Is great customer service worth the cost? How much should you pay yourself? Do you need a building? Take it or leave it, you’ll find here answers to these questions and more; the universal questions of startup and small business owners.
How much money should I have available when I start a business?
As much as possible. Many entrepreneurs and business gurus will tell you that you should have enough money to sustain your business for a year without profit. If you want to be on the safe side, try 2 or 3 years worth of secured working capital.
That may be out of the question, which is why many business owners just have to pray that revenue overwhelms cost sooner, rather than later.
Should I bootstrap my business?
If you have the means, you’re ultimately better off bootstrapping because this means you won’t be indebted to anyone, and you have complete control over the direction of your business.
Unless you have access to a good deal of preexisting wealth or supplementary income, however, it can be very difficult. Many businesses decide to accept at least a small amount of outside funding to make sure the business stays open while they’re building their customer base.
How much time & energy should I invest in customer service?
You really can’t put enough emphasis on customer service. Yes, there is a cost associated with the resources needed for great customer service, but this is something that can boost sales a lot more than you may think.
People will show you with their wallets how much they appreciate excellent service, aside from the fact that they will spread positive word-of-mouth to others, as a result.
Can I cut corners with products or features?
If you mean compromising on the quality of your product, then of course it’s never a good idea to cut corners in that sense. If you mean offering fewer items or features due to limited available resources, then it can actually greatly benefit you to do this, especially in your early stages. Better to do fewer products well, than many products cheaply and quickly.
Do I need a building?
It all depends on what you’re selling, but any new business owner should definitely consider carefully whether a brick-and-mortar shop or office is really necessary for you. There’s a good chance that you can set up shop at home, at least for now.
How important is location?
Again, you may not need a “location” at all, but if your product or service necessitates a real-world store, then yes, your location could potentially make or break the business.
On a related note, communicating to your customers that you are “based” in a certain area or city can be a great selling point.
How much should I pay myself?
During the first year or two in the life of a business, there’s not much choice for a business owner—he or she will most likely be paying him or herself the bare minimum or just scrape by, to keep the business alive.
As more revenue comes in, though, the general rule is just to carefully pay yourself according to your budget, resisting the temptation to take more.
Will having my own business give me more free time?
This is a misconception that the occupation of running a business will quickly correct for most entrepreneurs. If you have a lot of free time, then chances are, you’re not running your business—not very well, anyway. The free time (hopefully) comes later.
Do I need a partner?
Having a business partner provides a huge relief of stress and usually adds much-needed funding, knowledge, resources, or other assets to your business that you would have been lacking otherwise. You can always go it alone, but a trusted and competent partner brings massive benefit to your venture.