Author Topic: Brand new to even thinking about starting a business- how do I start?  (Read 960 times)

maisymouser

  • Bristles
  • ***
  • Posts: 418
  • Age: 30
  • Location: NC
I am very much of a 'work at a place that tells you what needs to be done, and have minimal personal liability' mindset. Sure, I've made a few bucks here and there off of Craigslist and similar sites selling things I've either made or improved, but I've never considered starting a real business so I've never looked into how one even begins to consider what to do.

I have an idea for starting a (very) tiny business making a certain product I already make for myself with minimal start-up costs. It's easy for me to imagine it working out- making product regularly, finding local businesses and clients that would be interested in my product on a semi-weekly basis, creating a logo/website, shipping to non-local customers, yada yada yada. But beyond that, I don't know where to start to evaluate whether or not I should invest more time and money into what is currently a hobby. What are next-steps for someone like me who is oblivious to not just the logistics of maintaining and operating a one-person business, but also doesn't know how to figure out if it's going to be profitable prior to investing in creating the business? Apologies if there is already a thread on this topic.

It's weird for me to post anything in this sub because I really don't consider myself to be entrepreneurial in the least. But I figure, if I figure out a way to make some extra $ doing something I already am doing, why not explore it?

Smokystache

  • Bristles
  • ***
  • Posts: 478
Re: Brand new to even thinking about starting a business- how do I start?
« Reply #1 on: August 27, 2021, 09:55:00 AM »
Here's some thoughts:

1) If you already make something and you think someone else would be willing to pay you for it, you're already more than halfway to being an entrepreneur. All it takes to become an entrepreneur is to take one more step and sell your item for a profit and - boom - you're magically an entrepreneur. Notice that to be an entrepreneur you do NOT have to have/be a website, logo, LLC, S-corp, business cards, stickers on your vehicle, take venture capital, raise money, etc. You just have to provide a service or sell a product for a profit. That's it. Don't let all the videos, TV shows, and other sources complicate this. There are people who sell a product or service with a single page website and make more than $250,000/year.

Of course, you may want those other things (i.e., if you're product could result in someone getting hurt), you may want to be an LLC or get insurance, or whatever. But don't jump into anything you don't need to do

2) Start small. Approach likely buyers and see if they are interested. Stop by or call them. or send them an email with a picture or video. Ask for feedback: "Would this be useful or helpful to you?"

3) Know exactly what your costs are to make it and deliver it and how much you value your time. Think about a price - and then imagine you had 5 orders for them. Would you be excited about making and delivering your item at the price you've set? What if you had 100 orders? Would you be happy making that many for the price you've set? Will your product help someone else (person or business) save money in any way (will it save an employee's time?). Consider that when you're pricing it.

4) Despite what I said in #3, don't worry yet about size or scale too much. Ask around, see if some people are interested. If you get orders, great! Make a few, deliver them, get paid, and ask for feedback after the sale. Does this item help you? Do you want more? How do you feel about the price you paid versus the value you received.

5) Once you've done this, now a lot of questions will be answered. How easy was this to sell? Did you enjoy the process? How much time of yours did it take? Perhaps this is something you can do and earn your electricity bill each month or perhaps cover your rent for the month. Maybe less, maybe more. But don't worry about making it as efficient as possible until you have plenty of customers.

Best of luck getting started. I hope you'll share your ongoing story!

CowboyAndIndian

  • Handlebar Stache
  • *****
  • Posts: 1750
  • Location: NJ, USA
    • KOWines: Deep discount wine/spirits store.
Re: Brand new to even thinking about starting a business- how do I start?
« Reply #2 on: August 27, 2021, 10:02:06 AM »
Everything @Smokystache said.

Make and sell. Worry about LLC, branding, website at a later time.

I can almost guarantee that you will be selling your product for a price that is far less than the buyers expect to pay. People tend to underestimate their labor, design, etc.

If you can give general ideas, e.g. what volume you expect to sell etc, we can give you ideas of whether to incorporate or not. If you think you are going to sell $300/year, then it is NOT worth incorporating. But if you are going to sell $100,000 then you must incorporate.

How do your buyers find you? If you needed to find more buyers, what would you do? Once you have buyers, can you sell them other products similar to what you have?

v8rx7guy

  • Handlebar Stache
  • *****
  • Posts: 2361
  • Age: 36
  • Location: Bellingham, WA
Re: Brand new to even thinking about starting a business- how do I start?
« Reply #3 on: August 27, 2021, 10:45:21 AM »
I started my first LLC 4 years ago and soon after converted one of my previous side gigs into a legit LLC, so now I have two small businesses that do between 10K and 20K gross each year... maybe $10K or so profits.  It's not a life changer, but I enjoy the challenge of being an entrepreneur and the extra income has been a nice bonus toward FI and maybe will provide an opportunity for exiting the workforce earlier than expected.

