need to offer many things. Services could include general garden maintenance, planning, tree felling, lawn cutting, vermin control, pond planning and maintenance, hard landscaping etc.

With a bigger population a small business could thrive perfectly well by providing just one of these services, as there are more people who will need it.

B) The costs involved in starting and running small businesses has never been so low in proportion to income.

Technology has replaced many of the things which people used to do, and technology does the job a lot more cheaply.

Today it’s possible to reach literally millions of potential customers around the world very cheaply.

For example, only a few decades ago the cost of mailing to thousands of households was prohibitively high. Unless you had a very good product or service which sold well, a small business just wouldn’t risk it.

Another example, business premises security used to involve security guards walking around checking that all was well. Now a good security system can be bought for less than 1 week’s pay for that security guard, and it will work 24 hrs per day for years, for no pay.

C) Because modern life is so complex today, small businesses and individuals are open to new ideas, products and services like never before.

This creates a huge market for training courses, information provision services, educational aids, specialised products and services, novelties, etc.

With this great diversity come great opportunities to combine different products and technologies, thus making whole new areas of business possible.

For example, you can combine a low-light camera with wireless communications and a bird box. This means a nest may be watched remotely on a television or personal computer screen.

Another example would be to combine voice-chip technology with passive infrared technology to make it sound as though you have a huge dog indoors whenever anyone approaches your house.

In our recent history, these opportunities just didn’t exist.

D) It may not feel like it, but many people today have a lot more leisure time and a higher disposable income than in any previous age.

This spare income (and with the current attitudes to loans, a little more besides) tends to get spent on sports, games, hobbies, crafts, amusements, entertainments, holidays and weekend breaks etc.

This creates many opportunities for the entrepreneur to start up small businesses to satisfy all this extra demand.

E) To thrive in a modern society you need to have a lot of different skills.

Nowadays people cope with a variety of complex tasks. They buy and use a wide range of consumer equipment, fill out many forms, and communicate with all kinds of people from all walks of life (often from different countries and cultures). They also do difficult transactions like house purchasing, and so on.

All this is a long way from the average people who were around just a few hundred years ago. Many were farm labourers who could barely read or write and never travelled more than a few miles from home.

So now, the pool of potential business people is far greater than ever before. If a person can live well in a modern society, they already have the abilities they need to start up a small business enterprise and succeed.

The good news also is that if you lack a certain skill which your small business needs, then you can probably employ someone with that skill far more easily than ever before.

F) More people have access to money than ever before.

Until the late 1960s, most people were paid weekly and spent money as they earned it.

It was normal among manual workers to run right out of money around the time of their next pay packet, which often contained notes and coins!

Today most people have many bank accounts (with overdrafts) and access to credit cards, which alone have spending limits equal to a half or full year’s income.

Savings and share holdings are greater than ever before. A large proportion of the population can raise money on their house and if they don’t mind paying a high interest percentage, they can borrow with no security at all.

A great variety of people and institutions are now willing to lend money for good small businesses proposals.

With access to credit, you can buy the product, ship it to the customer and get paid before you have to pay for the goods which you sold. This just wasn’t possible until very recently.

G) Advice, courses and books about starting small businesses are within easy reach of everyone.

Researching your chosen business area has never been easier with the Internet so readily available.

Not so long ago, you would have needed to buy many books and read them all to get the specific information you required. Now you can ask a search engine very specific questions and get very specific answers, almost immediately.

This frees up small businesses and enables them to be far more productive and enterprising.

H) If you start a small business today you have an immense amount of technology available to you.

Computers, printers, copiers, audio and video recording and playback equipment, telephony and the internet are all easily available to any entrepreneur wanting to get started in a new small business enterprise.

Not long ago, the average multi-national company lacked the computing, communicating and printing power available to the ordinary person today.

You can probably think of at least 6 different ways to get a simple message to someone on the other side of the world. 5 of those messages would typically arrive less than 1 minute after you sent them.

Just 100 years ago, (and remember mankind has been around for about 3 million years) this same message would have involved horses and steam ships and would have taken months.

This massive improvement in technology (especially in communications and information) has really opened up the field to the individual who wants to go ahead with a new small business venture.

I) Small businesses starting up today have far more choices available to them.

In previous times, it was quite common for there to be only a few companies that they could go to, to buy business supplies. Whatever business you care to name, you would not find many suppliers of the materials needed to conduct that business.

Unless your business is in a very specialist area, you will now find you can source your supplies from a great many firms. This in turn drives your costs down, as you can shop around for the best deals.

For example, there used to be very few ways to get your goods delivered to your customers. Nowadays you could chose from literally hundreds of different carriers.

New companies can chose anywhere in the world to set up their small businesses, or indeed where to place any part of their business.

I know of a successful paintball company, which operates in the UK in summer. But when the business falls off due to the cold winter, they find new customers by simply moving the company to Brazil, and then return the following spring.

