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12/10/2013

(Part I of a two-part series)

Dissatisfied with Your Job? Man Up and Create Your Own

(Continuation of Sean Castrina’s top-10 rules for becoming a part-time entrepreneur.)

Prep your victory dance.

While you’re still in the planning stages, set aside an hour to take a mental trip into the end zone. Envision your goals for your business: what you’ll make or sell, who your customers will be, and — most importantly — how being an entrepreneur will positively impact your life. Then glue images and words that remind you of those things to a piece of cardboard or poster board, and make sure this dream board is visible in your workspace.

“Dream boards may seem small — and you may even think they’re too touchy feely — but they’re very important,” Castrina asserts. “On those inevitable days when you think you must be crazy for starting a business while holding down a day job, looking at photos of the vacation destination you want to visit, the logo of the college your child will attend, or the fishing boat you want to buy will motivate you. It’s also a reminder of why you became an entrepreneur in the first place.”

Don’t under-price yourself.

When you’re just starting out, you may be tempted to offer rock-bottom prices for your goods or services. After all, you don’t want to alienate potential customers by charging too much. And isn’t underselling the competition a reliable strategy? Well maybe, but that’s not the way to make a profit. Especially when you’re just starting out, you can’t be in the business of offering mega-discounts. If you recoup only enough money to pay labor and operating costs, you may be helping to feed your employees’ family but not your own.

“Under-pricing is without a doubt the biggest mistake new business owners make,” points out Castrina. “Often, the urge to undercut the competition is just too great, but doing so can quickly hurt your business. What you need to do first is figure out all your costs and what you want to make, and then use that information to specify the price.

“After determining what you need to charge, in order to make what you set out to make, you may find the business you chose does not work. But there are also many ways to add value to your services that will allow you to charge more, if you have done your homework identifying what your competition fails to offer.”

Make room for a marketing budget.

One of the biggest mistakes new business owners make is not including a marketing budget in their operating costs. In a nutshell, this is the money you invest every week or month to inform your community why they need your product or service and why your company is the one they should choose.

“If you do not reach and retain customers, you won’t be in business — you’ll be bankrupt,” Castrina warns. “First, figure out what makes your business unique: what it offers, why people need your product or service, and why consumers should choose your company over any other. This is called your ‘unique selling proposition.’

“Use all or part of it to create taglines, logos, and other marketing messages that will enable you to advertise through websites, social media, newspapers, fliers, etc. Then do some research to estimate how much your advertising is likely to cost, so that you can budget for them.”

Hire smart.

The idea is to prevent your side business from eating up a lot of time. That’s why the goal is for you to NEVER EVER be the one actually performing the service you provide. And that means hiring smart is a must. If your business will need one or more employees other than yourself — which is especially likely if you’re starting a service business — be aware that how and whom you hire will affect how successful your business will become.

Before you even think about placing your first employment ads, get familiar with federal, state, and local labor laws (these cover areas like hiring discrimination, child labor, independent contractors, immigration law, and more). Don’t worry, you don’t need to navigate these areas on your own. If you become a member of the National Federation of Independent Business (NFIB), you’ll have free access to its labor law hotline. You can also consult with an attorney.

“Once you’re familiar with all applicable hiring laws, it’s time to get the ball rolling,” Castrina confirms. “I recommend making sure that you can get the labor you need before you officially open your doors, by running test ads. If you don’t get five applicants within three days, you might want to rethink which field you’re going into — because you want a business that is effortless to hire for.

“At this stage, if you prefer, you can hire respondents as subcontractors (not official employees). They will only work when you have jobs for them — after thoroughly vetting them, of course. Once your business becomes more popular, you can consider hiring your subcontractors full-time.

“When you do reach the full-time hiring stage, be sure to look for talented, smart, experienced, and competent people with integrity,” Castrina continues. “Don’t automatically hire friends and family members just because it’s convenient! Remember … experience, competence, and commitment are invaluable assets.”

Become king of your own corner of the web.

Many would-be small business owners (especially those who plan to do all of their business locally) figure that traditional print or radio advertising will be enough to spread the word about their companies. That’s archaic thinking, according to Castrina. Since most of your prospective customers — even those born during the heyday of newspaper and radio — are surfing the Internet, having a website is no longer optional. 

“Developing an online presence is as essential as having a business card,” Castrina declares. “At minimum, you need a homepage that functions as a business storefront, conveying your unique selling proposition, pricing, and contact information — though sections for customer testimonials, employee bios, and photos wouldn’t hurt! Check out the competition’s websites to see what works and what doesn’t. If you can’t afford to hire a website designer, check into the growing number of DIY systems that allow you to plug your specific information into cheap built-in templates.”

Don’t let the other guy outperform you.

After your business opens its doors, it will develop a reputation. Whether it’s a good or bad one is largely up to you. To make sure that customers hold your company in high esteem, focus on providing great service to each and every customer from day one. Word of mouth is important for the growth of any business and providing those little extra touches will get people talking about you in a positive way.

“Let’s use a lawn mowing company as an example,” suggests Castrina. “To show that you do the little things that big companies won’t, you decide your employees will pick weeds out of flowerbeds for no extra charge. In this scenario, I would recommend giving employees a postcard printed with two boxes (labeled ‘lawn mowed’ and ‘flowerbeds weeded’) for each visit. At the end of the job, employees check each box and leave the card with the customer. Not only does this make sure your employee does the work — it also shows the customer how important this ‘extra’ weeding service is to you.

“Another aspect of providing great service is putting quality control measures in place,” Castrina continues. “In other words, make sure your customers get what they pay for. Be prepared to listen to the occasional complaint, and then rectify the problem. It’s also a good idea to periodically survey customers to make sure that they’re satisfied with the goods or services you’re providing, and to ask if they have any ideas for how you could improve.”

Use your time wisely.

Good time management is an important skill for any entrepreneur to have, but it’s especially crucial if you’re a part-time entrepreneur. If you aren’t purposeful and efficient, your responsibilities will start to resemble another full-time job … and soon you’ll be slipping up in both roles.

“Whenever possible, I recommend planning each day the night before,” Castrina declares. “Write down all of the things — family, day job, and small business related — that you’d like to do the next day. Then, mark each one with an A, B, or C. A’s are tasks that must be done. B’s should be done, and C’s would be nice to get around to. This system will help ensure that you’re spending your time on high-value activities instead of reactively chasing every shiny ball that rolls by.

“While these rules don’t cover every step of creating your own part-time business, they will help you focus on heading in the right direction,” he concludes. “So stop procrastinating. There’s no time like the present to start becoming your own boss.

“Remember my entrepreneur poker buddies?” he asks. “Because we took informed (not reckless!) risks, we’re now able to sit around and plan trips to events like the Daytona 500 or the Super Bowl. We spend days in these locales enjoying it with our families, while our businesses continue to bring in the sales. Consider this my invitation for you to join us.”

(END)



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