How are you doing business? Online? From your home? At a brick-and-mortar location? Do you know the costs of doing each and what will make the most sense for your business? We talked with the Small Business Development Center about some of the factors that you should be considering.
Location, Location, Location
Before you make the leap to buy a building, you really have to determine what your business actually needs. A lot of times, the first step is not buying a building or even ordering the products.
Most of your first steps are going to be in planning and research. You need to understand who your market is and where they are. This includes their preferred method of shopping. If this means opening a physical location, then there are additional things to consider as well.
One of those things is licensing and building permits. Just because there are buildings in the area or it seems like a great location, it doesn’t always mean that you can get the licensing and building permits that you need to be up and running. There are also financial and time allocation costs to pursuing those licenses and permits.
It could take a year or so to get through the red tape to open and then what? Can you pay the mortgage for that year? What about the marketing and promotions you’ll need to bring in customers to your new location?
You also have to consider how many customers you need per day to break even and compare that to your capacity and the market demand in the area. Maybe you’re opening up a salon and you can only take 5-6 clients a day, but you’d need at least 15 to break even before you start to make a profit. That’s not sustainable.
Perhaps you have a childcare center and you have a lot of space. You need at least 50 kids to break even and have plenty of room, including the restrictions set in place by the CDC due to COVID-19. However, locally there’s not a lot of demand because you’re in a community with fewer children or parents prefer in-home childcare options at higher rates, so you can all fill 20 to 25 spots.
Do you have an online presence?
Selling through social media platforms like Instagram and Facebook is extremely popular. Many hobbyists start selling their products that way before gaining enough demand to expand into a full business.
However, having a website is still more important than you realize and it also takes a lot of work! It’s not free to have a domain, nor can you use a free site to directly sell products, so there are initial costs before you even start creating. If you’re anything like the average entrepreneur (whose business is not website design or something similar), you’re likely outsourcing your website design and management (unless it’s more beneficial to hire someone on your team to do it).
Even brick-and-mortars and smaller shops have discovered a need for a website in the last year with a rising need to cater to higher shifts to online demand.
The flip side of having an online presence is having a social media presence. You don’t need to be on every platform (though creating an account in order to claim the desired handle wouldn’t be remiss), but being present on platforms like Facebook and Instagram where a lot of your customers congregate will likely be helpful. The key is being searchable and building a reliable and positive reputation for your brand.
Don’t Do It All Yourself
As a business owner, you have things that you are better at focusing your time and energy on. These don’t usually include fully understanding your finances right off the bat or even being great at managing your online presence.
It’s important to understand what tasks and jobs you should outsource when hiring someone is the most beneficial, and where you should seek advice.
The Small Business Association is a great source for many of these things and more. If they can’t immediately answer your questions they know the right people and can either get the answer or refer you over.
Doing the research and asking the right questions will save you many headaches later and help you get your feet under you sooner. Don’t just do it all yourself.
About Our Guest:
Interim Director of the Toledo Area Small Business Development Center
Jill Badger is the Interim Director of the Toledo Area Small Business Development Center. The Small Business Association is a national organization, free for any small business to utilize as a resource without having to become a member.
The Toledo Area section has been a part of the Toledo Chamber of Commerce since its founding, contributing to an expansion of resources and knowledge available without small businesses being required to join the Chamber itself.
Jill has been working with the Chamber and Center for almost 7 years and stepped into the Director position back in September, though she has long had an active hand in managing the center. Jill herself specializes in financial advising and utilizes a diverse team and network to bring her clients the best advice possible.
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