They also take advantage of the cheaper labour in Brazil to manufacture the paint balling equipment, and when back in the UK use the greater expertise in the UK to program their systems.

Not so long ago this flexibility of operating a small business would have been totally impractical.

Conclusion.

There are far more opportunities to start small businesses than ever before and entrepreneurs who do start new small businesses at home are more likely to succeed.

There are more potential customers, it costs less to start up and you have more choice over the kind of business to go into. Other benefits are a more skilled and educated workforce, and easy access to financial support.

If you do want your own enterprise, you can also use the power of the Internet to carry out good and fast research, and to support your business in many ways. I believe there has never been a better time to start up new small businesses.

Seattle-based architect Milan Heger was on the edge of the abyss. Before the economic downturn, Heger had a thriving business designing residential and commercial properties and, in 2005, launched a furniture line. His work appeared in store windows and magazine articles. Then came the Great Recession and the housing bust. Heger’s contracts vanished. He had to cut his staff from five to one. By 2009, he was waking up nights in a cold sweat, worrying about his family’s future.

“The biggest pressure is the status of my mortgage, college payments,” Heger says. “I felt not like a failure, but like a father who wasn’t doing what he was supposed to do. I’d sit in the car in the driveway and not want to get out. It’s hard and continues to be hard.”

His resources remain so stretched that he recently cashed in a portion of an IRA.

Unfortunately, the economic downturn provided Heger with an excruciating lesson in one of the least-talked-about aspects of running a business: living with risk, and the price it exacts on brains, bodies and bank accounts. Though entrepreneurship may offer the occasional act of swashbuckling derring-do–or, at least, high points of excitement–business owners usually just have to move forward through a not very glamorous, prolonged state of pulse-pounding tension about whether their business will make it.

Building and sustaining a business is a day-in, day-out battle between uncertainty and willpower. Your ability to persevere through prolonged periods of risk and manage the stress that comes with it is as important to your company’s survival, as well as your own, as any business decision you’ll have to make along the way.

“Running your own business takes nerves of steel,” says Dan McDade, founder and president of PointClear, an Atlanta-based prospect development company. McDade says he once had to wait for a client to overnight a check so he could make that week’s payroll.

Risk is, of course, part of the price of starting a business. You ante up your nest egg, credit rating and time in exchange for the chance to determine your own destiny and reap the financial rewards. The problem is you don’t know when or if the payoff will come. That means having to withstand long periods of uncertainty with no discernible progress while bleeding resources and making decisions based on ever-changing market conditions.

The academics call the ability to get through this twilight zone a “tolerance of ambiguity.” A blend of stamina, self-belief, nerve and optimism, it’s one of the hallmark traits of entrepreneurs. A low (or nonexistent) tolerance of ambiguity keeps risk-averse people at corporate desks. The better you can handle the unknown, the higher the odds of outlasting your business’s biggest challenges. Survival comes down to managing the fallout of long-term risk, from living with debt to the high anxiety of chronic fear and stress.

Cash Crunch
The best way to understand how you handle living with risk? Look at your ability to tolerate debt and its potentially gut-twisting consequences–the savings or house that may be on the line, a shrinking income, mounting loans or credit card debt. Financial risk is a bona fide existential threat, making it an easy trigger for the fight-or-flight machinery of stress, which only makes matters worse.

Mounting debt and dwindling reserves can definitely put the vise grip on your dream. “We put a lot of money into this. $30,000. It’s still not paying the bills. We feel like we’re drowning,” says Paige Smith, the Sacramento, Calif.-based owner of Pure Belly, which sells obstetrician-endorsed maternity wraps and bras. A mother of four whose husband was laid off from his job the day her company launched, Smith has been hanging on through a white-knuckle ride.

She would do well to follow Kim Holstein’s line of thinking. The co-founder of Chicago-based Kim & Scott’s Gourmet Pretzels, Holstein was in the same place not all that long ago. “It was very scary to be in debt,” she says. Holstein and her husband started the company on a $25,000 credit card line. Whenever they hit a rough patch, like the eight-month stretch when sales headed south, they kept coming back to the original opportunity: the niche for a great soft pretzel.

“We focused on the possibilities instead of the fear,” says Holstein, whose pretzels now pull in $15 million per year.

Entrepreneurs need to practice focusing on what’s ahead. They need to compartmentalize, keep their focus steady and shove worries aside. They have to believe in the power of the quantum leap. You may be surrounded by cardboard boxes and subsisting on fast food, but your vision for your company’s future must remain clear.

“Entrepreneurs have a pain threshold,” says Tommy Knapp, assistant professor of clinical entrepreneurship at the University of Southern California’s Marshall School of Business, who also co-owned 19 surf shops in Hawaii before selling them to Billabong. “Where others say ‘I’ve done enough, I’m not willing to move forward,’ entrepreneurs will keep going.”

