Succeed As Your Own Boss

ENDING SMALL BUSINESS FAILURE

  • Home
  • About
  • Book Melinda
  • Consulting
  • SBL Store
  • SmallBizLady University
  • Free Tools
  • Podcast
  • #Smallbizchat
    • Be a #SmallBizChat Guest
  • Blog
  • Contact
    • We’re Hiring!
You are here: Home / SmallBizChat / Starting a Small Business in This Economy

Starting a Small Business in This Economy

March 18, 2010 By Melinda Emerson 5 Comments

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wed. on Twitter from 8-9pm ET. This is excerpted from my recent interview with @Colleendebaise She is the author of The Wall Street Journal Complete Small Business Guidebook is small business editor at The Wall Street Journal.  Prior to that, Colleen was deputy editor at BusinessWeek SmallBiz and has also been editor at SmartMoney magazine’s small business site, where she reported on the financial, personal, and management issues facing entrepreneurs. For more information on her book http://www.colleendebaise.com

SmallBizLady:  Is now a bad time to start your own business?

Colleen Debaise: No. In fact, an economic downturn is often considered the best time to start a business. Rent is cheaper. Top-notch talent is easier to come by. Equipment and machinery can be picked up at low rates. Plus, if you start now, you can get a leg up on the competition. When the economy recovers, you’ll already be growing your business.

Smallbizlady: How long do you think people should plan before they start their business?

Colleen Debaise: There are no shortcuts – you really need to do your research, figure out your market, size up the competition, determine your start-up costs, craft a sales/marketing strategy, and so forth before starting your business. That can take some time (it all depends) but it will only help you in the long run. That said, a lot of people fail to plan before starting up, choosing instead the “sink or swim” approach. I don’t recommend that. The odds, in many ways, are stacked against you. The more you can do to prepare, the better.

Smallbizlady: Do start-up entrepreneurs need a business plan?

Colleen Debaise: Yes, for those same reasons above. Most importantly, a business plan gives you direction; it can be your roadmap to success. It’s a way to get that great idea out of your head and onto paper. Also, if you are looking for money, a banker — and certainly any professional investor — will expect you to have a business plan. If you are looking to rent a space, a landlord might demand to see one. And if you are looking for a business partner, you’ll want to show them your business plan so you can communicate your vision and so you can both be on the same page.

SmallBizLady:  How do small businesses typically fund their ventures?

Colleen Debaise: Most small businesses are self-funded, meaning the entrepreneur has to come up with the cash, usually through personal savings or contributions from friends and families. Once you’ve got a track record, it’s possible to secure SBA-guaranteed loans or traditional bank loans. Entrepreneurs who want to start high-growth companies with the goal of selling or going public can seek angel or venture capital, although that generally means giving up an ownership stake in your company.

SmallBizLady: Do you need to change your lifestyle in order to start a business?

Colleen Debaise: Starting a business is a lot like becoming a parent — get ready to lose some sleep! Especially in the early days, you’ll need to devote a significant chunk of time and energy to getting your business off the ground. As you start to build your brand, develop market share and hire employees, you’ll be able to delegate responsibilities more — but that may take several years. While you’ll need to dedicate a lot of time to your start-up, it’s also critical to learn good work/life balance strategies so you don’t burn out.

SmallBizLady: How much money do you need to start a small business?

Colleen Debaise: The cost varies widely, depending on the size and scope of your business. A solo home-based entrepreneur might only need a shoestring budget, whereas a small manufacturer may need considerably more to lease commercial property, buy equipment and train staff.  But here’s something to keep in mind: entrepreneurs chronically underestimate the amount of start-up capital they’ll need while overestimating initial revenues. Lack of capital is one of the top reasons why businesses struggle or close during the first year. The best thing you can do is figure out all your start-up costs — everything you’ll need to get your doors open — and then develop an operating budget for your first six months or year in business.

SmallBizLady: What are some of the financial challenges a new small business owner faces?

Colleen Debaise: The biggest financial challenge for many newbie entrepreneurs is learning the numbers side of the business. Many people start a business because they want to follow their passion and do something they love. That’s great, but you’ve got to learn the math, too. In The Wall Street Journal Complete Small Business Guidebook, I dedicate a chapter to managing the finances of your business — learning to read a balance sheet, a profit-and-loss statement and a cash-flow statement. As a business owner, you can always get advice from an accountant or a bookkeeper, but you need to understand the numbers yourself so you can make strategic decisions for your company.

Smallbizlady: What are some strategies for marketing a business?

Colleen Debaise: The methods of marketing a business have changed greatly. In years past, people relied almost exclusively on traditional (and expensive) forms of advertising such as newspaper ads, billboards and television commercials. Nowadays, there are far cheaper options, such as social media sites, although it’s harder to stand out because everyone is using these tools. While the methods have changed, people still need to follow the marketing basics. Know your customers. Figure out how your company differentiates itself from its competitors. And tell your story — people want to do business with people they know, like and trust.

Smallbizlady: What are the top reasons why small businesses fail?

Colleen Debaise: The number one reason is undercapitalization. Most small-business owners UNDERestimate how much it will cost to get started — and they also OVERestimate how fast initial revenues will come in.

Smallbizlady: Has social media revolutionized the way start-up business should market themselves?

Colleen Debaise: I wouldn’t say revolutionize – it’s simply provided another tool in the arsenal.  Social media is best in conjunction with a mix of traditional advertising, marketing, promotional methods. But small businesses need to remember that–unlike other forms of marketing — social media is a two-way conversation. In other words, don’t just put up a Facebook page and never update or respond to comments. Social media, although free, can take more time and energy than other forms of marketing.

Smallbizlady: How many jobs should entrepreneurs expect to do when they start out in business?

Colleen Debaise: Ha – all of them! Be prepared for the demands on your skill set that starting a business will require. Think about it: if you currently work for a large corporation, you probably perform one specific function, and there are people or departments that take care of the rest. Especially in the start-up phase, when money is tight and you might not have any employees, you’ll need to be everything: CEO, chief marketer, chief salesperson, maybe even the cleaning person.

Smallbizlady: A lot of start-up entrepreneurs talk about finding their passion to build a business, what do you think?

Colleen Debaise: You must have passion to start a business. Everything else you can learn. But you need to have that enthusiasm, love, and enjoyment for what you do. It’s passion that will keep you going, especially when times are tough and naysayers are plenty. And it’s passion for your product or services that will help you ultimately win clients, customers, investors or partners.

If you found this interview helpful, join us on Wednesdays 8-9pm ET and follow @SmallBizChat on Twitter.

Melinda Emerson @Smallbizlady is a seasoned entrepreneur, professional speaker, and small business coach. Her areas of expertise include small business start-up, business development and social media strategy.  Melinda publishes a blog about running a successful small business www.succeedasyourownboss.com. She also hosts #Smallbizchat, a weekly talk show on Twitter for emerging small business owners to discuss everything they need to know about launching and running a profitable small business.  Her first book Become Your Own Boss in 12 months was released in March 2010 from Adams Media.

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print

Filed Under: SmallBizChat, Social Media, Starting A Small Business Tagged With: Colleen debaise, entrepreneurs, melinda emerson, small business, small business editor, Small Business Guidebook, smallbizlady, starting a business, The Wall Street Journal Complete Small Business Guidebook, Wall Street journal

Fix Your Business Now!

Order SmallBizLady's new book Fix Your Business, 90-Day plan to Get Back Your Life and Reduce Chaos in Your Business. It includes the 12 Ps of Running a Successful Business and readers will finish the book with a new strategic plan to take their business to the next level.

About Melinda Emerson

Melinda F. Emerson, “SmallBizLady” is America’s #1 Small Business Expert. She is an internationally renowned keynote speaker on small business development, social selling, and online marketing strategy. As CEO of Quintessence Group, her Philadelphia-based marketing consulting firm serves Fortune 500 brands that target the small business market. Clients include Amazon, Adobe, Verizon, VISA, Google, FedEx, Chase, American Express, The Hartford, and Pitney Bowes. She also has an online school, www.smallbizladyuniversity.com, that teaches people online marketing and how to start and grow a successful small business and publishes a blog SucceedAsYourOwnBoss.com. Her advice is widely read, reaching more than 3 million entrepreneurs each week online. She hosts The Smallbizchat Podcast and is the bestselling author of Become Your Own Boss in 12 Months, Revised and Expanded, and Fix Your Business, a 90 Day Plan to Get Back Your Life and Reduce Chaos in Your Business.

Comments

  1. CASUDI says

    March 18, 2010 at 7:06 pm

    This was so well done, soup to nuts that it’s really challenging to write a good comment and add value. However, something did ring my bell on my third read. In the section on Business plan ~ road-map to success your comment Colleen, on taking on a business partner and having a business plan to clearly and communicate your vision and see if you are on the same page.

    Well, I was mentoring a solo~entrepreneur last week regarding a potential business partner. I suggested they actually do a marketing project together first. I advised each of them define how they would work together to really see if in practice they were on the same page.

    This could be a good first step however just suppose they both were to separately write a business plan for the partnership;and then compare them. I suspect fewer would actually take the step into partnership 🙂 @CASUDI

    Reply
  2. Michael Hsu says

    March 23, 2010 at 2:05 pm

    Great tips and Q&A for this week’s #SmallBizChat. Colleen couldn’t have said it better when she mentioned that starting out, entrepreneurs really need to take on ALL the jobs involved in the company. It is like having a kid (though I wouldn’t really know what that is like…) in a sense that the company really belongs to you and no one else will care much for it except you. You are the CEO, CMO, CTO and C-if everything else is on track-O.

    Under capitalization is a big thing because you never knew how everything cost so much money (sort of like leaving home for the first time.) and learning even just the basics of the numbers aspect of your business is critical. Read a few articles, get out your old accounting text book, ASK for help – being a technician is usually the case for most entrepreneurs, but business is business, and numbers are cruel reality that all owners should be well aware of.

    Would definitely share this post with all the entrepreneurs out there.
    .-= Michael Hsu´s last blog ..The new HIRE Act =-.

