40 Important Tips for Starting Your Own Business - Part 2
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| Photo by Kristin Wilson on Unsplash |
These tips are also based on my own experiences as a self-employed person in recent years. I would certainly do some things differently today if I started again.
However, many decisions have also proven to be correct and the tips have emerged from these experiences.
Have fun reading and if you have any additions or your tips, just bring them on.
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| 40 Important Tips for Starting Your Own Business - Part 2 |
20 More Tips for Starting Your Own Business
The following tips are again listed alphabetically.
Customer Acquisition
The topic of customer acquisition plays an important role for many start-ups, but after a certain time, it fades into the background. You should regularly take the time to acquire new customers.
I know one or the other company that didn't do just that. And after the good times were over, people panicked and tried to recruit new customers. Sometimes it was just too late. Acquiring new customers is a constant issue.
Customer Service
Customer service is a double-edged sword. On the one hand, it is very important to treat existing customers well and to help them quickly and easily if problems arise. Preventive customer service is also recommended. So just do something good for the customer before they come up with a problem.
However, some of the customers also tend to not only take the finger that is offered to them, but also the whole hand. Here you should be careful how the individual customers react. If a customer tends to shamelessly take advantage of the service, you should pull the ripcord early enough. Customer service is important, but care should be taken.
Number of Customers
There are different opinions on the subject of " Working for a few large customers or rather many small customers ". You should think twice about that beforehand.
I made a conscious decision to have a lot of small customers. For two reasons: On the one hand, I tend to live in rural areas and wanted to work close to where I live and not be on the road so much. That was very important to me with 2 little daughters. On the other hand, there is simply less risk of having many small customers. If someone breaks away, that's not that bad.
However, a few large customers also have advantages, such as usually better payment and less administrative effort. Everyone should consider what is particularly important to them and plan their strategy based on this.
Motivation
The subject of motivation is a very important issue for self-employed people who work from home. But even in your own office you are not always motivated automatically.
For example, it is important to me that I always have a goal in mind. This can be a coming vacation, a purchase I'm looking forward to, or a specific goal that I want to achieve with a website (e.g. visitor numbers). Many small and not-so-distant goals/milestones motivate me much more than an ultimate goal in the more distant future.
Certain routine processes can also motivate and, for example, simplify the start of the day.
Earning money is a very good motivation for many, but it won't last forever on its own. Having fun at work is still one of the best motivational boosters.
Word of Mouth
For me, word of mouth is now the best and most effective method for acquiring new customers. I don't advertise anymore and apart from my website I don't have to do anything for new customers. Except for just force word of mouth.
Because many customers will not recommend you on their own. The book “Finally Recommendations” gives a lot of tips on what can and should be done to turn your existing customers into an effective and important “marketing weapon”. I've already discussed the book here on the blog.
The article “ Optimal use of customer voices ” also shows how customer voices can be used to acquire new customers.
Learn to Say No
Especially at the beginning of self-employment, you are happy about every job. However, one shouldn't always say yes across the board. Especially not if you have a strange feeling in your stomach area.
Even if you need assignments at the beginning, not every assignment is really helpful. As already explained in the first article, you should concentrate on your core competencies and, above all, implement effective orders with a very good cost/income ratio.
Of course, some jobs are not as effective, but because they give you an important reference or, for example, can make important contacts, they are still worthwhile. But these are more like exceptions that confirm the rule. As a self-employed person, you just have to learn to say no.
Network
Contacts are very important for successful self-employment. That's why you should take the opportunity and get to know other people from the industry. Not with the ostensible goal of getting orders, because this “begging for orders” is usually not well received.
Instead, you benefit from the exchange of knowledge and so after a certain time, you have a good selection of partners who you can fall back on for certain projects.
And if there is a good relationship of trust, one or the other job will certainly come out of it.
However, I'm not a fan of the “I'm with you everywhere and at every opportunity” self-employed. You usually notice immediately that they are only trying to sell you something. I go where I find people nice and where I feel good.
Presentation
Your appearance is very important for the self-employed. I don't mean your big car, but the self-assured demeanor and the trust that it creates.
In addition, one should be aware that first of all people see the outside. You can still be such a great craftsman, if you stand in front of the door with greasy hair and broken teeth, the first impression is bad. And potential customers derive the services from this.
Instead, you should come across as personable and appropriate. Not even “over the top”.
In this article, I have a good example of the different presentations makes.
Legal Form
The subject of legal forms is a topic in itself. So just a few words and a few interesting links.
For most readers, there will be a choice between a normal individual entrepreneur and a micro-entrepreneur. The latter has a few simplifications, such as the lack of sales tax. However, there are also earning limits and therefore you should consider whether you want to earn little in the long term.
Alternatively, for example, the Mini-GmbH would also be possible, but this also has catches and the Ltd. is gladly accepted by many.
Supposedly favorable legal forms often have a disadvantage in terms of the trust.
