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How to Start a Business in Your Garage

By: Steve Johnson

4/13/2010 - 61 Comments

The unemployment is expected to remain high for several years and as unemployment benefits begin running out, many are going to consider starting a business.

Starting a business is not easy, especially in this environment of rising taxes on labor, capital and energy. 

The progressive movement coupled with the Obama administration has succeeded in creating the most anti-entrepreneurial environment in the history of our nation.

But if the job market is not getting better, your only choice is to go back to school and live the next few years on school loans or start a business.

If you want to start a business but don’t have a team of experts or a lot of money or any customers, where do you begin?

Here is the Key:

The key to starting a business is to start with what you have, use it as leverage to create sales and then grow your leverage to increase your sales.

There is a lot of information is that statement and it may not be easy to fully understand or appreciate it right away, so let me give a little more explanation. 

  1. Identify what you have
  2. Start selling
  3. Grow your leverage to increase your sales

Leverage

One of the primary advantages of a large corporation over a startup is leverage. Leverage is the ability to borrow or put to work something that gives you a competitive advantage.

So what do you have that a large corporation does not?  To start with, they don’t have your relationships, your personality and your ability to work much more efficient and productive at a much lower cost because you are taxed as an owner not an employee.  Your previous jobs skills and connections are perhaps your most valuable asset.

Now that you have identified what you have, put it to work. Sell something to someone. Find out what you could produce at a lower cost them someone is currently paying for a similar product or service. Then use your trusted relationship with them to sell them your product.  Make them happy. 

Then grow your leverage and increase your sales.  Once you sell something to someone, sell it to their friends.

After Sales

After you have started selling, then begin filling in the rest of your business model.  But sales are the most important so don’t spend too much time with a business model until after you are selling.

Business plans are better for starting large businesses that are used to sell investors on the idea before selling products to customers.  In this case, when starting a small business with just one or two owners, don't put too much energy into a business plan.

After you are selling something, you can type up your business model with whatever you are doing to create sales.

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