Step 2: How will you conduct your business?
There are several questions to ask before starting a business. The answers will guide you around the pitfalls that cause most small businesses to fail. And, yes most small businesses do fail…..because they didn’t ask these questions before starting.
These questions are:
Is there a need for your product/services locally? With the internet as competition, it is becoming much harder to make a local business profitable. The size of the market is getting smaller and the competition is getting larger.
Today’s digital economy almost requires you to go digital or go bankrupt. Can any part of your business be done online?
You can use sites like Etsy or Amazon Handmade to sell craftwork. If you like to write or teach a skill, you can use Amazon Kindle, Clickbank, Udemy or Lulu to publish your products. You can even use Pinterest and Facebook to advertise your local products for free. With a little research, the sky is the limit.
This step is about conducting your research and creating a business plan.
Why write out a business plan in the first place? Don’t you only need business plans if you are borrowing money from a bank? (Paying cash for all of your purchases is a major step to Escaping The Rat Race.)
Yes, you do need a business plan when borrowing money. The bank studies the plan, looking for reasons the business will fail.
That’s exactly why you need your own business plan. Holes in your business will stand out like a sore thumb. You can fix the weak points before you even start.
Don’t let a business plan scare you. It doesn’t have to be complicated, especially if you are not dealing with banks. All you really need are some simple basics like:
A summary of what you want to do. Where do you want this business to go? What are your strengths and weaknesses, and how will they affect your plans?
A list of the products you are creating. These products don’t have to be the traditional mini-farm products like veggies and chickens. Are you an artist? Do you like to write? Are you a good teacher or tour guide? You get the idea. Your possibilities are endless.
A list of the costs for creating those products. Time, labor and materials are all included in this list.
How can one product reduce the cost of another product? Goats can clear off the brush for your future garden. They can also fertilize it at the same time. Then you can sell your baby goats. See how one product can have multiple uses?
How are you going to market those products? We mentioned this part earlier. Will your products be sold locally? At a nearby city? Or, can you use the internet for a worldwide market?
How are you going to deal with finance issues like cash flow and emergencies? Unexpected things always happen. Do you have an emergency fund figured into this plan? No emergency fund means you are working on a hope and a prayer. Don’t base this dream on luck. Create an emergency fund, even if it’s only $10 a week. I guarantee you will need it sometime down the road.
Do you have the right resources? If you are creating e-books, selling crafts online, or running a blog with affiliate links, naturally you will need access to the internet. If you are living in the country, that may not be available. If you are creating a mini-farm for a farmer’s market or local restaurants, you will need several different resources.
The point is, do you have what you need for your business in the location you want to live?
Can you do the work? That mini-farm takes a lot of physical work. Are you in good enough shape to do the work. Writing a blog or an e-book takes a lot of discipline to stick with it until it is finished. Look at your strengths and weaknesses and decide what you can and can’t do.
Do you want to do the work? This is an important question. Think it through with each business type. Traditional farming takes a lot of work. You will spend a lot of time in the hot sun. Raising livestock requires a daily commitment that will tie you down. You cannot take off for a small vacation without planning for their care. Dairy cows and goats need milking every single day. If you aren’t willing to do that, then don’t consider them in your business plan. What does your business need? Are you willing and able to provide all you need? If not, can you designate some of it to someone who can provide it and still make money?
Can most of that work be automated so you won’t become overwhelmed with all the work? Automation is the answer to the traditional operation of a business. If you don’t have to be there every single day, you can have a life outside of the business. You will need breaks from the routine. If you don’t build in the automation of your business, it will overwhelm you. Your dream will become a nightmare.
Lee (The Slacker) Cain