I've opted for normal self-employment as a sole trader and have done very well with it so far.
Credentials
Back then I made the mistake of starting without references. That is why the start of self-employment was relatively tough.
Before you start your own business, you should provide references, as many potential customers would like to see something so as not to buy a pig in a poke.
So in addition to your previous job or studies, you should implement smaller assignments to have a portfolio available when you start your own business. That sounds like additional work after work and often also unpaid. But it's very important.
Reinvest
Of course, especially at the beginning of self-employment, it is often the case that there is just enough money to live on. However, you should get used to investing a certain part of the profit again as quickly as possible.
In the new technology, in additional pillars, in advertising, in customer acquisition, etc. It is very important that you not only extract money but also expand your own “company” and support growth.
Reserves
You should also put part of the profit into reserves.
In contrast to an employment relationship or a fixed wage, the income of a self-employed person fluctuates more or less strongly.
Bad times in the order book, long payment times, poor payment behavior, illness, and many other things can lead to a decline in income and you need a cushion.
You should also save money for larger purchases (technology, company car, etc.) and not always rely on loans.
Taxes
The subject of taxes is underestimated by many self-employed.
One should be aware that from the point where one pursues a regular profit-making intention, the tax office becomes active. Of course, there are limits under which, for example, no income tax is due. But sales tax, for example, is always due (except for the small business regulation).
I, therefore, put a fixed amount in an extra account to have the regular payments of sales tax and annual income tax available.
Some self-employed people have already fallen on the face of it. It's best to talk to your tax advisor about it. They can already estimate quite precisely what taxes are coming soon.
Hourly Wages/Prices
Setting your hourly wage is a science in itself. Of course, I did that when I started my business, but realized relatively quickly that it didn't work that way.
On the one hand, because you can usually actually bill customers for significantly less working time. Often people are overly optimistic. Often 30-50% of one's own working time is not paid.
On the other hand, many start-ups judge their costs to be too low. And not to speak of reserves and investments.
There is a good hourly rate calculator here.
A long time ago I gave up calculating according to hourly rates. I charge fixed prices, some of which are based on the amount of work plus profit but are also based on the customer himself.
I copied this method of pricing from the American / Australian market, where the prices are often based more on the financial benefits the customer derives from the project and less on their costs. This may be unusual for one or the other, but pricing should be based more on what a customer is willing to pay. Especially with services, but also with products.
An article will follow soon.
Technology
I've already written something on the subject of technology and how important current technology is in my eyes. Therefore only briefly. I now have the third work computer, which means that on average I buy a new computer every 16 months.
The waiting times and problems that result from hardware that is too old simply add up too much. And good office computers are no longer so expensive these days.
Good software (where there are also a lot of free solutions ) is also very important and saves a lot of time.
Investing in current technology is also often worthwhile in the trades. One should never underestimate how much money it is worth saving time.
Corporate Governance
As a self-employed person you no longer just do your professional job, you have to run a (small) company. You should be aware of this and take a step back now and then and look at the big picture.
Many self-employed people have already failed because they did not have the business part of their self-employment under control. Technically, however, they were great.
As a self-employed person, you are not only technically responsible but also marketing boss, buyer, administration, controller, possibly HR manager, etc.
Website
A website is a must for almost all self-employed people these days. Not only the younger generation uses the web intensively to research providers, services, and products.
Therefore, a company website and possibly a company blog should be important components of your marketing strategy.
My company website is regionally oriented and regularly brings me new orders.
In the next few days, I will summarize all of my articles about company websites on a separate page.
Further Education
You never stop learning. I was taught that as a child and it's true.
As a self-employed person, you should always try to be up to date. That doesn't mean you have to go along with every trend, but you should know what it's about.
Further training is not only important in the technical area, but development is also progressing in most other industries and therefore regular further training should be included in everyday work.
Advertising
“If you don't advertise, you die”. This principle still applies, even if the conditions have certainly changed. Placing an advertisement in the newspaper is no longer effective. I had to learn that the hard way when I started my own business.
Instead, the aim is to reach your target group as effectively as possible (high results at low costs). Guerrilla marketing is a keyword here. Online advertising is another matter.
Therefore, when planning your independence, you should think carefully about which advertising measures you want to use. And then the principles of “testing” and “optimizing” also apply here.
As I wrote before, I switched to online marketing and referral marketing. Other self-employed, in turn, use other marketing channels and are successful with them.
Here you will find an evaluation of my marketing mix about a year after I started my own business.
Aims
Goals are very important to me. They indicate a direction and help to choose the right means and measures.
Goals are also very important for your motivation and without goals, you will never be able to measure whether you have been successful or not.
There is another good saying, "If you don't know the destination, no path is the right one."
Conclusion
So these were my 40 tips and experiences. I hope you find it useful and you can take one or the other with you.
I will of course continue to gain a lot of experience and would be happy to receive your tips.
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