A Guide to Early Fundraising for New Businesses

fundraising early stage business

A telling success factor for new businesses looking to make an impact in their industries is whether they can attract investment at an early stage of development. 

Whether you’re a private company looking for venture capitalist funding or a growth-stage company looking to be listed on a public exchange, early investment has proven critical for inspiring further funding in later rounds. 

This is true even in Canada, where the so-called Canadian advantage allows companies to reach profitability sooner. It’s still critical to attract upfront capital.

Engaging investors early on gives companies greater access to the capital funds they need for hiring key staff, developing new technologies, expanding internationally, and accelerating the business plan. 

For instance, the 2019 TSX Venture 50 companies—which are all growth-stage companies accessing investors on TSX Venture Exchange—reported increasing their employee count by roughly 2,200 people in 2018, representing an average hiring growth of 307 percent. This would not have been possible without the support of their investors.

More specifically, companies are able to see notable success when they allow investors to engage early on. Well Health Technologies, for instance, was able to continue expanding through a scalable acquisition model. And for Drone Delivery Canada and Siyata Mobile, having the support of investors led to partnerships with Air Canada and AT&T, respectively. 

Attracting investors in the early stages helps bring in new partners that are committed to your business. They can expand your network by introducing you to other investors, customers, or partners, helping you to continue accelerating your business plan.

However, new businesses often find the idea of securing investments a daunting task with a lot of moving parts. If you know it is time to bring in investors but don’t know how to get their attention, start by making sure you secure the help you need to attract your investor audience quickly and effectively.

Before even reaching out to investors, it is important that you understand the market you’re trying to tackle—market research.  A lack of market need is the number one reason startups fail, suggesting that companies need a better way of evaluating the state of the market before launching their business within it.

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Savvy investors will be looking for this understanding so they can ensure a profitable return on their investment. As such, your first round of investment will act as a proof of concept for the stickiness of the business concept itself.

Early investors will also be looking for insight into the growth potential of your business. Be sure to demonstrate its potential by clearly documenting key performance indicators, highlighting key customers, and demonstrating realistic revenue projections. Finally, they’ll see the value in a team that hosts key personnel and advisors with proven track records in your industry.

As you prepare to engage your first group of investors, consider incorporating these six steps into your approach.

1. Communicate often

For publicly-listed companies, there are clear obligations for disclosing information to investors—but that is not quite enough. Investors can’t rely on just International Financial Reporting Standards statements to get insight into how a company is doing. These reports can be difficult to digest and often don’t offer real-time representations.

To help investors get an insider view on company growth, it’s important to share meaningful metrics consistently. Communicate early and often to maintain an active interest from your investors.

This also goes for private companies that don’t have the same reporting regulations—investors will always appreciate that level of transparency.

2. Think long term

Look for investors who are buying into the vision that you established at the outset of your business and who will want to participate for the long-term. And when you find them, keep them on board by letting them buy in early so they can see success alongside you.

People love to “average up” by doubling down on winners. If you take less money at a lower valuation, you can then prove the execution of your business and raise additional rounds at sequentially higher valuations.

3. Start early

Start early not by asking for money right away, but by engaging the help you need to structure the next round of financing. This will give you the chance to prove to your investors that you can execute on your plans.

And if you’re looking to the public markets, consider listing early as well. This will give investors a chance to follow your execution.

4. Do not be greedy

Ask for what you need in order to prove that your business model works. Then, structure further financing after that.

Investors will want to continue investing if they see positive results. To start, it’s better to have a little piece of a big pie than a whole lot of nothing, so don’t be greedy. Leave money on the table for other people to win with you, and they’ll be incentivized to contribute to the win.

5. Always be transparent

There’s no straight line to success. Everyone fails and pivots, even big enterprises. If you make a mistake, it is always best to be upfront instead of trying to hide it. Breaking investor trust can have dire consequences.

If you are open about your mistakes and failures, investors who have been with you from the beginning are likely to forgive you—as long as you have clear, actionable steps to correct the course moving forward.

6. Build your profile

Distribution is key in any business, so use branding, partnerships, and marketing to build a profile that represents your company. Social media, content marketing, guest editorials, and other channels can position your company as an industry leader and influencer that investors want to associate with.

If you want to leave your mark on an industry, engaged and active investors will be a major factor in your success. To navigate the public investment landscape and get them on board, start early, communicate often and transparently, and keep them interested in participating in the long-term growth of your story.

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How to Expand Your Cannabis Business Across State Lines

expand your cannabis business across state lines

One of the most valuable things you can do for your company in the cannabis industry is expanding into additional states. Unfortunately, it’s also one of the most expensive. At MKSI Investments, we have had to learn the hard way.  

Despite regulatory complications and federal illegality, becoming a multi-state operator, or MSO, is still one of the most valuable things you can do for your company in the cannabis industry. The market is expanding so quickly that if you’re unable to get your products in shelves across multiple markets, you’re falling behind.  You can potentially double your market cap with each additional state you get your brands efficiently into. 

Companies like Acreage, Cookies, Harvest, and CannaCraft are paving the way here. For the first time ever, you’ll order up an 1/8th of Gelato by Cookies, in Vegas, Phoenix, Denver, or even Detroit, and it’ll actually be the very same fire you fell in love with back in Cali. 

Thus, becoming an MSO is also one of the most competitive, expensive, and time-consuming ventures you could pursue. It sometimes takes collaboration and teamwork with your competitors, lots of funds, and lots of patience. 

Identify industry operators that do things well and reach out. If you have a facility with extra capacity they could benefit from, see if they’d manufacture for you in their market in exchange.  There’s no need to be a top-heavy public company. Roll your sleeves up and find other good people who are actual operators. 

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Collaboration

Collaboration is essential for access to talent, resources, and exposure in this industry.

It was not until the third or fourth state we were looking to take our old retail brand into that it dawned on us that we were going to have to get creative in order to keep going.

All I wanted was to grab a few new dispensary spots along with a nice big warehouse in a new state. I ended up blowing money left and right hiring real estate brokers, lawyers, lobbyists, local consultants, and getting stuck in City Hall or Commission meetings. 

Rewinding the clock a handful of years, there were only a dozen or so companies doing the national circuit, and most of us knew each other; for better and certainly for worse. Be it Colorado, Nevada, or Florida, you would see the same folks competing for the same overpriced buildings and getting overcharged by the same law firms; we started sympathizing with each other after a while. 

