How to Survive the Start Up Phase of a Micro-Business

Having started and run my own business(s) for the last 15 years I know that cash flow is king. Most every small/micro/home-based business is faced with the problem of cash flow and operating cost. Unfortunately most businesses fail for this one reason, the owners do not have enough startup capital and operating cash, thus pulling profits out of the business to pay themselves which strangles the business to an agonizing death.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• A desire to succeed
• A willingness to fail
• Be humble enough to accept the facts.
• Take steps to avoid failure
• Follow Thru

1. 

   Run your business with all the zeal and ambition as you can. Make a promise to yourself that you will not pay yourself or your personal bills from the business for 2 years.
   
   Goto step 2.

2. 

   It is now time to develop a plan to pay yourself or supplement the core business if you currently have income from a job or investments.
   
   It is most imperative for the first 2 years (and beyond) to have a minimum of 2 alternative income streams other than your core business. These alternate streams are not meant to get you rich or even to be sustainable, they are only meant as a cash flow machine so you do not pull money out of your core business.
   
   Let's Define what makes a great alternative income business.
   
   Goto step 3.

3. 

   Rules of an alternative income sideline business.
   
   1) Must not take more than 15 hrs per week of your time.
   2) Must be cash only. (No invoicing, credit lines, or terms of any sort)
   3) Must be able to double the money invested hopefully 3 times.
   4) Average item cost should be low (under $100) * Remember we are looking for cash flow, Higher priced items reduce activity and the turn times are way too long.
   5) You initial investment should be no more than $250.00 (Any more would better be applied to your core business)
   6) Must not be governed (No Licences, No EPA restrictions, No monthly fees or expenses, and no employees)
   7) Low tech products and services only (If you have to come back or make refunds you lose.)
   8) No Refunds
   9) The price is the price take it or leave it.(*Don't waste time with tire kickers, negotiators, and/or barter deals.)
   10) Your friends and family will tell you don't waste your time but this valuable cash flow that you can pay day to day bills with.
   
   Example....
   eHow Article #2161008
   http://www.ehow.com/how_2161008_buy-acquire-sell-profit.html (Cut and Paste)
   
   Goto step 4.

4. 

   Profits from this type of business should be applied immediately to your bills.
   
   I have set up a separate account that I use the bill pay from my bank to make weekly and even daily payments to my bills.
   
   Example.
   If I make $300 selling assorted auto parts online (craigslist) and the gross profit (Sales Price - Cost of Goods) is $150.00 I apply equal amounts of my utility bills. (I pay mortgage and credit in other ways)
   
   150/6= $25.00
   
   Elect.=$25
   Water.=$25
   Cable/sat.=$25
   Internet=$25
   Cell Phone.=$25
   Garbage.=$25
   
   I usually do a transaction like this about 8 times per month. (8*25 = $200) As you can see I have paid $200 each month to all of these accounts with ease, and generally get a bill at the end of the month showing a credit due me. This is a great strategy no matter what you are doing for income.
   
   Goto step 5.

5. 

   Do some brain storming stick to the rules in step 3 and apply the profits to your personal bills. Remember you promise not to take money out of your core startup business for 2 years.
   
   Good Luck.
   Tab...

Tips & Warnings

• Just do it
• Stick to the rules
• Stick to the rules (Worth saying twice)
• Pay your bills as frequently as possible.
• see eHow article# 2161008 as 1 alt. income
• Be open to opportuniy around you to make a quick buck.
• Make money but don't get gready
• If the product or service is not moving drop it
• Move on if something fails
• Don't get so involved in altnate income businesses that you forget your core business.

[globewatcher]

on 4/3/2009 Very good tips, I would like to start my own business some day. The biggest roadblock form me is start up capital (I guess it is for most people).

[consignmentchic]

on 3/14/2009 All good ideas...thanks 5* recommended ya