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If you’ve always wanted to quit your day job and start a business of your own, you’re not alone: starting a new business is one of the most common New Year’s resolutions, and certainly one of the most ambitious (hello, my 2016 resolution was simply not to die this year). But if you’ve never owned or started a business before, it’s probably not a good idea to give up everything right away and dive in—it’s better to start small, to begin with a beginner business.
The likelihood of striking gold on your very first venture is, to say the least, slim. Eight out of every ten new businesses fail within their first year largely because of mismanagement and inexperience. It takes a long time to build the skills and gain the knowledge to run a company, from knowing your customers to knowing how to run the numbers. But there are good ways to learn.
Do you remember that experiment you did in high school where you were partnered with someone else in your class whom you presumably didn’t like and were given an egg, to treat as if it were your beloved only child? The same principle applies here: come up with a “training-wheel” plan that won’t cost you a lot to start, one with a simple business model that doesn’t take a ton of effort to implement. Rather than look for a factory to work on a product, make small prototypes yourself and sell them at local craft fairs or events.
A starter business works best for services or consultation, but be careful with retail or manufacturing because those require a lot more time, materials, and funds. Instead, find a niche that you think you can fill with something, either a service or an item. “It’s much easier to compete for customers when you specialize. By clearly targeting a specific market — a particular industry or demographic group — you’ll make the most of your marketing dollars and can command higher prices,” says USA Today.
By starting with a very small, easy-to-run business, you’re ensuring that you aren’t taking too much on at one time and you’ll be less likely to sink. Plus, a starter business is a good way to gain and flex the business skills you do have. And it isn’t like you will only have one business idea for the rest of your life, so a little company gives you the room to explore what you like and dislike, and they can be good testers for new ideas.