It wasn’t until later at a hotel bar that it occurred to us to divide and conquer. I did not actually want to move my life to whatever state we were in, I just wanted a big building to grow great cannabis, as well as a place to extract it and process it for our brands.  

What if we went halfsies on a spot with our competition? Better yet, what if we went halfsies with our competition on a spot in a few states? 

All of a sudden we were stretching our dollars twice as far. And maybe, more importantly, we could draw straws on attending meetings and flying to different states every few days. So, over a few too many Rye Manhattans with a twist of lazy, the concept of consolidated production and manufacturing in cannabis was born to us. If you are going to do well collaborating, you are going to have to play well with others—including your competition.

Money

There are few things more expensive than lawyers and lobbyists; overpriced real estate, extraction equipment, and the process of converting an old logistics warehouse into a modern indoor cannabis grow are some personal examples. 

If you have a brand or product that is more than just a logo a few designer grads whipped up for you, then you are going to need to get involved in the cultivation, extraction, and manufacturing of your products in new markets.  Ask for references and resources locally if you’re building a new project, but look everywhere for an experienced engineering outfit they will be priceless when it comes to build time and cost.

What this means is controlling your supply chain via your facilities. What good is having your flower brand in Vegas if the guys you send your logo to just slap it on some mid-grade fluff they couldn’t sell? 

You have got to roll your sleeves up and find growers you can collaborate with to make sure the product you’re putting your name behind is as good as the stuff that earned you your name.

If you are blowing butane into high-end extracts and want to cover more ground, go find someone who knows from real experience that safety is far more important than equipment that actually works half as well as the company representative at the latest NCIA meeting claims. 

It would be much wiser to add a new set of chillers and extractors to a friendly competitor’s facility and throw down on the rent and overhead. It’s more cost-effective than starting from scratch looking for a building of your own to rent and than spend $100/foot or more improving. 

Don’t worry about being a big multi-state operator, many of them have zero clue how to actually operate a cannabis business and are little more than the equivalent of a paper contractor consolidating revenue across their holdings.  

Focus on identifying an opportunity, making sure you have a competitive advantage, which ultimately translates into margin, and start executing.  There are plenty of VCs and private investors out there these days eager to throw money at a well-articulated opportunity. Alternatively, start small and grow as you can afford to, it may take longer but you’ll be all the wiser worth the experience it brings. 

Patience

It’s important to remember that this is an incredibly slow process. Rome was not built in a day.  Architects take forever. Plumbers, structural and mechanical engineers take forever, especially when the fire life-safety engineer is running sprinkler pipes through your lights or the exhaust hood for your distillation gear. Regulatory red tape takes forever to weave through.

The mentality of getting in and cashing out on the “green rush” is somewhat of a blinding force within the cannabis industry today. Too many of the people who are racing to get involved (even linearly)  with cannabis are uninformed and unprepared for the cannabis industry. 

The cannabis industry is a fast-growing behemoth. But before you can realistically consider expanding across state lines and into new markets, you need to go back and consider the research. Pay attention to the details that went into starting out in the first place. 

Expanding your business is a huge opportunity. With the right tools and the right support structures in place, you’ll be able to accomplish so much.  Make sure to think outside the box about your business plan.  

Assuming you’ve written one, poke holes in it.  Imagine everything that could go wrong and think about how you would adapt and if you could overcome.  Don’t start a business planning on best-case scenarios. This is the cannabis industry and someone or something will always get squirrely somewhere. 

Our strategy for expanding as a multi-state operator has helped some of our favorite brands and investments—like Cookies, Guild, Lemonnade and CannaCraft—conquer North America.

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Martin Kaufman

Martin Kaufman has extensive entrepreneurial experience in construction, real estate development, business development, finance, and more. He’s founded numerous successful companies, including SK Builders, Core Security Solutions, and Mesh Ventures. Today, Kaufman leads MKSI Investments with an eye toward building a successful, sustainable, equitable cannabis industry. Mr. Kaufman holds an associates degree in botany and a bachelors degree with honors in law and society from the University of California, Santa Barbara.

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How to Grow a Successful Boutique Fitness Business

how to open a boutique fitness studio

The boutique fitness studio movement is now seen as the most viable way of entering the fitness industry. If you’re thinking of taking the leap and starting your own business, first read this quick guide to what boutique fitness is, how to start a studio, and the keys to sustained growth in the long term. 

What is boutique fitness?

Put simply, a boutique fitness studio is a small gym that offers group exercise focused on one or two types of fitness. High-intensity interval training (HIIT), functional fitness, spinning, or barre are typical staples of the boutique fitness studio. And while traditional health clubs, big-box gyms, and personal training focus on the individual, boutique puts a big emphasis on community and training together. 

Boutique studios started to emerge in the late nineties and early 2000s in the form of Barry’s Bootcamp, Crossfit, and Orangetheory. The premise was that they could offer a different fitness experience to the one usually found in the big box titans—like Gold’s Gym and 24 Hour Fitness. Barry’s Bootcamp, for example, is an hour of military-style training set in a nightclub-like surrounding, a world away from the grunt and clank of the weight room floor. 

Fast forward to today. Boutique fitness franchises are now some of the biggest names in the industry. F45, a fitness franchise born out of Australia, is one of the fastest-growing in the world, with over 1,500 studios and 6 million members worldwide. 

Meanwhile, Soulcycle, the spinning obsession of every trendy New Yorker, filed for IPO in 2018 only to withdraw at the last minute. However, the fact they are even in a position to do such a thing shows the heights some of these studios have reached. 

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Why is boutique fitness booming?

There a couple of reasons why the boutique approach is winning out over traditional gyms. According to a survey by Les Milles and Nielsen, 63 percent of people attend boutique fitness studios for the community aspect, while 47 percent of people participate because of the atmosphere. These two factors definitely play a large part in its success. 

For those hesitant to enter the gym by themselves, the high energy social atmosphere can push a person beyond what they would achieve alone. Add to that the up-tempo music, enthusiastic instructor, and sense of camaraderie, and boutique fitness classes offer a potent mix of fitness and fun.  

Another significant factor in its success is the highly specialized and flexible nature of boutiques that appeal to a younger generation of customers. The big box gym model simply doesn’t provide this, with their restricted workout offerings and contract-locked memberships. 

