Excited about starting your business? You may have “entrepreneurial fever” according to Michael Gerber.
In his bestselling book, “The E-Myth” he likens the enthusiasm new business owners start out with to a fever that may keep one from seeing things clearly.
In case that sounds like your current state, the following checklist for starting a business may help you keep your head about you and not get swept away by your emotions.
____ Is there a market for your product? Of course, you and your mom think there is, but how about shoppers? Use the tools at Erank or Marmalead to learn exactly which products shoppers are looking for.
___ Is there competition? That’s not necessarily bad. In fact, if there are more sellers, it means they are making money. And you can use the tools above to view their product listings and prices.
___ Estimate your profit margin. How much will it cost you in materials, labor, and overhead to craft your product? What’s the average selling price for items like yours? Between the two, is there a profit margin large enough to make it worth your time to go into business? Remember, you’ll have selling fees wherever you market your products.
___ Will your spouse, partner, or family support you or discourage you? Show them this checklist as evidence you are really thinking this out.
___ Where will the money come from to get started? Most makers get started with less than $1,000, but every product has its own costs. What’s yours? Can you afford to make a few items, put them up on Etsy and test the waters? Or if you want faster feedback, get a booth in a couple of local craft shows and discover first hand what shoppers think. By the way, listening to what your customers say is the fastest way to grow your sales.
___ You need a business name. It makes a lot of things simpler, if you use your name as your business name. You can add what you do on the end, like “Jeanne Toomey Jewelry.”
___ Get a domain name with your business name. Example: JeanneToomeyJewelry.com. Set up an Etsy store, Facebook page, Instagram account and any other social platforms using your business name. It’s part of branding.
___ Most likely the legal form of your business will be a “sole proprietor”. You probably don’t need an LLC or INC form of business until you have sales over $25,000 a year. Avoid “partnerships” as a legal form of business. If you must work with others, use the LLC or INC form.
___ Get a separate checking account just for your business. For business checking, most banks require you to present your local business license. Read more about a business license and whether you need one here.
___ Set up an Etsy shop, Facebook shop, Instagram shop, or your own website. Etsy is the easiest, so start there. There are plenty of free Etsy tutorials on YouTube. When you are ready to grow and sell on multiple platforms, see: Sell Your Crafts Online: The Handmakers Guide to Selling from Etsy, Amazon, Facebook, Instagram, Pinterest, Shopify, Influencers and More by James Dillehay.
___ If you plan to sell at craft shows, start exploring events at: https://craftmarketer.com/find-craft-shows/ The better-attended shows accept applications months in advance.
___ Set your prices, if you haven’t already.
___ Design packaging / wrapping / tags / care labels / shipping materials, etc. Don’t order in large quantities until sales justify.
___ Design and print your business cards. VistaPrint is fast and you can order in small quantities.
___ Set up an accounting system to track sales and expenses. Intuit Quickbooks is one of many accounting apps that integrate with your Etsy shop, credit cards, and bank accounts. The app pulls in all your transaction data making bookkeeping easier.
___ Identify multiple (preferably wholesale) sources for materials needed to make your products. Be prepared with substitutes when your favorite material is suddenly discontinued. Happens to me way too often.
___ Create your initial inventory in just enough numbers to make a presence. Don’t invest in inventory until sales justify it. Be patient, it may take time to learn if your product sells.
___ Start selling. Track and measure your results. Do more of what works and delete what doesn’t. Double-down on your best-selling items. When you see them taking off, put more marketing attention on the winners and forget the losers.
___ Create a cash flow spreadsheet. It will tell you how much money is coming in and going out. It may sound too simple to bother with, but I guarantee that if you start using one and checking it a couple of times a month, it will help prevent bleeding cash.
I hope you find this checklist helpful. There are many smaller actions involved in starting a business, but this list organizes the big steps you need to get growing.