So, Thursday is “tax day!” April 15th! I got Ryan and my taxes off but found it very interesting to flip through them – my uncle is a CPA and did our taxes for us (Thanks Uncle James!) and recommended I do this. Frankly this all confuses me greatly but I’m learning!
The good news is, contrary to every other year Cooking with Ellen has been in existence, this year I had a profit! My business was begun in 2006 when I did a weekly healthy cooking segment on WCBI and I didn’t have anything to sell until 2008 when the cookbook came out, so it’s really been 4 years of building my business before I’ve seen profit roll around. I say this, not trying to brag, but to encourage you small business entrepreneurs out there!
These past few months I’ve begun to field alot of questions regarding small businesses, how to make a profit, and my recommendations for growing, so I thought I’d take a few minutes to share a few tips on building a business. These tips come from my personal experience/successes/failures and also from small business seminars, websites, and books I’ve benefited from. These are general tips and should be thought of in such a way – this won’t all work for every business but hopefully it’ll be helpful to you.
Tips for a Small Business Entrepreneur
– Avoid Debt as Much as Possible – some businesses require debt to get started but I am so thankful that the only person my business has ever “owed” was myself. Debt is scary so if you can, avoid it! For me, my first big expense was the first 500 cookbooks I bought – I waited until I had personally saved the money (scraping pennies from my new job!) to be able to purchase that big lot of books. I invested in myself. Also, I waited (see next tip) to continue expanding my product line until my profit allotted me money to do so. This helps you avoid getting in over your head.
– Grow Your Business by Your Business – After saving up the money to purchase a big lot of books, I began selling them as soon as possible. I motivated myself to get the books online as well as in stores and offered to do book signings and demos with them. As I made money from the books I put every penny back into the business to purchase items to accompany the books in gift sets, offering these both online and at crafts fairs. I also used the money to purchase the Rada knives I have on hand to sell. Never using the money personally helped me to “invest” what I made. We should all have some savings anyway, right? (some of ours is just in the form of dishes and books!) – so, if at all possible, I’d highly recommend starting your business on the side (this doesn’t work for all businesses, mind you!) and not as a source of income – when your business income matches your personal income, it’s time to think about a job move! If it’s always a side business, wait a few years before you start drawing from it and expand your business instead.
– Be Prepared for Unexpected Expenses – this goes right along with saving what you earn. You WILL have things come up that you just have to have to keep your business running so account for those things – make sure about 1/4 of your income stays in savings just for taxes (and ask about the need to file quarterly vs yearly vs monthly and all that stuff), keep money on hand to purchase items if things break (Cooking demos would come to a halt if I couldn’t purchase ingredients or if I couldn’t afford to buy a new bowl to mix in when my other one breaks!). Save to be ready for the worst! and save to have enough to purchase that “Oh my goodness I can’t pass this up” item to grow your business when it comes along!
– Whatever your business “skill” is, offer classes in that to boost your business – for me, it’s cooking demos where I offer books while teaching healthy cooking skills. Other businesses where this works well include: cake decorating, photography, floral design, food-based businesses, or any place where a skill is needed.
– Learn! – Whatever your skill is, dive into learning your audience and what they want. Just a simple Google these days will help you, whether it’s presentation skills, ideas for artsy projects, or pricing, learn what people are used to seeing, what’s the “new” thing, and how to grow into that.
– Step Out There! – Think of yourself as the professional and cultivate others’ thinking in the same way. It’s really frightening the first few times you stick yourself out there on a limb as a business person but just do it! There are people trying to find someone with your skills and abilities and would hire you if they knew you were there. So, go ahead and stick your neck out there (it won’t get chopped off!) and publicize and grow your business! Then do everything in your power to deliver a wonderful product to the people who hire you.
– Find a Sponsor – I have Shopping Bargains (thanks Mike!) and we both benefit from the sponsorship. If you have a business with monthly expenses, see if there is someone who will sponsor you in that and publicize their name with your business.
– What are you Worth? – Do some research, simply ask friends – what would you pay for ______? Charging too much or not enough can make you look like either you are unreachable or that your product could be cheap. Make calls to area businesses like yours to see what people are charging and shoot in that ballpark.
– Keep it Legal – Whatever you do, don’t go doing anything that’ll get you audited and in a bunch of trouble. Go ahead and hire someone to do those taxes for you, get a tax ID number, sales tax ID number (if needed), log for mileage/expenses, and anything else you need to keep your business legit – there are many free resources (I know that Mississippi State and Mississippi University for Women both have departments offering free help to those with small businesses) to help you get going and keep you up and up!
– Have Fun! – Keep your business as something you enjoy – don’t over-commit or under-charge. Do what you love and ask friends and family for advise and help (good tip: pay them with your product – for those who edited my cookbook, I gave them one! :).