Starting a business can be daunting. But don’t worry – people with inferior brains than you, fewer resources, less money, and limited time have done it and succeeded. So YOU can do it too.

With any new venture, there always comes the possibility of failure- something us humans are terrified of. Plus, it comes alongside a whole lot of sleepless nights, 15 hour work days, and sciatica flare-ups from all the back breaking work. Better to just stay on the couch, toss on some Netflix and curl up with a bag of Cheetos, right? Right???

Okay, so here’s the real deal. Starting a business is a lot of work. And sure, you might fail. But it can still be a totally worthy endeavor if you’ve always dreamed of being your own boss. The truth is that it doesn’t have to be as difficult as some would have you believe. And it’s better to have tried and failed than to never have tried at all! 

12 Tips for Starting Your Own Business

Now that the motivational speech is over, we’re here to spill the tea on a few tips that can make starting your own business less complicated, less financially risky and significantly less stressful!

1. Start Out By Side Hustling

If quitting your job off the bat to start a business is a little too intimidating, don’t be afraid to start with a side hustle!

Side hustles are great because you can turn extra time outside of your primary job into extra cash, all while setting up a business that you can grow over time. Since you’re still working at your usual job, you’re not quitting and going all in, the side gig route presents a lower risk. Opting to take this path will reduce the financial burden of needing your new business to fund your current lifestyle from the get go. 

When coming up with your new side hustle, try to pick something you can scale. Gig jobs like driving for Uber and Lyft can be a great way to make some extra cash in the short term… But they’re pretty much impossible to grow. Instead, pick something that you can grow over time, like one of these 15 side hustles for couples (or single folks!).

2. Don’t Be Afraid to Start Small

Believe it or not, you don’t need millions of customers to start a viable business. In fact, you probably don’t even need thousands. 

There are plenty of small businesses and microbusinesses with few employees that thrive on even just 50-100 dedicated customers. Especially if you’re taking the freelancing route, you can survive with just a handful of long term clients.

Not every small business has to be the next Amazon. Some business owners like keeping things on the smaller side because they’re perfectly content remaining a small business. It’s not that they don’t have dreams, it’s just that scaling to the moon isn’t a priority. So take it one step at a time, and don’t feel like you have to expand rapidly in order to be/have a legitimate business. 

3. Come Up With The Perfect Business Idea 

Coming up with the perfect business idea can be tricky. But you can use some of these tips to hone in on it…

Pick a field you’re interested in.

Anyone who’s started a business knows that the phrase “do what you love and you’ll never work a day in your life” is total 🐂💩. You might love what you do, but that colloquialism totally discounts the amount of effort you have to put in to maintain your business. 

Even if you follow your passions, it’ll always come with certain tasks you won’t always feel like doing. At least until you grow enough to outsource some of that work to another person. That being said, it certainly helps to pick a field that you know well and are at least interested in. If you’re a music professional with no experience in chemistry, you probably shouldn’t start a pharmaceutical company. You feel me?

Do some market research.

You don’t need an MBA to start a small business, but it is important to do some market research before launching a new product or service. 

You want to go into a new business understanding the market outlook. Will there be a customer base for your new business? Is your market expected to grow or shrink in the near future?

Many folks skip this step and just “hope” that people will be interested in their product and/or services. But like my middle school soccer coach said, “hope is not a good strategy”! Do your research in order to know your customer base.

Look for opportunities in the market 

If you can solve a problem for people, you’ll never be without a market for your product or service. Keep an eye out for common issues people face that don’t have a simple solution. Then, put on your problem solving hat!

4. Check In With Your Emergency Fund

If you’re ready to quit your job in pursuit of entrepreneurship, it’s a good idea to check in with your savings first.

It’s so secret that being a business owner comes with less financial stability, at least at first. Likely, you’ll have some really great months and a few months that are slower than expected. Having 6-12 months worth of expenses saved up in an emergency fund can help you to weather an unexpected loss of clients, slower months, or surprise expenses.

If you don’t have any savings, start out small by stashing away a basic emergency fund of just $2,467. Economists have found that this is enough money to cover most small emergencies!

5. Pare Down Your Living Expenses

It’s going to be pretty difficult to weather slow periods if you’re spending more than you make each month. 

Cutting your living expenses is powerful. That’s because it has a twofold effect. Not only do you need less money to make ends meet, but if you sustain those lower living expenses long term, you’ll need to stash less away in order to retire. 

Taking steps to keep your living expenses low and avoiding lifestyle inflation can make it easier to get your small business off of the ground. Check out these related posts for just a few ways you can start lowering your monthly expenses. 

6. Barter for What You Need To Get Started

Sometimes, starting a business requires certain resources to get started. That doesn’t mean you need to spend tens of thousands of dollars just to get your idea off the ground though. Don’t be afraid to get a little scrappy when it comes to acquiring what you need.

If you need certain services to get started, like someone to design your website, or a new logo, don’t be afraid to ask people if they would be willing to barter with you. For example, if you’re starting a photography business, you could consider asking a graphic designer to design you a logo in exchange for photos of them for their website. If you’re selling a product, offer to trade some of that product for the goods and services you need. 

