Founders starting out have many questions about funding, hiring employees and how to generate interest in their product or service. It’s no surprise, then, that those were the kinds of queries small business owners Tweeted last week when Forbes asked what was on their minds.
Today, I’m responding to four of the questions submitted under the hashtag #SmallBizHowTo.
Would it be smart to apply for a small loan from a bank or lending company such as lendingtree.com in order to start my small business?
There’s a hierarchy for how you get enough capital to start any business.
No. 1 is that customers pay you early and customer revenue can fund your business.
No. 2 is you were born rich and you can dip into you trust account.
No. 3 is loans from friends and family. (This can present possible social ramifications.)
No. 4 is banks and lending organizations. Commercial lending carries legal issues.
Each one of these sources has pluses and minuses.
You need to write a table for yourself to see what risks you want to take: burn a bridge with a family relationship? Take out a lien on your house? Only you know the kind of risks you’re willing to take.
How do you handle HR when you are just starting out? Are there steps you can take to be "larger than life" in order to compete with larger employers?
Small companies can offer much more flexibility around conditions, hours and perks than a large company ever can.
Be a little creative about what you have vs. your larger competitors. Consider flex time, job sharing, having your employees work from home a day or two each week.
What is the best way to gain interest before pre-launch of a product? We are in our second week of social media
One of the best ways to get interest for free is called earned media. This incluces getting other people to write stories about your potential app, and getting word of mouth or buzz going to trade shows or conferences. The apocryphal stories are the launches at SXSW.
If you’ve got an app, you could launch in other countries, test customer reaction and learn how to best optimize demand creation.
If you’re a website or a service, you can decide to launch geographically or demographically and/or you might want to consider betas to make the product appear exclusive, such as by requiring knowing someone to sign in to get access.
How do I know when my small business is ready to get bigger?
This question implies what my grandmother used to say was, “You should be so lucky to have this problem.”
The answer is: When you can’t meet current demand.
Implicitly you’re saying you believe you have enough customer demand in your small business and want to scale. In a small business you want some clear evidence that there are customers and revenue before you open the next store or hire the next five employees.
Also on Forbes:
