- Business and Employment
Starting a small business to improve long term life style
A small business can be a wonderful way to increase wealth and enable a better lifestyle, pay for a comfortable retirement, and take away the need to work full time.
I have owned, managed and operated quite a few small businesses over a period of 40 years and developed several ways to create the lifestyle I wanted both at work and play. If you start a small business it should be doing something you love to do either as a hobby or an interest you want to develop. If you love your work it is much easier to remain motivated.
The days when you could start a small business in your back yard with $4 of your own, a $50 loan and a borrowed trailer to pick up your stock are long gone. Turning that business in to a full time income in a few weeks is just about impossible these days with the exception of used goods, which can still grow very quickly and offer high returns to allow reinvestment out of profits.
If you were to start a business in your back yard today, your neighbors would probably have the council inspectors around the same day you started. As for hammering all night building shelving, using the electric welder till 3am. I don't think so. Small business today face more stringent controls, even at start-up.
There are so many different regulations, licenses and rules that small business models need to be costed to reflect the expense of administering compliance and paying these often annual fees.
Many entrepreneurs get bogged down when confronted with the reality of these business constraints, but if you have a good profit, farm that stuff out as soon as you understand it.
What if you fail? You still have obligations to unwind all these compliances and fulfill obligations to existing clients/customers. A very high percentage of small businesses fail, but apart from the unknown and unknowable such as poor health, nasty weather or other disasters, most of them fail because they deserve to! How many times have you had lousy communication and crappy service from a small business?
The usual bricks and mortar constraints you hear people complaining about today have troubled small business for many years. Not much has changed in offline business except for Councils and Governments making more rules for you to comply with. These rules have been an ongoing nightmare for many businesses.They have not always seen them coming and had no plan in mind for such legislative changes to health and workplace safety or new laws which affect profit directly or indirectly by changing the playing field.
Understanding risk versus profit in small businesses.
While aiming your small business at high margin niche markets can be very profitable, alas, as with all high profit businesses, they have proportional risks. High risk is always directly associated with high profit.
Knowing what those risks are takes knowledge and research, but is not as difficult as finding out how to factor the risks enough to make the business very profitable and low risk for you, but not your competitors.
I can show you exactly what works, but it's a bit like leading a horse to water. You may not be ready or even able to drink, and I can't help with that, past telling you how it works in real life, and that you must have a new angle to beat your competition and make big money in a small enterprise.
Here are the things that work all the time in any small business.
- Attitude. If you are on the ball, smiling and motivated, you are in the game.
Knowledge. If you know more about the product than your competition you have an edge that your customer will soon recognize.
- Services. Go way past "over deliver." Provide a unique service or free advice that is unique to your business, and pay for it out of your margin. If it costs you nothing, that may well be what it is worth to your customer.
There are no businesses that I know of that provide big
profits without high risk. Even huge companies that appear bullet-proof
like British Petroleum can still take a hit large enough to sink a
small country. The only way to remain bullet proof is to get in front and stay there, if you drop the ball a dozen new small operatives will fill the gap, leaving no market size for anyone to make real money from.