What You Must Know About Starting Up a Small Business
So you are thinking about starting up a small business. Probably somebody pointed out that you have this great idea, or product. Surely that somebody has never had a small business. You must examine your ideas carefully. What do you like about the idea? Independence? Your own hours? Your product, your way? Nobody to tell you what to do? The American Dream? Start small and who knows how far you can go? It has got to be these kinds of reasons, because anybody who knows the truth no longer thinks like this. But you want to seriously look at what being a business owner might be like.
You are about to meet a very expensive group of people. Lawyers, accountants, IT guys, real estate brokers, human resources pros, insurance agents (many), bankers, and the tax men. Yes, more than one tax man. You cant go into business without space to do the business. That means commercial real estate, and you must have a lawyer look at any contract, because you dont want the landlord to lock you out of your building if you forget to pay the rent. IT guys charge by the hour, unless you think you can set up your computer system alone. Theres cable laying and phone integration. If numbers are not your thing, a good accountant is a must. How much to withhold, how much to allocate to taxes. Your lawyer (if a business lawyer and not the newly graduated son of someone you know) might even assume you already know how much the government will be in your face about who you can hire, and how you have to report. If not, you need someone in human relations to point out what you can and cant do to employees.
Like fire them without their, not your, idea of a good reason. Screwing up is not a good reason.
Because starting up a small businesses is very risky, all these people are going to want up front money. And the rates for their services are much higher than for ordinary people. The phone costs more, the bank accounts have way unbelievable fees, the insurance rates, the commercial real estate rates will open your eyes, and theyve all figured out ways to keep you from avoiding them. Even the gas and electric rates are higher for businesses.
You better have money already. It seems like thats the reason you are thinking about starting up a small business, to make money, but you have to have lots of it up front. If you dont have any money and have no elderly relations with nothing to do with all their money, you can always borrow it. Everybody from Uncle Sam on down to the local office supply place is just really anxious to extend credit to you, and smile broadly at you, and give you loans. You should start to hear the theme song from "Jaws" right about here. These folks are not your friends. If you have a bad month and go ask them to skip payments, theyll probably say OK. These guys never have a bad month, because the more you delay, the more you owe them and the less credit theyll give you.
Pretty soon youll get the idea that all you wanted to do was make hair clips, or meat loaf pans, but you are spending so much time with all these other people that you are not getting to do what you want. There are a zillion books out there about starting up a small business. Read them. Do not go into this dark woods alone.
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