In my opinion, LLC's are cheap and that firewall between business and personal finances is convenient form of insurance... I would go with an LLC if there is any conceivable way you could be liable for something down the road.  I agree with a previous poster that you should start small: don't go all out with business cards, t-shirts a custom website, venture capital, etc.  For most people, a simple Shopify store & free template is going to be more than sufficient for what they're selling.

Some things that I learned that I did not know going into starting my own small business:

1.  It's a lot harder to acquire customers than I thought.  It took me almost 2 years to appear on the first page of a Google search for my main keywords/phrases, and I'm still nowhere near the top of those search results.  SEO is a hugely important aspect of online commerce that many people probably don't even know what the acronym is heading into starting a new business.  Google ads, Facebook ads and other forms of advertising can get expensive fast... there's a reason a common question to entrepreneurs on Shark Tank is "what is your cost of customer acquisition"... it's all too easy to believe you're making $10 profit per sale but only before spending $5+ to get that customer!

2.  The accounting is a lot of unexpected work.  Maybe it's just the nature of my one of my businesses, but it takes a lot of time doing the accounting myself.  The other one, not so bad.  Just remember once you go "legit" you also need to be legit with your accounting and paying taxes, that's something you cannot go back on.  You're probably already paying tax on your craft hobby sales though, right? **wink wink**

3.  Think about the future of your business and if it fits into your lifestyle.  I love my businesses, but it gets a little stressful when I'm on vacation and I get the Shopify "cha-ching" notification on my phone.  How are you going to fulfill orders when you're gone?  Will you put your store on vacation mode and miss the chance at a potential life-long customer?  Will your business be heavy during the days leading up to Christmas (like one of my business does 90% of it's sales) that you'd rather be spending time with friends and family?

Just a few more things to think about.  Would love to hear more about the nature of your business so that I can give more specific advise!
« Last Edit: August 27, 2021, 10:47:21 AM by v8rx7guy »

Fish Sweet

  • Bristles
  • ***
  • Posts: 436
Re: Brand new to even thinking about starting a business- how do I start?
« Reply #4 on: August 28, 2021, 08:16:10 PM »
I am a hobby crafter who took my hobby (soapmaking) into a full time business, and I have some thoughts for you!  Caveats: I don't have all of my legal/business stuff buttoned up perfectly and I do not make all that much money, lol.  But my business is chugging and customers are coming back, so I like to think that I am doing something right.

  • If you want to turn a profit, you must figure out exactly who your target customer is, how you're going to appeal to them, and how you're going to reach them.  The person who is "your target customer" cannot be a big ol' general swathe of the population.  This is often a problem with a lot of new skincare/cosmetics makers, who have a very large nebulous target audience of 'women who like natural products, I guess?' or jewelry makers, who are like 'people who like to wear dangly earrings, I guess?"
  • Packaging, shipping, and transit - I don't know exactly what you're making/selling, but carefully consider what you will need to move your products safely and without risk of melting, leaking, cracking, going rancid, chipping, etc.  This is especially a problem for ceramics and candle makers.
  • Fiddly hands-on work, customer communication, and admin stuff take a lllllloooooooooonnnnnnnggg time.  At this point, I spend at least as much time packing orders, communicating with customers, and carefully wrapping soaps as I do actually making soaps.
  • Track all of your expenses, every single one, do it down to the penny.  Save all your receipts.  Make sure you are accounting for all of your costs when you price your products (not to mention your labor.)

That's just off the top of my head, I'll try to add more as I think of things. :)

maisymouser

  • Bristles
  • ***
  • Posts: 418
  • Age: 30
  • Location: NC
Re: Brand new to even thinking about starting a business- how do I start?
« Reply #5 on: September 05, 2021, 02:20:53 PM »
Thanks all! I really appreciate the advice, especially the "if it's really really small, don't go all out" and "you don't have to have a million customers to consider yourself an entrepreneur" thoughts. I can give a few more details.

I have two 'products' that I am thinking of selling locally- one is a specialty pet food/treat, and one is a soil additive/fertilizer/booster. This may sound bad but I haven't actually tried selling either yet; I know there is a market out there for both items but I don't see any competition in my area. I was thinking of trying to sell some on Craigslist, Nextdoor, etc (what I've done in the past) but I think I'd have a lot better luck moving product by working with stores directly.

I was thinking of reaching out to local livestock feed stores, nurseries, and garden stores to start, and finding out if they'd be interested in putting my product on their shelves. None of the ones I've looked at even offer what I am making, so maybe those owners would be up for a demo or trial of selling this stuff. I'm more inclined to work locally than set up a website and deal with shipping and logistics at this point.

On the other hand, I'm feeling a bit intimidated by cold calling stores and asking if they're interested in putting my item on a shelf. And if any *are* interested, I'm not sure what their fair cut ought to be as a middle man. Any thoughts/advice/tips on this front?