What should I do to start my own business?
I'm currently working for a company, but I want to start having my own small business, probably a restaurant, cafe, or even a food truck. What should I do to prepare before starting my own business?
a. make a business plan and a financial plan. That will clearly show you how much funding you are going to need and when. It will show you what your monthly expenses are and then you can play with sales estimates to understand how much revenues are needed to a. pay the expenses, and b. pay your salary.
b. a business coach is also a very good idea. It will prevent you from falling into the abyss making the mistakes beginning entrepreneurs always make.
See my profile to see where you can get the software and the business coaching you need.
Starting a business is easy - it's a matter of follow-thru. Here's what no one else tells you to do.
Be clear about who your first fans will be.
They may not be your ultimate tribe - your 1000 fans as Kevin Kelly puts it. But unless you start somewhere - the worst thing you can do is use the "build it and they will come" approach.
Years ago, we started a non-profit, and it turned out to be a movement - http://bit.ly/tangotribe
You never know what will "take," and I'm not advocating the plan & design to death strategy either.
Get that "minimum viable product" out there - test, adapt, and repeat.
If you're thinking of a restaurant, try a food truck first. (I've seen this done successfully over and over again..)
If you're looking at a food truck, set up a booth at your local farmers fair.
If you're planning a booth, make / bake your recipe and let your circles try your product.
We tend to think of success or failure - in reality things either go as planned or you've learned a lesson.
Your passion seems to be in the food/restaurant related services- you know where does your calling rest and that is a good starting point. Important changes from being salaried employee to an entrepreneur are:
1. Monthly pay cheques stop coming on the designated date, while
2. Fixed expense payouts continue , and this results into
3. uncertainty, self doubts and question marks.
You may like to do a thorough financial assessment and arrive at your ability to sustain without fixed income coming in. You got to have reserves to support your committed expenses and maintain decent lifestyle for a minimum 12 months to max. 36 months. (Decent = meeting sustenance needs+self & family's education and health cost + moderate entertainment without extravagant and unnecessary spends)
12 months is a minimum time for business to start revenues and by third year, you would possibly break-even. These are of course thumb rules and there deviations and exceptions to both sides of the curve.
Once you create reserves, invest in a manner that you get a monthly or quarterly cash flow through interest through term or fixed deposit. Financial worries can be the biggest source of stress and you certainly don't want getting distracted by it.
Second important aspect is getting the real handle of the life 'out there'. You may work part time even on a pro-bono basis to learn how this trade works. No amount of reading can substitute the learning that street provides.
Involve your dependent family and dear ones. Sound them of about your thought process. They have a right to know and you may discover wonderful source of support and ingenuity in them.
And once you start getting your customer orders, don't forget to share the good news with your friend and well wisher, yours truly, Rajesh Vaidya :-)
Wishing you the very best and success in life!
Robert gives very good advice and if you do not know how to go about doing what he suggested you can locate organizations in your area who will help you. I would add that you should investigate if your business is need in the area you wish to function. Everyone needs food but they can be picky about what they eat. You are not creating a new mouse trap so you will need to steal customers from existing food services. Setup costs are high even when you use pre-owned equipment so having a good bank roll to start with will help to keep you going long enough to establish the monthly cash full to cover expenses.
I recommend you interview some owners of like business as if you were doing research for your masters degree or management class in college. Learn from the mistakes of others and avoid some of the pain that will come your way.
Ask why the market needs another restaurant, cafe or food truck?
What makes you food so unique over my restaurant, cafe or food truck?
Who will purchase what you prepare?
Do you have a menue?
Do you have a chef?
Will you do the cooking?
How do you know your food is good. RedBull tastes AWFUL, but it sells and people mix it with other stuff to kill the taste - The company is profitable.
Are you the next Redbull?
Market test the audience and ask about what they would like to eat that is not found in a restaurant, cafe or food truck?
Invite some friends over and cook your menue for them. Get the feedback.
Do not invest any resources or start until you are certain you have something people will eat. Test your hypothesis first. Measure your results. Test again.
This is an iterative process. Your due diligence will contribute to becoming partly successful. Partly successful because if you cannot scale the idea, then you are trading employment for a hobby.
Hope this helps, Danny.
If you don't have experience running a food-related business, then find someone that you can trust who has such experience and discuss your thoughts with that person. You're looking at a very time-consuming industry and a very competitive one. Most restaurants close within the first year of operations. So make sure you know what you're getting into.
Danny, I have helped dozens of people to start businesses of their own, as well as, having owned many my self. I can tell you that the most important strategy to put in place first is your mental strategy. You need to think through your plan and all the how's, why's etc to be prepare and make sure you do things the way you want them to be done; not the way stress steers your ship to go! And it's always nice to put some real thought into who you want to be in the public eye; what you want your lifestyle to be ultimately and on. It take work but the good news is their are proven ways to do it right. You just have to be disciplined and passionate! Best of luck, I have been in the restaurant business and loved it!
Danny, You should first look at what your motives are for starting your own business. Many times, people simply want to leave a job they are frustrated in without having much passion for the career they want to begin. Are you passionate about working in the restaurant/food vendor business? Think about how you will make your transition from your day job to your dream job. Can you work at starting up your business while still being employed or if you must leave your current job, will you have the income saved to pay expenses until your entrpreneurial venture takes off.
How much knowledge do you have in the food service industry? Will you need training in how to work with vendors, set prices, marketing, food preparation etc/ Will you be doing this business alone or are you planning on hiring a team?
You will need to look at the types of regulations for this type of business in your area. Frequently, businesses of this nature (involving anything the Food and Drug Administration oversees) have specific regulations. This may be in addition to state or local regulations for operating this type of business.
If you seriously see this as a business you will enjoy operating, you may want to talk to some restaurant owners, food truck vendors etc about what they have learned. Many business owners are happy to help newbies if you respect their time and experience.
Well this question is much better than asking "My business is going downhill, what do I do?" after you've been in the business for a year or so.
A lot of business now a days are started by people who love doing what they do in their current job and think why am I working for someone else and making him money, it would be great if I was my own boss. Well that is great but remember running a business means you've to step out of your comfort zone and plan/handle a lot of other responsibilities that you did not pay much attention till now.
What Colin suggested, I agree with that. That will give you a lot of insights and know-how of how things should be handled.
I also strongly recommend reading "he E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It" by Michael E. Gerber.
This explains how a someone starting from a technicians role, can upgrade himself to Manager and then be a real entrepreneur. A perfect balance between these roles is essential to running a successful business.
Let me know if I can be of further help. Good luck!