Debt doesn’t make you a good entrepreneur, Knapp says, and the goal should be to get out of debt as soon as possible. He advises entrepreneurs to manage financial risk and the stress that comes with it by minimizing debt through creative husbanding of precious cash. “Great entrepreneurs get their customer to put down a deposit, or they go to the vendor and ask [for] extra terms,” he says. Push for quick payment and delay any cash going out from your coffers.

Emily Blumenthal, New York City-based founder of Handbag Designer 101, suggests an additional sanity-saving strategy: “You always need another source of income. I’ve always freelanced and taught classes and kept other sources of money as a backup.”

Pressure Valve
According to the SBA, 70 percent of small businesses fail within the first seven years. The risk is real, as is the strain that constant uncertainty places on one’s nervous system. Chronic stress can lead to any number of serious health problems, from insomnia to heart attack and stroke.

Smith of Pure Belly has been going on just three hours of sleep per night for a year. She’s lost 20 pounds. “It’s physically beating me up. I forget to eat. I’m so busy thinking about what I need to do for the business I’m not taking care of myself,” she says, adding that she has no strategy for coping with the stress.

Entrepreneurs need to build a stress management plan as a companion piece to their business plan. It should include techniques to help cope with the pressure cooker of living with uncertainty, from reframing and disputing irrational thoughts to relaxation exercises ( see sidebar ).

The stress response hijacks the rational brain and turns the wheel over to the emotional hub, the amygdala, which loves to jump to the conclusion that the sky is falling. When the inevitable setbacks or pressures occur, the amygdala responds as if it’s Armageddon, firing off catastrophic all-or-nothing thoughts–that your business is failing, for example, or that you’re a loser. The stress response goes off before we can think rationally about the situation, so you have to learn to recognize when you’re in its grip before the emotional nonsense takes over your brain.

“Ask [yourself] what is the real threat and what is making it threatening,” says Serena Wadhwa, a clinical therapist at Alexian Brothers Behavioral Health Hospital in Hoffman Estates, Ill.

Despite the setbacks, you can’t keep a good entrepreneur down. At least not for too long. Architect Milan Heger has made some strategic adjustments, shifting to affordable instead of luxury homes. He’s excited about a new line of green furniture, including a coffee-bean chair, and a book he published last year, The Art of Freedom.

“I’m more clear than ever that I want to follow my passion,” Heger says. Even, he says, with “scraped knees.”

Our government believes they are responsible for creating jobs in this great country. Well, they have it all wrong. It is the American dream that has created most of the jobs. That’s right—more than 60 percent of jobs created in America are created by the small businesses, according to the Small Business Administration.

Not that long ago, retirement meant long days punctuated by occasional games of golf and bridge. But today, with lengthening life expectancies and dwindling pensions, many Americans are looking to create their own jobs. Here are some tips for those of you that think you want to start your own business:

Common characteristics. Mature entrepreneurs differ from their younger counterparts in several critical ways. For one, they are usually in a much better financial position than younger entrepreneurs. Their bigger financial cushion—retirement packages, nest eggs, or home ownership—affords them flexibility in the initial stages of a start-up, where funding is often critical. Because they can often rely on other sources for current income, they are in a better position to take entrepreneurial risks.

Creativity and business acumen are also key characteristics of older entrepreneurs. Having been tested again and again in their lives, they’re not afraid of failure or worried about what others will think. Instead of that urgency to “make it,” they get their satisfaction from the process of building their companies.

The type of businesses typically started by folks who have retired varies widely. Consulting, small retail businesses, and bed-and-breakfast establishments are perennial favorites. A growing number of late-life start-ups also involve Internet-based businesses. While most start-ups are related to an individual’s former career, some break into completely new territory.

Know your limitations. There are several considerations to bear in mind before taking the leap. Start-ups can be physically and emotionally draining. Are you willing or able to work the long hours that may be required in a fledgling business?

Then there’s financial vulnerability. Compared with their younger colleagues, the mature rely much more on personal investments to supply a portion of their income. For this reason, they are advised not to sink too great a portion of their investment portfolio into a new business and should avoid pledging as loan collateral personal assets such as a home. Here are some other items retirees should consider before starting a business:

1. Build on already established contacts and expertise, which can give you a competitive advantage in virtually any business.

2. Start small and gradually work your way into a full-blown business. This will give you time to assess whether you’re willing or able to take on another full-time career.

3. Consider your income needs before investing a portion of your nest egg in a new business, and think twice before taking on any personal debt.

4. Consider what business entity structure would suit your business the best—S-corp, sole proprietor, or partnership.

Starting a new business can be one of the most rewarding ventures of a lifetime, but they don’t become successful overnight. Being able to commit both mentally and physically for the first three years will help you make the most of your opportunity for success.

Good luck and prosper.