With a boutique, a person can hop from studio to studio, attacking a HIIT class one day, pumping through a spin class the next, and rounding the week off with a relaxing dose of yoga. 

Concurrently, these studios exploit the younger generation’s cross-pollinated need for a healthy lifestyle and an instantly Instagrammable moments, making it the fitness experience of choice for millennials.

What makes a successful boutique fitness studio work?

So you have seen the way the wind is blowing, and you’ve decide to open your own boutique studio! The first steps you take in starting any business are important.

The advantage of setting up a group class-based boutique studio is that it doesn’t require a huge space with mountains of equipment. Some have even grown their business without a specific location, running classes down in the local beach or park with a set of weights. Humble beginnings or not, you will need to cover a couple of absolutely key areas to have a chance of building your boutique fitness business successfully. 

Having a solid business plan

Benjamin Franklin said it well: “By failing to prepare, you are preparing to fail.” 

When it comes to setting up a fitness business, this means creating a business plan. Think of the plan as a strategic roadmap that will guide you along the often bumpy road to fitness business success.

Not sure what to include? Bplans offers a library of free sample business plans for fitness centers that you can view and download to help get you started. You can also download a free business plan template to guide your first draft. 

Not only does the plan set out a direction for your business, but it also forces you to think about your competition, your marketing strategy, and most importantly, who your ideal customer is going to be. If you’re looking for more resources to help you get up and running, check out this guide to starting a fitness center

Generating pre-sales before you open your doors

A common mistake made by a lot of first-time fitness entrepreneurs is that they wait for the doors to open to begin their sales and marketing. This is a mistake and means you will be engulfed by an ocean of problems from day one.

To give you a chance of staying somewhat afloat, start signing up members while you are setting up the business. This ensures you have some recurring revenue coming to cover overheads in the beginning. Another advantage of doing this is that you can start a referral program early. Word of mouth can be so effective in building up your membership base early on. 

This opening day checklist will give you some insight into what you need to do before you open to the public, and how to have a great opening day too.

Doing the right kind of advertising and marketing

How you market your fitness business is crucial. Today, Facebook and Instagram ads are now the ad platforms of choice for small businesses of any type. There are more users on Facebook than any other platform, and Instagram’s reach is growing daily. Because Facebook owns Instagram, ad campaigns can run on both platforms through Facebooks Ads manager.

The big reason they work is, though, is the Facebook Pixel. This is a piece of code that goes on your website and tracks the actions visitors take on particular pages on your site. Facebook Ads Manager then groups these visitors into a list you can target with ads based on the action they took on your website. Better still, you can create lookalike audiences of people with similar behavior and interests to those who have visited your site.

How should fitness studios build their brand?

Stephen King (the marketing expert, not the horror author) has this to say about branding: “A product can be outdated, but a successful brand is timeless.” 

And this is true for a boutique fitness studio. Fitness fads will come and go, but if you have built a strong brand that resonates with people, you will keep them coming back for more. 

The reality is, though, that the priority is building up a membership base and keeping the lights on for the first year or two you’re open. However, to bring the business to the next level, you need to have a distinctive brand that people can identify with.

Take a look at some of the studios we have talked about: F45, Orangetheory, and Soulcycle

Each has its own distinctive logo, coloring, slogan, and tone of voice which people can identify with. As we discussed the significant driving factor behind boutique is the sense of community. Another word to describe this is tribe. It is these distinctive brand features that people identify as features of their tribe. 

So the next step after keeping the ship steady is to build your brand. To do that you need to cover these four important bases: 

Determine your ideal customer

Creating a brand that attracts a particular customer means understanding the characteristics that define this type of potential customer and what resonates with them. Developing a buyer or user persona is a good way to think it through.

Define what makes you different

Lock in precisely what your mission is and what you do differently from any other studio in the local area. Then create a unique value proposition that really showcases it. 

Find your voice

Communicating what you stand for the outside world is fundamental. Take a look at this example by The Studio Method Cardiff: “Tailored Training.” We know precisely what this studio is about. It won’t be crowded and generic, and will be tailored to give you the best chance of succeeding in your fitness goals.

Here’s a guide to establishing your brand’s voice and tone to help you get started

Create your image

Your logo, font, photography style, and colors make up your brands image. It needs to be a visual representation of the previous points we have discussed.

Take Orangetheorys distinctive splat logoThe logo represents a fat cell exploding. In Orangetheory workouts, the goal is to hit the “Orange zone” for the workout to take maximum effect. This achieved through 12 “splats” per workout. This is a great example of the brand running through every aspect of the business. 

Why referrals and retention are the keys to long term growth

For any fitness business, be it big box or boutique, the best way to succeed in the long term is through referrals and retention. The longer you can keep your customers (often through a subscription type business model), the less you have to spend to find new customers.

For many lifestyle-oriented companies, social media ads can be crucial to getting you off the ground initially, and should always be part of your acquisition strategy. However, good old fashioned word of mouth marketing will always be the most powerful acquisition strategy as you grow. 

A friend’s recommendation can be so much more useful than a social media ad or flashy special offer. In fact, according to Hubspot, over 90 percent of people believe in product or service recommendations from friends. 

Referrals are such a low-cost retention strategy—often the greatest cost you incur is whatever incentive you offer to members. Running a referral program can also help you to identify customer service issues. If a member is hesitant to refer your studio to a friend, find what the problem is and try to solve it for that member before they churn. 

Retaining the majority of your members is the only way to stabilize and grow for a boutique business. The big-box model of getting in as many members as possible with any ongoing aftercare does not work here. 

Having an effective retention strategy makes sense financially as well. Harvard Business Review has reported that it’s 5 to 25 times more expensive to acquire a new member than to retain an existing one. Providing the best member experience in which your members are having fun and hitting their fitness goals should be top of mind as you grow. 

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Eamonn Curley

Eamonn is the associate content manager of Glofox. Glofox is boutique fitness management software that helps you engage your members and grow your business. He is focused on helping small fitness businesses and larger franchises through his informative and educational content.

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How to Open a Successful Hair Salon

how to open a hair salon

If your dream is to open a hair salon, now might be one of the best times to do it. According to Zion Market Research, the salon industry is growing steadily and is projected to continue growing. They estimate that the global spa and beauty salon market should reach approximately 190.81 billion USD in 2024. In the U.S. alone, the salon industry is estimated to be worth $47.1 billion, and the market size is expected to increase by 1.5 percent in 2019.

If you are planning to start a hair salon, this guide will give you the details you need to get started. Plus, we’ve asked two salon owners to offer some tips to get your shop up and running.

Dallas Alleman, the owner of Salon Du Beau Monde in New Orleans, and Avi Shenkar, the owner of Philadelphia-based BLO/OUT, have different backgrounds and different business models, but share similar strategies for success.

Alleman has a 40-year history in the salon business, as both a licensed cosmetologist and an instructor. He has opened three salons in New York, Santa Fe, and New Orleans, and his current endeavor is a high-end boutique salon that offers all the traditional services.

Shenkar, on the other hand, is an entrepreneur with business experience, but no salon background. However, he has opened two BLO/OUT locations in Philadelphia and is working on three other locations. 

While they may run different types of salons, many of their tips for success are the same. 

It’s important to have a plan in place before you open your salon. Here are a few things you’ll want to do before you open:

Create a business plan

No business can function properly without a business plan. A business plan acts like a roadmap, a document that will guide your business to success. 

But, business planning doesn’t have to be a long drawn out process. In fact, you’ve probably already put together a lot of the information mentally, or even scribbled a few notes on paper. The point of a solid business plan is to figure out what your business is, how it will be successful, and how you’ll troubleshoot problems.

Our article on How to Write a Business Plan is a good starting point if you need a formal business plan, and if you’re looking for a faster, lightweight planning option, check out our guide to Lean Planning. You can also download our free business plan template, and take a look at our salon industry sample business plans to see how other salons have approached the process. If you’d rather not start from scratch, you can also try LivePlan, our business planning software.

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Figure out funding

Whether you’re seeking a traditional bank loan or borrowing money from friends and family, you need to figure out how much money you need to get started, and where it will be coming from. 

Most likely, you’ll be doing a combination of multiple funding methods, and you may be using your own money and bootstrapping your business. Regardless of what route you take, it’s important to have a clear idea at the outset of where the money is coming from. Our funding guide gives an overview of your options if you aren’t yet sure what funding options are right for your salon.

Find a mentor

As you’re planning your business, it’s a great time to find a business mentor. It’s best to find someone in the salon industry that can answer questions for you as you start and grow your business.

Put an accounting and inventory program in place

To keep track of your money and project growth, you’ll want to implement an accounting and inventory program. 

On the accounting side, you’ll need a program to track your revenue and expenses. You’ll also need to figure out how you’ll pay Uncle Sam, so it’s a good idea to sit down and chat with an accountant to help you get started.

You’ll also need a way to track inventory; Salon Today has some great tips on this particular topic.

Hunt for the right location

Choosing the right location is the difference between success and failure, Shenkar says. He admits that if he could go back and pick a location for his first salon, he probably wouldn’t pick the same spot. 

You want to select a spot with good traffic, high visibility, and is located where your target demographic shops or lives. Shenkar advises being fussy about your location, as it’s vital to the success of your salon.

Aside from touring around various locations with a realtor, Alleman suggests driving through the areas that you want to be located in and look for vacant properties. Just because there isn’t a “for sale” sign in the window doesn’t mean it’s not available. In his experience, people sometimes hang on to a property for sentimental reasons and are willing to rent it out if the right opportunity comes along. It never hurts to call and ask the owner if an arrangement can be made.

You don’t just want the right storefront—you want the whole package, says Shenkar. So, do your homework. Know the demographics, the local competitors, and think about how your customers will get to your salon. Is there ample parking? Is a construction project planned on your block? You want to know everything you can about the area before you select a location.

With the planning stages complete, you’ll move on to the nitty-gritty details of actually opening your salon.

Build your salon brand around the clientele you want

Before you start painting the walls and picking out furniture, make sure that your brand vision matches the kind of clientele you want to attract. According to Alleman, this is one of the most important lessons he has learned.

“You want your customers to feel comfortable in your salon, so make it a place they want to visit,” he says.

This means taking what you know about your target market, and working to create a brand for your salon based on their interests, tastes, and habits. Don’t overlook the importance of building a brand for your salon; the idea of “branding” might feel like something only big businesses do, but it’s necessary to tailor your look to your intended client base, and creating a brand is a key part of that process.

Provide excellent customer service

After you’ve created an environment that your clients will love, you have to follow through by offering excellent customer service.

“Provide an experience for your customers, not just a service,” Shenkar says. “The overall experience is what keeps customers coming back.”

Consider thinking through your customer service strategy early on, including hiring for emotional intelligence, rather than just skill set. And, you may want to look into tools to help you deliver better customer service, like a shared inbox tool to manage inquiries and booking requests

Set aside money for marketing

To be successful, you need clients. To attract clients, you need a solid marketing plan. Alleman suggests setting aside some money to market your business; without it, you’ll struggle to be able to really execute a marketing strategy. 

Create an attractive, well-thought-out website

For starters, you need a good website. Alleman suggests hiring a professional to create your site if you can afford it. That said, if you’re tight on cash, there are plenty of DIY website platforms out there. Your site should be attractive, easy to navigate, and ideally include helpful information for your customers, such as hours, location, contact info, and pricing. As most salons use an online booking system nowadays, that’s also an important element to look into (or you may lose customers to salons who do offer this convenience). 

When designing your website, it’s important to return to your brand vision and what you’ve learned about your target market. Your site is an extension of your brand, so it should be cohesive and match the image you want your salon to present to customers. 

If you’re building your website yourself, check out our guide to building a website.

Find creative, low-cost marketing ideas

You want to get the word out about your salon, and getting involved in your community is a great way to do that. Consider hosting an event like a ribbon cutting or a small charity event to attract more customers—for example, sponsor a school play or have the staff volunteer at a local baseball game. 

For more marketing strategies that can be relatively low-cost and will help you build your presence within your local community, check out our article on how to attract customers for your opening day

Set up and utilize social media accounts

Social media is an important component to your marketing plan, Shenkar says. 

If you wish to set up accounts on a variety of platforms, it’s not a bad idea to do so. However, make sure you can confidently say whether or not your target market uses the platforms, and that you have the bandwidth to post content on multiple platforms before you commit. 

At a minimum, it’s a good idea to build your presence on Instagram, as it lends itself well to a visual business. Start by getting a sense of what hashtags are popular within your niche and creating a content strategy, as well as following other local businesses and encouraging your customers to tag your salon when they visit. 

Don’t assume product lines will generate huge revenue

As an owner, you’ll need to select a product line. There are lots of options to choose from; while some shop owners sell a variety of product lines, Alleman advises against it.

“I find that choosing one brand to work with is less confusing for the client and the staff,” he says.

Some shops sell a lot of product, but Alleman says you shouldn’t look at it as a big revenue source. You’ll spend money up front to buy inventory, and even though you’ll sell it at a price to make a profit, that money usually goes right back into purchasing more product. So, it’s smart to consider starting small, and perhaps focusing on one product line in the beginning.

Once you’ve thought through all the details of how to open your salon to the public, you’ll turn your attention to how to grow your business. Here are some areas you’ll want to keep in mind. 

Hire staff based on personality

When you’re first starting out, you might be the only employee. But hopefully, your shop will be so popular that you’ll need to hire additional help, as well as bring on more stylists. When that happens, Alleman suggests hiring someone based more on personality than skill.

“I don’t hire for talent—I can teach a new hire the skills I want, but I can’t train someone to love and nurture my clients,” he says.

You want your clients to enjoy coming in. Of course, you want someone who is good at what they do, but you shouldn’t base your decision on skills alone. Personality matters.

Plan for finding new customers and retaining them

When a customer finds a stylist he or she likes, they usually become repeat clients. However, this doesn’t mean you should let up on your marketing efforts. Even if you have a steady stream of customers, you should build on the marketing efforts that you’re already using.

“I don’t believe in depending on any kind of business,” Shenkar says. “New client acquisition should be a full-time job and should never be overlooked. Contentment will kill a salon.”

Revisit your business plan regularly

A business plan should always be viewed as a work in progress. With each passing month, you learn more about your business and your customer base. 

It’s a good idea to go back to your plan, read it over, and make sure you’re still on track. A monthly plan review meeting can be helpful, as can running a SWOT analysis on your business. 

Look for ways to save on overhead

When you first open your doors, you may have splurged on a few things that you thought you needed, but really don’t. With your business established, review your inventory and see if you can make any changes or cuts to save money. Take a look at your monthly expenses too—is there anything you can trim back or get rid of? Maybe you can downgrade your internet service, or cut back on the amount of product you’re buying each month.

Opening a salon is a bold endeavor. As with any new venture, it’s important to plan as much as you can and be willing to adapt as you learn what works best for your business. You’ll spend a lot of time and money to get your salon off the ground, but Alleman says there is nothing like running a sought-after, successful salon.

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Lisa Furgison

Lisa Furgison is a journalist with a decade of experience in all facets of media.

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Gain Financial Freedom With Your Own Ad Agency

This online course shows you how to start a marketing ad agency for greater flexibility at work and at home.


1 min read

Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.


The startup boom made it pretty clear that a lot of people would love to launch their own idea and work for themselves. If you’re craving the creative and financial freedom that comes with your own business but can’t seem to get started, How to Start a Marketing Ad Agency is the online course you need to succeed.

Entrepreneur Justin O’Brien uses his experience flipping affiliate sites and marketing more than 500 businesses to show you how to start your marketing ad agency. In just two hours of lectures, he’ll show you how to pick a profitable niche, then choose a name for your agency and get your website up and running.

Once you’ve picked your niche, you’ll need to conduct extensive research on the industry and related keywords. In the final sections of this class, O’Brien shows you how to attract clients who need your niche marketing, and how to structure your work to make more money and enjoy greater freedom.

How to Start a Marketing Ad Agency has a sticker price of $197, but you can kickstart your agency right now for only $10.99 (94% off).

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How a CRM Can Help You Transform Your Side Hustle Into a Business

How to use a CRM to grow a business

So you have a new business—one that’s small but growing. Or maybe you have a side hustle that you’d like to turn into something more. You’ve considered investing in customer relationship management (CRM) software, but it doesn’t seem like it’s worth buying until you have more customer relationships to manage.

For certain relationship-centered businesses, CRMs have a litany of value, even if your business is cash-strapped and just getting off the ground. A simple CRM system can cost only a few dollars each month, but it’s an investment that can scale as your side hustle turns into a full-fledged business.

How a CRM can help small businesses stay organized

A good CRM system can benefit businesses and entrepreneurs at all stages.

For business leaders who are big on ideas and not great with organization and structure, CRMs can be a welcome ally. Some tools provide daily calendar reminders in addition to keeping track of all the customer information you might struggle to remember. Or it might make it easier to schedule meetings, leave notes for yourself, and schedule follow-up reminders for just about anything. And if you do forget to call someone back? Your CRM can remind you to get it done.

If your business requires a lot of networking and customer relationship management to get off the ground, a CRM keeps all those leads in order and ensures that you follow up on them. You can categorize contacts for future marketing purposes, and pull up reports to see who hasn’t been contacted in a while. You can even use it to see a visual representation of your network to help you identify key players.

Sales-focused businesses can use CRMs to curate customer lists and help track every step of your sales process to ensure no lead goes unfollowed. You can also use reports to calculate the average number of touches it takes to close a sale.

Whatever your needs are right now, look for a CRM that will provide that. You don’t have to buy a CRM with all the options that you’ll need in five years—you may not need all the bells and whistles at once.

Download your free business startup checklist today!

Your CRM in the early stages

CRMs don’t just automatically provide value. You need to have a strategy for how you plan to use your CRM so you can make the most of its features.

Even before you have customers, a CRM can help you leverage your personal and professional networks to verify your ideas, find mentors and cheerleaders, and generate your first few leads and referrals.

When your business is ready to move from side hustle to small business, a CRMs can help you create a new client onboarding process that looks professional, saves time, and helps you avoid writing the (almost) exact same email for each client. 

And when growth is happening fast, a CRM can keep leads (and money) from slipping through the cracks. A flood of new customers can be overwhelming, but a CRM can ease growing pains by helping you stay organized and cement processes to help you grow. If your growth plan includes additional employees or a virtual assistant, your CRM can become a hub for your team.

How to make a CRM work for your side hustle

Once you’ve decided you’re ready to push your side hustle into a business and you’ve chosen the CRM to help you do it, what’s next? Here are four ways to maximize the potential of your side hustle and its CRM:

1. Upload every contact

Upload every contact to it. This includes family, friends, and colleagues.