And don’t be afraid to ask your friends and family for help. You’d be surprised at how much the people who love you will be willing to pitch in.

Need an office space to handle the day to day operations of your business? Maybe one of your friends has a home office they don’t use that they’ll allow you to rent for super cheap. Let the people around you know what resources you’re looking for and they’ll be on the lookout too. 

If you need supplies for your business, remember that you don’t have to buy them brand new. Look to local “buy nothing” groups on Facebook, Ebay, or Facebook Marketplace for crazy good deals on almost anything you can imagine.

7. Start Planning For Tax Season

Small business taxes can get a little complicated, especially if you don’t stay organized.

Owning a small business means you have to be a little more proactive when it comes to tax season. In addition to keeping good records of every business transaction you make, you should also keep a record of each purchase you make for your business so that you can write off those expenses. Keeping track of these expenses can help you to seriously lower your tax bill in April.

A good way to keep track of all these purchases is to keep a folder with all of your receipts. In addition to that, take a picture of all of these receipts and keep them in a folder on your work computer. That way, when tax season rolls around, you’ll be ready.

8. Don’t forget to save for retirement

You might not have a 401k (or a company match) as a small business owner, but you still have access to other amazing investment vehicles that can help you to save for a comfortable retirement. 

Solo 401(k) plans and a the SEP-IRA are two great investment options for business owners and freelancers. And the best part is that these tax sheltered accounts come with higher contribution limits. You can stash up to $66,000 in these accounts each year. That’s a lot more than the $22,500 limit for a plain vanilla 401k!

So, being self-employed certainly isn’t an excuse to forget to save and invest for the future! In fact, think of it as a license to do even more. Here are some other money tips for freelancers to get ahead!

9. Find a Mentor

Sometimes, it’s hard to figure out exactly what you should prioritize when starting a small business. That’s why it can be helpful to talk to someone who has already done it.

If there is someone in your community who you really admire, or a business you’ve been supporting for years, consider asking them if you can pick their brain. Offer to take them out to lunch or even offer to pay them for an hour of their time. Often, you’ll learn more talking to a seasoned business owner for an hour than you can in ten hours of Googling. 

If you can’t think of anyone you know who has started a business similar to the one you want to start, you can try checking out SCORE. With SCORE, you can get free business advice from retired executives who volunteer their time to help small business owners like you. 

You can also try reaching out to business owners on Linkedin and ask them if they would ever be open to giving you an informational interview. You’d be surprised at how many awesome folks there are willing to pay it forward and give you some advice. 

10. Earn Rewards with a Business Credit Card

When you’re a small business owner, it can be difficult to keep track of which expenses were personal, and which were business related. Having a business credit card can make it much easier to stay organized. 

Better yet, business credit cards come with some seriously good perks and rewards. You can earn points on purchases you were going to make anyway that you can cash in for rewards like travel, cashback, or statement credits. Plus, you can get extra purchase protections and extended warranties. And, when opening a new card, you can snag some serious points with a sign-up bonus. 

Be sure to check out the credit card tool on our site, which can help you to compare different signup bonuses for a bunch of awesome cards. 

11. Set SMART Goals

If you want to get your business off the ground, it’s important to set some goals. Otherwise, it’s easy to just coast without making the progress you really want to make. 

However, setting unrealistic goals for yourself can bring your business to a halt. Nothing is more discouraging than failing to meet your goals each and every month. 

That’s why we want you to set SMART goals! Smart stands for specific, measurable, attainable, relevant, and timely. Don’t be afraid to start with small goals, like getting your first sale within a certain time frame, or increasing your profit by just a few percentage points. Getting a few small wins under your belt can help give you the confidence to tackle your biggest business goals. 

12. Don’t Be Afraid to Fail

Starting a new business is hard, and there’s no playbook that will tell you step by step exactly how to grow your business to the height of your dreams.

Making mistakes and learning from them is part of the journey to financial success. Nothing can spur you to grow quite like some good old fashioned failure. Each setback you face gives you the opportunity to overcome it by learning new skills, getting creative, and looking at things from a different perspective. 

Instead of fearing failure, work to embrace it as a stepping stone towards greater achievement. Some of the greatest successes have been born from the biggest of failures. Remember that If something doesn’t go your way, you can always make adjustments and pivot as you learn more about managing a small business. And if you minimize the financial risk along the way, failure won’t sting quite as hard, it’ll only spur you on towards the next brilliant venture.

The Bottom Line:

Taking the plunge into entrepreneurship can seem daunting, but it is still a worthwhile pursuit. And while it will require hard work and determination, the return on that investment can be sky high. 

Hopefully these tips can help you to embrace the challenges of business ownership, so that you can further yourself along the path to entrepreneurial success. 

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Beer tasting notes:

While talking about starting a business we enjoyed a Let’s Get Some F****** Fraanch Toast by Bhramari Brewing! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe, and give us a quick review in Apple Podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

Best friends out!

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