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How to Start Up a Business for Profit
Getting the Business out and Running: The Business Plan
I have started many businesses in my lifetime, but not all have been successful or even came close to making any money, so my experience in failure will make you better at getting what you need out of a business. There are many rules to a business, but the number one rule in any business, whether it be a church, school, military, factory, or institution is that you make a profit. This is the most important rule to have. If you can not make a profit and have some money left over, this business can not continue to exist. Some of the businesses "use" all their profit money to pay the CEOs and to reinvest, so this is ok as long as it is not in the red.
One word of caution, be sure of what you have for the name of the business will not be against the business itself. I named the consignment store, "REV-13", which I thought of end times and would bring in people off the street looking for great items for end times. This was the wrong line of thought. This brought in the religious and government groups questioning me and finding out just what I was doing. I must have stepped on a lot of toes with this sign. So be very careful of what names and what colors you use for your sign and icons. The name could be more important than what you are trying to sell.
The first start up is have a niche or a service or product that no one else has or that is in high demand. First step is to analyze the market to see what is available, what is in high demand and what you have to do to get into that area. Money to start up a business is not always a must if by chance you could work with a company that pays you first to buy, create or furnish a service, product or information. A person could have a "virtual" business in today's terms while this would not have been possible a decade ago. Example could be like E-bay and a company that would drop-ship when a customer would order through E-bay, paying you, then you, in return, pay the drop shipper to supply the customer.
In the order of an actual business building, there are many complications, including taxes, insurance, liability, electricity, heating, cooling, payroll, security and the sort. Many have gone bankrupt just trying to pay the taxes on the buildings or for a liability claim. I opened a consignment store one time and learned very quickly that it takes more money for the physical store building than what was being sold. The profit quickly went for paying the consignee, the taxes, the insurance of the building and the liability in case someone got hurt or damaged by any of the goods, electricity, signs, advertising, heating, cooling, telephone, and for those bad checks that were unforeseen.
The advertising costs were somewhat expensive compared to what I could ever get from the new customers. In South Carolina, at the time, very few people knew what "consignment" meant or how it works. The consignee brings in an item for sale, signs a contract to give the consignment store a time to sell the item, then splits the sale a certain percentage, of which this store split 50/50. The sign on the building and the sign on the road cost about 250 dollars, which was included in the start up costs. Just getting the store ready to open cost about 3500 dollars and about a month in work. Getting the consignees took months to build up enough to start making money, but the worst part was getting customers.
In some other businesses that I started, other people footed the bill. One business was in Erie, Pa., in which we had a 30,000 foot building and transformed it into a working tool store in a matter of months. Everything went very smooth, but took thousands in payroll, extra help and lots of improvements on the building to get past the codes.
The home-based businesses seem to be the apeal of entrepreneurs because they work as little or as much as they want and still have the control of their lives. One problem of this is the libility of their service and products. Another is the capital that might be needed to buy from home with out good credit.
So after finding a good product, line, or service that is your niche, start planning how to market this line. It is good to learn the rule of supply and demand, which states when the supply quanty goes up, the price goes down and when the supply is low, with demand on that service or product, the price goes up. You may be stuck with equipment for a service that everyone else hopped on board that created an overabundance of that service. Be able to bend, flex and find a new niche fast. As long as the demand is there, the goods and services will be sold and bought, but maybe by the most competitive company.
This is a fast outlay of what to look for in a start up of a business, but each person, if willing to dedicate time, effort and will to a cause, it will pay off, if smart in the dealings. But if you can buy low and sell high and be able to make a profit, the wind will follow your back for a time.
THE FOLLOWING SHOULD BE VERY IMPORTANT THOUGHTS THAT YOU SHOULD CONSIDER BEFORE GOING INTO BUSINESS. SOME ARE MORE IMPORTANT THAN OTHERS, SO CONSIDER THE FACTS. ALWAYS ASK QUESTIONS AND GATHER INFORMATION.
1) LOCATION, LOCATION, LOCATION -REMEMBER THIS-THIS IS VERY IMPORTANT WHEN ESTABLISHING A REAL WALK-IN BUSINESS.
2) CLIENTLE -WHO DO YOU WANT TO ATTRACT
4) WHAT ARE YOU GOING TO SELL/BUY/INVENT/INVEST/SERVICE
5) REMEMBER THE S.W.O.T. OF YOUR BUSINESS OTHER BUSINESSES- THIS IS VERY IMPORTANT. (STRENGTHS, WEAKENESSES-OPPORTUNITIES-THREATS)
6) DO YOU WANT A VIRTUAL STORE OR ONE THAT IS MATERIAL STANDING
7) DO YOU WANT TO HAVE MATERIAL MERCHANDISE,VIRTUAL MERCHANDISE OR SERVICE.
8) THE START UP COSTS MAY TAKE 5 YEARS OR MORE TO PAY BACK- IT TAKES A WHILE IN SOME CASES TO BUILD UP A CLIENTILE BASE.
9) IF HIRING ANY EMPLOYEES, MAKE SURE OF ALL DOCUMENTS ESTABLISHED CORRECTLY
10) THERE WILL BE TAXES, TAXES, TAXES AND MORE TAXES-ALSO LICENSES-FEES AND MORE FEES AND THEN MORE TAXES. BE AWARE
11) KEEP ALL RECORDS-ALL RECORDS ON A DAILY LOG- ALL MILAGES, ALL TELEPHONE CALLS, ALL ENGAGEMENTS, ALL CONVERSATIONS LOGGED-THIS WILL BECOME VERY IMPORTANT !!!
12) PLAN FROM DAY TO DAY- IT WILL NOT BE THE SAME ANY DAY- SOMETHING WILL ALWAYS HAPPEN DIFFERENTLY.
13) TAKE TIME TO RELAX- YOU WILL GET BURNED OUT OTHERWISE- MAKE TIME !! DO IT CONSISTANTLY-
14) FOLLOW ALL LEADS- ALL OF THEM GO SOMEWHERE- BUT YOU MUST HAVE PRIORITIES !
15) LEARN BY YOUR MISTAKES - DON'T DO THE SAME MISTAKES OVER AND OVER !!
If you are going to start a business, be aware that all business adventures do not succeed and not all are profitable. Some start off great and then fizzle. The old saying that the businesses are built on supply and demand does have a play on your successful and profitable business.
At one time, bottled water could not be sold, but with careful merchandising, advertising and promotion, water is not profitable and in demand. Some items are just fads and fades with each phase. Libraries with hard back books were at one time in demand, but with the invention of the WEB, the internet and electronic downloads, hard/soft back books are not in demand. The trend, the demand and the psychological mindset marks the merchandise and items as marketable, demandable and saleable.
Another idea that the business owner should take in consideration is the cost of doing business. Sometimes the cost outweighs the worth of the item being sold. The cost of getting the item to market sometimes costs more than the item being sold. The minimum wage has increased in some cities, towns and states to the point that businesses can no longer afford to sell some items and to have the hourly personnel to provide services to customers.