When you’re just starting a business, everyone you know can lead to your first customer, referral, or advocate. Keeping everyone in your CRM means you can log relationships, track follow-ups, and keep the big picture in mind.

2. Document every touch

Add rich details to your contact profiles. When you’re able to reference everything about your last contact, the customer will feel remembered and valued and be far more likely to engage with your business in the future.

By keeping a complete relationship history in the CRM, you’ll put less mental stress on yourself and be able to pick up right where you left off during your next conversation.

3. Schedule follow-ups

Schedule a follow-up after every touch. Follow-up reminders are one of the most important features of your CRM.

After every interaction with a contact, schedule some time to talk with him or her and forward an agenda. That way, you won’t drop the ball on any of your relationships, and you don’t need to stress about remembering when to circle back.

4. Test everything

Test absolutely everything. Once your business is operating, your CRM can help you iterate and improve.

For example, you might notice that your most common lead source is client referrals. So you decide to start a more referral program for your business. You can use your CRM to set up a pipeline to track your referral program. You can even use custom fields to help pull reports to see if your referral program is leading to more sales or higher lifetime value for new leads.

No matter where you are in your business process, a CRM can help you boost productivity, stay organized, and build your customer base. Don’t put off this valuable investment. Once you have one, you’ll wonder why it took you so long.

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Alex Haimann

Alex Haimann is partner and head of business development at Less Annoying CRM, a simple CRM built from the ground up for small businesses. Thousands of small businesses use LACRM to manage contacts, track leads, and stay on top of follow-ups.

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How to Start a Bed and Breakfast

how to start a bed and breakfast

This article is part of our Bed and Breakfast Business Startup Guide—a curated list of articles to help you plan, start, and grow your bed and breakfast business!

It’s an image that puts you in an instant state of relaxation—a roaring fireplace in a cozy rural bed and breakfast, sharing stories with fellow travelers while enjoying a glass of brandy or your favorite red wine.

The romantic notions so closely associated with a bed and breakfast have made owning one a popular dream for many people. This is one of the reasons the bed and breakfast (B&B) industry has grown so significantly in recent years.

Do you sometimes drive by a historic property and find yourself fantasizing about turning it into a bed and breakfast? Do you imagine spending your mornings preparing a hearty meal for tourists from around the globe and your afternoons filling the place with the intoxicating aroma of fresh-baked cookies and muffins for when they return?

If this is something you have given serious thought to, starting your own bed and breakfast can be a rewarding and profitable venture. But be sure to go in with both eyes open, as it also requires constant hard work and attention to detail, which might not be a keen interest for everyone.

This article offers step-by-step information on what goes into prepping for and launching your very own bed and breakfast business. To provide an inside perspective on what it takes to run and maintain a successful B&B, I interviewed Kathleen Karamanos, owner and operator of Fundy Heights Bed and Breakfast in Saint John, New Brunswick, on Canada’s scenic East Coast.

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What is a bed and breakfast?

If you’ve never had the unique pleasure of staying in a bed and breakfast, you may easily confuse it with other small, privately run inns and motels.

A bed and breakfast is a hybrid which blends the luxury and comfort of an upscale hotel with the atmosphere and décor of a beautiful private residence. Often they are older historic properties which people seek out for the experience of centuries-old hospitality. In fact, 36 percent of American B&Bs have received some kind of historical designation by a preservation society.

Whether the property is historic or not, what makes the experience different from hotels and motels or vacation rentals is the personal attention guests receive from the owner. Playing the role of host, chef, and meal companion, the B&B owner is fully immersed in the guest’s experience. As the name would suggest, the nightly fee includes a hearty, home-cooked meal the next morning.

It’s worth noting that the lines between vacation rentals and traditional bed and breakfasts are ever more blurry, thanks to Airbnb. Prior to 2017, Airbnb was much more focused on the vacation rental experience—meaning your guests check in and it’s likely that you might not ever seem them, and even more likely that breakfast isn’t part of the deal. But these days, you’re more likely to find B&Bs listed alongside regular rentals on Airbnb. 

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The state of the B&B industry:

In the United States alone, the B&B industry is expected to top $5 billion in 2020, with more than 19,000 establishments across the country. Unlike major hotel and motel chains, bed and breakfasts are typically not owned by corporations.

According to the latest figures, B&B ownership in the United States breaks down as follows:

  • 72 percent of owners are couples
  • 18 percent of owners are individual females
  • 5 percent of owners are individual males
  • 5 percent of owners are non-couple partnerships
  • 79 percent of owners live on the premises

The average American bed and breakfast has an occupancy rate of 43.7 percent and an average daily rate of $150. One way to stay on top of B&B and lodging trends is to connect with industry associations like AIHP, the association of independent hospitality professionals.  Bed_and_Breakfast_Divider

Step 1: Questions to consider before committing:

Are you a people person?

This more than anything can be a deciding factor in whether your bed and breakfast venture is a pleasant dream-come-true experience or a daily grind which will wear you down in no time.

According to Kathleen Karamanos, being able to interact with your guests is a key aspect of the job. “You have to make sure you enjoy being in the service industry,” she says. “If you don’t genuinely enjoy meeting new people and finding out where they’re from and learning all about them, this is not the business for you.”

There is plenty of anecdotal evidence of bed and breakfast owners who mistakenly thought they could simply check their guests in and then not interact with them again until they checked out, as though they were running a conventional hotel or vacation rental. This approach is a recipe for failure in an industry that relies on word of mouth and social media recommendations.

Do you have a sufficient business background?

The bed and breakfast industry is a common haven for those looking to get out of the high-stress, corporate lifestyle. While there is no question that great relaxation and satisfaction can be found in the decorating, baking, and cooking that will fill your day, there is still a business element that cannot be neglected.

A successful bed and breakfast owner will need to know how to:

It is probably no coincidence that nearly three-quarters of all bed and breakfast establishments in the U.S. are owned by couples. Not only is the workload demanding for only one person, but often it requires two people with very different dominant skill sets. It is very common to see one person handle all the hospitality duties while the other focuses on the business responsibilities.

Are you looking to get rich quick?

There’s nothing wrong with wanting to make a huge amount of money quickly, but you will likely want to look for alternative business opportunities if this is the case. That said, running a bed and breakfast can be a profitable and sustainable business. Many couples use it as a way to provide steady income while maintaining a lifestyle they enjoy. However, it is not the type of business that will provide a huge cash infusion over a short period of time.

