Thursday, January 28, 2010

The "dos & don'ts" of starting your own business!

I frequently get requests from other women who want to start a similar business to The Extraordinary Baby Shoppe for start-up advice. I don't generally answer these e-mails, partially because I don't have the time, and partially because I wouldn't be sure what advice to give (eight years later, and I'm still learning!).

These requests have run the gamut from vague ("Do you have any tips to share?") to specific ("Here's a piece of paper and a pen, please be a dear and write down your suppliers, their contact information, and where you get your fixtures."). I'll be honest and admit that if you have specific requests like the latter person, I would suggest your preface our conversation with "Hi, I love your store, can I buy a franchise?", because that's about the only way you'll ever get the answers to your questions. A lot of thought and effort (and blood, sweat, and tears!) has been poured into this business (it's definitely my fifth baby!), and expecting me to give up the goods just because you asked is just plain absurd. Sorry, not gonna do it!

So, what pearls of wisdom do I have to offer other people who might want to consider the self-employment route?

  • Do your research first. Just because I can make a go of it where I am, doesn't mean you can make a go of it where you are. You need to figure out who your target audience is (income, age, education, family size, etc.), and whether or not it is large enough to sustain your business idea. Opening a natural parenting business in a town with a predominately aging population, not a good idea!
  • Don't expect to make money immediately. If you're in a cash crunch, and you're thinking of starting a business to add to your income, guess again! On average, it takes a new business approximately two years to turn a profit. After a year in business I was paying myself a salary of -- wait for it -- $50.00 a week. That amount has increased over time, but not without a lot of hard work.
  • Do figure out what you're paying for a product before you decide how much you're going to sell it for. New WAHMs (work-at-home-moms to you!) are notorious for undercharging when they first open their business. Aside from the actual cost of stock, you will have to account for all the little charges that will put a dent in your bottom line -- credit card fees, brokerage fees, duty charges, the list goes on and on! If you start out charging low prices, it will be hard to increase them when you need to (and you will need to eventually, unless you like working for free!).
  • Don't undercut. Some WAHMs undercharge on purpose, under the misguided notion that they will earn money based on sales volume. This plan will never work, you will work like a dog for little (or no) return. Don't undervalue yourself!
  • Do know what your obligations to the government are. I often joke that I'm not really self-employed, I work for the government. There's a lot you need to know with respect to GST, PST, employee deductions, and importing goods into Canada. I recently learned a hard lesson that cost me thousands of dollars -- I wish there was a 'Canadian Government for Dummies' handbook, but there's not. However, the government does offer free workshops for business owners, it would be a good idea to attend them if you can.
  • Don't copy, it's not nice. It's never OK to take someone else's hard work and claim ownership for it. Copying text from someone else's website and pasting it into your own website (or your newsletter, or your blog) is not cool, even if it's just a bit of text, and even if you change the wording a little. If you would like to use someone else's information, link to it, or ask their permission to use it yourself. It's called common decency. Same goes for images (even a Facebook icon!).
  • Do it because you like it. If you enjoy something, you're more likely to be successful at it. Passion is great fuel!
  • Don't do it because you want to spend more time with your children. This is a nice idea, and one of the reasons I started my own business, but in actuality, it doesn't work that way, especially if your business is successful. While my job (yes, it's a job) affords me the luxury of being at home when the kids leave for school, and when they come home from school, the reality of it is that while I'm at home, I do a lot of work. I order from suppliers, I answer customer e-mails, and I talk to (both) stores freqently throughout the day. The time I spend with the kids isn't always what I would call 'quality' time, but it's a tradeoff.
  • Do take time off. Have a designated 'day off', you will need it! Have you noticed our stores are both closed on Mondays -- I enjoy having one day a week when I know I won't be needed by the business. As important as it is to put the time and effort into a new business, it's equally important to put time and effort into yourself, and your family. Sounds easy, but take my word for it, it's harder than you think!
  • Don't treat your business like a hobby. It makes me cringe everytime I come across a person who makes this claim. A hobby is fun. You do it because you enjoy it. It gives you personal satisfaction. The same can be said for a business, however, unlike a hobby, a business is not something you do at your own leisure. You need to take it seriously, and you need to put the effort into it.
  • Do consult an accountant first. Yes, it costs money, but it's money well-spent. I didn't do it, but I wish I did, because getting caught up after the fact is hard! An ounce of prevention is worth a pound of cure...

I know you're probably expecting to see a reference to a business plan here, but I never had one, and I still don't. I started this business based on a gut feeling, at the time, 'natural parenting' stores weren't as abundant as they are now, they were virtually non-existent. The Extraordinary Baby Shoppe was started in a spare bedroom in our home, it grew slowly, first into a stall at the Stittsville flea market (raise your hand if you visited me there!), then into a retail space not much bigger than the spare bedroom we started out in. We now operate out of two lovely storefronts in Ottawa and Waterloo, ON, we have a great staff of moms who are equally as passionate about cloth diapers, breastfeeding, and babywearing as I am.

Starting a business isn't something that should be entered into lightly, and finding the balance between home and work can be tricky, but it is very fulfilling to earn a living doing something you enjoy.

7 comments:

  1. Thanks for this post! It is hard starting up a business especially as a mom. I am a WAHM and recently started a business from my home "studio" (think back to that spare bedroom of yours but smaller) and also teach childbirth education classes in my home. I am learning as I go and relish the opportunity to hear any advise from other independant start ups!

    Bonnie
    www.bumpsandbuttercups.com

    ReplyDelete
  2. You missed one that always kills me with WAHM's - INSURANCE. Get some! A basic home owners policy specifically states that it does not cover home based businesses. You can usually get a home based business policy addition, but depending on what you're doing, you're going to need a Commercial General Liability policy!

    If you don't talk to your insurance company, and something happens they could deny the whole claim!

    Rae
    www.chartreuseindustries.ca // www.slingtastic.ca

    ReplyDelete
  3. Financing source or the capital is one of the several factors in starting a business. Unless your business is particularly small, you may need a significant amount of money for your start-up costs. You can use your own money, or if your product or service is particularly unique, consider getting an investor.

    Bealle Jenner

    ReplyDelete
  4. “Do it because you like it.” – That’s the best advice. In any business or career, you can’t expect someone to last doing something he doesn’t even like. A successful business needs more than half of your attention. You need to devote your mind and time for it to grow. Cameron @
    ImmediateCapital.com

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  5. This comment has been removed by the author.

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