3 questions to ask before starting a business

March 4, 2013 Off By Jana

This post is part of Women’s Money Week. For a roundup of some additional posts on today’s topic, make sure you go here.

I like earning money. There. I said it.

To me, there is something rewarding about using my skills and my education to bring additional income into my household. I like seeing something I thought of from the recesses of my brain come to fruition and gain some moderate success. I like spending a few hours a day on something for just me, something that’s all mine, something that makes me happy. I like designing my program and business in the way I’ve always thought they should be run. I like interacting with clients and program members. And I know I’m doing the right thing because when I sit down on a Sunday night to get some work done, it doesn’t bother me at all.

Sounds great, doesn’t it? Rest assured it’s not all rainbows and unicorns. It’s exhausting to run your own business. There’s rarely a break and sometimes, I feel guilty when I’m taking time off instead of working on an aspect of the program I run. I work crazy hours and some days, I’m completely unable to separate my life from BHB. There are days I question if I should keep doing it. But then I sit back and think about the alternative and calm the hell down.

So that’s my story. I don’t want that to dissuade you from starting your own business, even if you don’t know what you want to do. Most of us have some skill we can, with the right mindset and motivation, turn into a business, even a business that generates a small income. But before you start your own business, make sure to fully answer these questions:

Do you have the start-up capital?

Starting a business, no matter what kind, costs some money. Having a blog is probably one of the least expensive ways to run a business, but if you want to branch out, you’re going to need to spend some pretty serious cash. For instance, I know a woman who runs a custom sewing business out. While the overhead is low as she runs the business out of her house and most of her orders are taken via Facebook or her website, she’s responsible for shipping, materials, the cost of reserving booths at crafts shows and fairs, promotions,  and

Although the business turns a profit now, she had to lay out a good deal of money in the beginning. If you’re going to start a business along these lines (any craft based business), make sure you have enough money to put products even before the profits start rolling in. In fact, you might wind up losing money in the beginning. Ask yourself if you are okay with this.

Are you willing to work for free or at a substantially reduced rate?

Most businesses gain a following through good, quality work and through word of mouth, rather than as an overnight success. At the beginning of your business endeavor, you are going to have to do a great deal of work for free or at a reduced rate. It’s necessary to this in order to build up a portfolio, testimonials, recommendations/referrals, and a customer base. You must also be willing to negotiate your rates at the beginning or tweak your offered services. You might wind up doing some custom projects or more of the little services rather than the big, expensive ones. Remember, in the beginning, every little bit is step towards making your business successful.

And, while we’re on the subject, remember that it’s okay to use your friends and family as test customers and offer them extra discounts. A neighbor of mine owned a construction business and the first 10 or so projects he did were for friends and family. Remember, those people know other people and if you do great work for them, they’ll be happy to recommend you to others in their networks.

Can you break out of your comfort zone?

This is an essential part of owning your own business and it mostly relates to self-promotion. Many women are too modest or insecure to step up and say “hey, I’m awesome. In fact, I’m more awesome than everyone else so hire me instead of those other losers” (maybe that’s not verbatim). We don’t like to play up our talents or gifts or abilities. It’s uncomfortable and weird and awkward and it sounds like we’re showing off.  We don’t like the perception that self-promotion brings (at least in our heads) but, as it pertains to running a business, it’s essential.

You have to brag about your accomplishments and what you can do. You have to tell people that you exist if you want customers or clients. You have to make yourself stand out above your competitors not only by doing quality work but engaging in self-promotion. This is the part that I’ve struggled with the most. It’s weird to put a tweet or a blog post of Facebook status letting the world know that you’re for hire. But trust me when I say that you never know who’s listening and what doors it can open up for you. So, one day, when you’re feeling brave, just do it once. Just get over the first hurdle. The rest becomes a lot easier.

Yes, having your own business is a great way to earn extra money. I do recommend it. But before you do, make sure that it’s something you’re willing to fully commit to. If it’s not, there are plenty of other ways to earn extra income for your household.

Readers, what do you think is important to consider before starting a business?