There may be special events (conventions, festivals, and so on) which will keep your bed and breakfast booked solid for a stretch of time, but in the long term, occupancy rates will ebb and flow depending on the season. It is practically unheard of for a B&B to be at maximum occupancy all year round. So while you can make a steady profit, you will not “get rich quick.”

Are you prepared to give up weekends and holidays to run your business?

If getting away during holidays and long weekends is important to you, it should not come as a surprise that running a B&B might not be the best business venture for your lifestyle. Your busiest times will be all those occasions when you would normally be enjoying a relaxing get-away yourself. Committing to running a B&B means making peace with the fact that you will be working when the rest of us are traveling and playing.
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Free bed and breakfast business plans

Step 2: Create a bed and breakfast business plan

Every new business can benefit from writing a business plan. You’ll definitely need one if you’re planning to seek funding in the form of a bank loan or investment (more on that in the next step). 

If you’ve never written a business plan before, check out our free library of hotel and bed and breakfast sample business plans. You can also download our free business plan template to help you get started. 

Don’t get bogged down in the process. If you don’t need to seek funding, write a Lean Business Plan instead, and use it as a tool to strategically manage your business as it gets up and running and starts to grow. 

Using a tool like LivePlan that has business dashboards that connect to your accounting solution built right in can help you stay on top of your finances and even model scenarios for growth. 

Like, what if you were able to exceed the industry average of less than 50% occupancy? What if you added a second location? What if you increased prices by 10% or hired someone to cook breakfast? Reviewing your financials regularly and especially understanding your cash flow can really help you when it’s time to make a major financial decision. 
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Step 3: Consider your startup financing

Many older couples sell their home or business in order to invest in a bed and breakfast which will serve as both their residence and primary source of income. If this is not an option for you, there are several funding options, including finding private investors, getting a small business loan from a bank, or finding other business support programs. How much money needed to get the project off the ground will depend on whether you are inheriting a ready-made B&B or converting a property into one.

If you are converting a residence into a bed and breakfast, a suggested rule of thumb is $20,000-$40,000 per guest room for a small property and $35,000 to $50,000 for a larger one. This factors in costs for remodeling to meet regulations as well as brand new bedding, towels, appliances, fixtures, and decorative effects for the room.

Always factor in maintenance costs, both preventative, and emergency. Even in the best-case scenario, you are still going to pay for regular upgrades and maintenance to the exterior, plumbing, and electrical. You’ll also have to be prepared for the worst-case risks when a plumbing pipe bursts or an entire section of the building needs rewiring. If these costs are not factored into the startup financing, you can find yourself in an operational bind before you know it.

Additional resources to help you fund your business:

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Step 4: Choose your location

While it is true that almost any private residence can be converted into a bed and breakfast, not every residence is well suited to being a B&B. To be successful and stand out amongst the competition, there should be something unique and attractive to the building you plan to use. Spend some time on choosing the best location before you buy your property

Many bed and breakfasts use a historic angle to draw guests. Often a Victorian home can give travelers a sense of what it would be like living in the area in the late 1800s. Others may use proximity to the waterfront or other notable features as a way to entice guests to stay there.

Kathleen Karamanos believes the convenient location of her bed and breakfast is a big selling point for her business. The Fundy Heights B&B is close to downtown as well as to the major highway, which brings travelers north from the New England States, Southeast to Nova Scotia and Prince Edward Island, and West to Montreal, Ottawa, and Toronto.

Other key factors to consider when choosing a location include:

Zoning and regulations:

You’ll want to study up on all local and state or provincial zoning by-laws. You may have the most beautiful, well-maintained vintage property that seems perfectly suited for bed and breakfast conversion, but if it is in a strictly residentially zoned neighborhood, it may be over before you begin.

Check to see if a business license can be granted for the property at your preferred location. Because a B&B is not an industrial operation, it should not be too difficult to get the necessary clearances, but you cannot take it for granted. Without the green light from the zoning commission, you will not be able to move forward.

Then, be sure to find out what other specific bed and breakfast regulations are in place in your jurisdiction. There was a time when it was common for multiple guest rooms to share a common bathroom. 

If this is the plan for your bed and breakfast, you would not be able to operate in the Province of New Brunswick, for example. Kathleen Karamanos is required to have a separate bathroom for each family unit who stays there. Half of the rooms have a private bathroom while the other half have stand-alone bathrooms assigned to each room. Make sure you are aware of all local regulations for running a bed and breakfast as they vary from jurisdiction to jurisdiction.

The right local economy:

Like any other part of the hospitality industry, staying at a bed and breakfast is really a luxury which is not available to everyone. It is crucially important that your B&B is located within a community that has a proven tourism track record and a local economy that can support it.

Don’t give yourself an unnecessarily tough row to hoe by opening up a bed and breakfast in an area that doesn’t have the tourist draw to support it.

Additional resources to help you choose a location:

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Step 5: Take care of permits, licenses, and certifications

You’ll need to make sure you have all of your business license and certifications in place. This goes well beyond simple zoning clearance and covers all the regulatory requirements in running this type of hospitality service.

One comprehensive checklist for all the business licensing and support requirements is as follows:

  • Conditional use and sign permits (if required)
  • Business license
  • Business name and/or DBA registration
  • Certificate of occupancy
  • Account for transient/lodging taxes
  • Sales tax account (seller’s permit)
  • Federal and State Tax ID
  • Business checking credit accounts
  • Merchant account (to process credit cards)
  • ServSafe food certification (if required)
  • Health Department inspection
  • Fire Department inspection
  • Liquor license, if applicable
  • Insurance (business, liability, property, and liquor liability if applicable)
  • Property management/reservation and accounting software

Step 6: Develop your marketing strategy

Very few industries are more reliant on word of mouth to attract new customers than a bed and breakfast.

It would seem the best way to get new guests through the door is to keep your current guests more than satisfied with their stay. Especially since the modern day “word of mouth” is a travel site review, where a bad review can be a permanent stain on the operation’s reputation.

Use email templates to help streamline your communications with guests and your staff to save you time and increase guest satisfaction. Keep your website up to date, and consider whether it makes sense to use listing platforms like Airbnb. And always follow up and ask for reviews 

Kathleen Karamanos launched a specific strategy to establish strong ties to the travel sites and local tourism boards. That strategy has since proven to be very successful.