    Reply
    • Melinda Emerson says

      March 26, 2010 at 11:58 am

      Michael–

      Thank you so much for your comment. I also believe that you need to understand your costs and save your money before starting a business. Going from doing 2-3 job to doing 10-13 jobs is more than a notion. People need to be ready to wear lots of hats. Thank you for sharing my blog with others.

      Here’s to your business success.

      Melinda

      Reply
  3. chicago best restaurants says

    April 15, 2011 at 9:09 pm

    You made a number of excellent points there. I have a research on the matter and discovered generally persons could reach a decision with the blog.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner

Sign up for the SmallBizLady BUZZ Newsletter and be the first to receive updates and details about upcoming events:

We’re proud to be part of the Mediaplanet Empowering Small Business campaign! The COVID-19 pandemic brought hardship and ruin on the nation’s small businesses, but there’s now reason for hope. Learn about the resources, support, and tools available to help your small business bounce back and grow stronger than ever by picking up a copy of the campaign in USA Today and reading it online here.

Get a FREE Chapter of SmallBizLady’s Book,
"Become Your Own Boss in 12 Months, Revised and Expanded"!

Become Your Own Boss

Most Popular Posts

>Seven Ways to be More Profitable in Your Small Business
> 7 Ways to Attract Customers to Your Small Business
> 6 Tips for Managing Small Business Finances
> How to Run a Successful Multilevel Marketing Business
> 10 Ways to Grow Your Small Business With Instagram
> How to Sell on Facebook
> How to Get Over the Fear of Starting a New Business

Featured Videos

Bloomberg News Interview
How to Support Small Businesses During the Holidays

National Speakers Association
Winter Conference

Fox 29 Philadelphia
'Small Biz Lady' gives best advice for starting a new business in the New Year

Fox Business
Starting a Business

MSNBC
The importance of job mentoring for women

#SmallBizChat Live
National Small Business Week: Q&A

Good Day Philadelphia
Expert Shares Tips on How to Become Your Own Boss

Testimonials

Become Your Own Boss is a must read if you’re thinking of launching a business of your own.
Jean Chatzky, Bestselling Author of Money 911 and Financial Editor of NBC’s Today Show
Great step-by-step advice for anyone looking to start their own business.
Andrew C. Taylor, Chairman, Enterprise Rent-A-Car
Melinda Emerson has written a remarkable book. It is essential reading for anyone seeking to make the transition from working girl to successfully working it, as an entrepreneur.
Cynthia McClain-Hill, Past President, National Association of Women Business Owners
The perfect companion for those planning to go out on their own. Melinda delivers firsthand practical advice on how to be the successful entrepreneur. Read it if you want to get it right the first time.
Kenneth L. Shropshire, Professor at the Wharton School of Business, University of Pennsylvania
If you are looking for a versatile speaker who can talk about how to grow small businesses or get started with social media, look no further.
Heather Van Sickle Executive Director, National Association for Community College Entrepreneurship (NACCE)
Her wit and depth of subject knowledge were entertaining and empowering. Melinda is definitely on our short list of seasoned entrepreneurs and business leaders we look to invite back in the near future.
Tennille M. Robinson Senior content & Event producer for Inc. magazine
Melinda Emerson, “SmallBizLady,” is an engaging and witty speaker and a great addition to any conference. Her terrific presentation and compelling delivery give people the information they need and want to become their own bosses and grow success… Read more
Laurie Dalton White Conference Director, Pennsylvania Conference for Women
Melinda Emerson has been a fantastic small business and social media resource for the Pitney Bowes team. Not only is she personable and easy to work with, but she also has an innate understanding of the small business audience. My marketing programs … Read more
Justin Amendola, Former VP, Global SMB Digital Strategy, Pitney Bowes

Latest #SmallBizChat

The SmallBizChat Podcast: How to Turn Your Divine Gifts into a Business with Michelle Kopper

In this episode, Melinda Emerson engages with Michelle Kopper to explore her entrepreneurial journey and how she overcame fear to succeed. Michelle delves into the role of divine gifts and spirituality in business, offering insights into integrating personal beliefs with professional goals. The conversation addresses imposter syndrome, providing strategies for validation in the market. Michelle […]

Fix Your Business Q&A Video

Recent Posts

  • The SmallBizChat Podcast: How to Turn Your Divine Gifts into a Business with Michelle Kopper
  • How Smart Nonprofits are Building Recession-Proof Revenue Streams
  • The SmallBizChat Podcast: Hit It and Quit It with Mitch Axelrod, Dr. Dan Young, and Rich Trotter
  • 50 Best Free Apps for Small Business Owners
  • The SmallBizChat Podcast: How to Reinvent a Legacy Business with Rich Trotter

#SmallBizChat

  • SmallBizChat Archive
  • @SmallBizLady

Business Advice

  • How to Start

SmallBizLady Store

Products

Free Chapter

Get In Touch

  • FAQ
  • Be a #SmallBizChat Guest
  • Contact Us
Copyright © 2025
Quintessence Entertainment, Inc
PO Box 280
Drexel Hill, PA 19026
(610) 352-0680
Privacy Policy · Refund Policy

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner