Starting a small business (loans, free market, profit, budget)

[nanannie]

Have any women started a small business that can offer start up tips? A family member wants to start a pre school in Wisconsin,Green county area. Any pointers, sites, pros cons for a first time owner with big goals/dreams? Thank you

[Rita Mordio]

The SBA is a great asset. Federal grants and low-interest loans.

[tkdmom]

Try this site, Welcome to SELF (broken link). I heard about this loan on "the big idea". Not really sure about requirements, but thought I would pass it on anyway. Good Luck !

[nanannie]

thank you both very much. I will pass this info along.

[cpg35223]

First thing's first.

When figuring the first two years, do two basic calculations:

1. Take your anticipated revenue and half it.
2. Take your anticipated expenses and bump it at least 50%.

I'm not being flip. The reason most businesses don't make it to the three-year mark is that they always are optimistic on revenue and pessimistic on expenses. So it's almost crippled from the beginning with chronic cash flow problems.

Here are some other very important thoughts.

1. Have a real marketing budget based on what things actually cost. Ad space, direct mail, whatever medium works in your market. I'm amazed at the number of people who figure out expenses down to the last paper clip, but then just throw out some marketing budget such as $500 that has no basis in reality.

2. Marketing comes first, not last. Lots of startups, for reasons I cannot fathom, say "We'll start advertising when we get some revenue." Excuse me? Does that make any sense? The truth is that marketing is the engine, not the caboose. And if you don't have sufficient funds to market your business upfront, then you don't have enough money to run a business. It should be part of the monthly expenses, just like the lights, the rent, and the employee salaries.

[Humanoid]

say "We'll start advertising when we get some revenue." Excuse me? Does that make any sense? The truth is that marketing is the engine, not the caboose. And if you don't have sufficient funds to market your business upfront, then you don't have enough money to run a business. It should be part of the monthly expenses, just like the lights, the rent, and the employee salaries.

This may be true in some cases, but not in general. Although marketing is certainly not the "caboose", it doesn't always make sense to market heavily in the beginning. It is possible to make a bootstrapped business plan where you start with free or near free marketing strategies and then move onto more expensive strategies.

In fact I would say I know more people that have failed with the "market first" strategy than the "market later" strategy, the failure was mainly due to the massive costs of the advertisement and lack of revenue after the marketing campaign (Of course you could argue that these people were under capitalized). The other benefit of the "market later" strategy is that it allows you to refine matters before you start getting more business. If you do a big marketing campaign and screw up, it can hurt you pretty bad.

[Maine Writer]

SCORE was helpful when I was starting out. A business plan got me going in the right direction and keeps me going. I've been updating and changing it for 14 years.

[nanannie]

Valuable information and help. Thank you all so much.

[cpg35223]

Originally Posted by Humanoid

This may be true in some cases, but not in general. Although marketing is certainly not the "caboose", it doesn't always make sense to market heavily in the beginning. It is possible to make a bootstrapped business plan where you start with free or near free marketing strategies and then move onto more expensive strategies.

In fact I would say I know more people that have failed with the "market first" strategy than the "market later" strategy, the failure was mainly due to the massive costs of the advertisement and lack of revenue after the marketing campaign (Of course you could argue that these people were under capitalized). The other benefit of the "market later" strategy is that it allows you to refine matters before you start getting more business. If you do a big marketing campaign and screw up, it can hurt you pretty bad.

Hey, I'm not advocating big television or radio campaigns. In fact, there are a lot of ways you can perform guerrilla marketing that's very effective without shelling out tens of thousands of dollars. But it is simply stupid to not have some marketing platform to begin with, for I've found that if companies do not commit to marketing to begin with, they never catch up.

That being said, these companies seems to have a very naive belief that, at 9 a.m. on the first day of business, people show up with money in hand to buy. In fact, the opposite tends to be true unless you're a trendy new restaurant. Instead, because people are creatures of habit, you have to shift them away from their established buying patterns to give your business a shot. That takes convincing, and the best way to do this in any significant numbers is through marketing. Not expensive marketing, but a steady filtering of your message out into the marketplace so that your target market is exposed to it on a frequent basis.

[Driller1]

I am a female. After 10 years I have a successful business. To this day the cheapest, quickest and most profitable advertising I do is hang business cards. I have received calls before I returned home.