You’re starting a new business, which by its very nature is high risk. Of course you want to keep the risk as low as possible. I refer to a business plan here, and you can read about writing that in my previous post “The Business Plan”. In this article I discuss basic topics to keep risks low that I think are important.

Don’t quit your day job. You will need funds to buy supplies, set up your web presence, and maybe rent physical space. Keep your job until your business is making a profit. Estimates on the amount of time this takes varies. You should give yourself at least a year and asses your business at that time. If you don’t have a day job and the new business is going to be your day job, I strongly recommend getting at least a part time job to fund start up costs. This will have to be balanced with the amount of time required to make your product and the other responsibilities in your life. I discuss other possible funding below. The most important part of this step: be patient. Don’t drive yourself to the point where stress is destroying you. Remember, making your product is supposed to be FUN. If it’s not, you’re pushing too hard.


Work from home. If you’re a tile layer, you certainly can’t do this. Many small businesses can be and are started in the home. This is because there is no additional cost for work space, and is a way to save your precious start-up funds. If you choose this option, create a dedicated work space and be sure to make the rules clear to your family: don’t touch what’s here, don’t bother me while I’m here, etc. With a dedicated work space, you are able to leave your work-in-progress undisturbed. Do expect interruptions. It can’t be avoided if you’re working from your home. Plan your work day accordingly. Do the things that can’t be interrupted while the kids are at school. Other things that you can put down can be done when they’re home. You can also use this space as a tax exemption, but more on that in a later post.


Start with your mid-priced items. You don’t (at least I didn’t) have much starting funds. When it comes to supplies, find a wholesale company. You will probably need more than one supplier. I have found one supplier for gemstones and one for seed beads. Do the research before buying and find a good supplier. Google works well for this. Don’t spend all your allocated funds on supplies for a product that gives two pieces that cost your customer $75 each. The customers willing to spend $75 on an unknown are few and far between. Start with an item that has a low supply cost and a reasonable price for a customer coming to a new vendor. I started my business with earrings that started at $15 and went as high as $28. I’ll talk about pricing your items in another article. I chose these items because the price was something I’d be willing to pay if I visited a new store for the first time. You know your industry, so choose products that as a consumer you would find to be a reasonable cost.


Open a business bank account. You’ve saved up your start-up money, now get it out of your personal account and into a business account. Keep your ledgers separate. It’s less confusing and you can track how you spend your business funds. If something with the business goes sideways, your personal funds are separate and insulated.


Don’t take out a loan.I’m sure many of you disagree, but hear me out.

 Line of Credit or Loan?

Both options require you to be credit-worthy. If you know you have a poor credit history, take care of that first. Both options will charge interest. Shop around to find the best rate.

Loan – disbursed as a lump sum which you pay back in fixed monthly amounts; applicable to amounts that are known and well defined; you owe the entire amount; defined period in which to pay back

Line of Credit – may require collateral; upper limit given which you draw upon as you need it; if you’re not certain what your expenses will be, this is a better option than a loan; if you don’t draw out the entire amount, it is returned to the bank and you owe only what you’ve taken out (similar to a credit card); depending on the terms you’ve agreed to, the line of credit could be open indefinitely

The risk here is if you can’t sell your product, you now have a loan to pay off and no income with which to pay it. The advantages are reduced hours at your day job and more time to make your product and funds to buy your supplies. My personal choice, because I am highly risk averse, was no loan. Everything has consequences, and no loan means saving money. Take your time and save up money. You’ve waited this long, you can wait until you’ve reached the goal in your business plan. If you can do that, great! If not, the amount you need should be calculated and put into your business plan. A nice balance is to save part of the amount you need and find funding for the remainder. There are alternatives to loans and this is what I mean by “don’t take out a loan”. See the list below.

Those are my tips. Good luck, and please add comments that will help other
small business start-ups (and me!).



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