“We received a certificate of excellence from Trip Advisor in 2015 and since I took over in 2014, I was able to raise our Canada Select (National accommodations rating program) score from a 4 to a 4.5,” she explains.

Kathleen believes you cannot overestimate the importance of travel advisory ratings in attracting guests. Despite being in a demographic known for their comparatively sparse use of technology, most of her guests find her bed and breakfast and make their first assessment online. But don’t panic if you get a bad review. It’s an opportunity to improve going forward. 

She also strongly recommends getting involved with local travel boards and groups, as indirect marketing of your establishment can be very effective in increasing your occupancy rate.

Typically, a B&Bs target market consists of the following:

  • Tourists
  • Business travelers
  • Couples on a romantic getaway
  • Locals in need of extra bedrooms

Start thinking of special promotions and offers that would appeal to each of the above segments.

For example, partnering with a local spa to offer a reduced rate on a couple’s massage to guests who stay at your bed and breakfast is a great way to attract more business and it is benefiting more than one local business. Find other win-win partnerships and it will go a long way to strengthening your B&B’s long-term prospects for success.

Additional resources to help you with your marketing:

Step 7: Hire your staff

Perhaps you are part of a couple looking to open up a bed and breakfast and you plan to divide the chores and responsibilities among yourselves. This is not at all uncommon. But before you decide to join their ranks, you should have a complete picture of precisely how labor intensive running a B&B can be.

Susan Poole is the owner of the award-winning 40 Bay Street Bed and Breakfast in Parry Sound, Ontario, and serves as a bed and breakfast coach for new and prospective owners.

She outlines the daily and hourly commitment to keep the place up and running this way:

  • Breakfast takes three hours from starting preparation to finishing the clean-up
  • Each bedroom and bathroom plus laundry take an hour
  • Ensuring that rooms are booked takes up a lot of time as well

All of this is on top of the other weekly chores that must be done, such as grocery and supply shopping. If you are not fully prepared to take on this workload yourself and be fresh to interact with your guests, you will want to bring in hired help.

Each owner will have to decide which responsibilities they want to take on themselves and which ones they want to delegate to employees. Kathleen Karamanos decided to take a culinary course in New York prior to taking over her B&B and believes it has made a huge difference in the quality of service she is able to provide to her guests.

Additional resources to help you with hiring:

Resources:

Below you’ll find a list of resources that can help you find out more about what you’ll need to do to start your successful bed and breakfast business venture.

Websites:

Free Bed and Breakfast Business Plans: The Bplans library of free sample business plans includes a section of four sample business plans exclusively for those interest in starting a bed and breakfast.

BedandBreakfast.com: Provides information for aspiring and experienced innkeepers, educational resources, and everything you need to create the best listing for your inn.

The American Bed and Breakfast Association: The American Bed and Breakfast Association is an organization dedicated to the promotion of bed breakfast inns nationwide.

InnSpiring.com: An active forum with some very experienced innkeepers and aspiring innkeepers who aren’t afraid to ask questions to help themselves get where they want to be. This site also contains recipes, resources, and articles.

Books:

“I’ve Always Wanted to Run a Bed & Breakfast”: The Secrets to Starting and Running a Successful B&B by Chris Bengivengo and Michelle Bengivengo

Starting & Running A B&B: A Practical Guide to Setting Up and Managing a Successful Bed & Breakfast Business by Stewart Whyte

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Tony SekulichTony Sekulich

Tony is a freelance writer and editor based out of Toronto, Canada. After writing for newspapers and magazines, Tony wrote for film and television where he was recognized with a Leo Award nomination for Best Screenwriting in an Animated Series for his work on the APTN animated series Animism: The Gods Lake. You can follow Tony on Twitter here: @TonySekulich



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How to Start a Farm, Your Complete Guide to Success

How to Start a Farm

Your day begins before the sun has even risen. You don your clothes and rain boots and set out into the crisp morning to feed the chickens and the cattle. It’s a clear morning and you feel good being outside, feeling frost crunch beneath your feet, watching the yard cat stretch and yawn lazily.

Already you’ve got a slew of tasks running through your head. Call the accountant about what to write off this year as a business expense. Check in with the neighbors about using that extra acre of land at the bottom of your property. Make sure to order a few more bags of chicken scratch. Fix the fence. Talk to the farm down the street about how they’re using their hilly, forested land to plan for a future logging operation.

It’s a lot, but it’s exciting that in between all the chores, there are so many opportunities for the future.

In this guide, I’m going to walk you through how to start a farm, as well as give you the resources to help you get started with a farming business today.

To supplement this guide, I interviewed two experienced farm hands: Gregory Heilerspreviously an assistant farm manager, and Dr. Cindy Jones, the owner of Colorado Aromatics, a small herb farm in Colorado.

What’s in this guide to starting a small farm?

  • The state of small farm business in the U.S.A.
  • Why do you want to start a small farm?
  • What to do if you’ve never farmed before
  • Step 1: Identify your niche
  • Step 2: Find the land
  • Step 3: Get financed
  • Step 4: Planning a farm for success
  • Step 5: Marketing your farm and products
  • Resources for future farm business owners

The state of small farm business in the U.S.A.:

In the U.S., small farms are considered the backbone of the agricultural industry, with 97 percent of all U.S. farms being family-owned.

In order to be considered a small farm, the USDA Economic Research Service states that you need to gross less than $350,000 per year.

There are almost two million small farms in the U.S., a data set that includes retirement farms, off-farm occupation farms, and farm-occupation farms. You can learn more about the small farm classification system from the USDA’s website, but so long as you’re within the $0-$350,000 bracket, you can guarantee your operation will be classified as a small farm business.

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Why do you want to start a small farming business?

Gregory Heilers has helped on two startup farms: his father’s 200-acre grass-fed beef and goat farm, which also includes an orchard, a berry patch, and a vegetable garden, with areas set aside for future logging; and on a seven-acre organically grown market garden in upstate New York.

Gregory believes that if you want to be successful, you should think about why you want to start your own farm before anything else. He says, ask yourself, “Is it for profit? A hobby? An altruistic contribution to society and/or animal welfare? Environmental stewardship?”

This is because your motivation for starting a farming business is the thing that will directly impact your strategy.

You will need to answer these questions, and questions like them as honestly as possible so that you know what direction to go in. You may find that what you’re really hoping to start is a hobby farm that you can run as a side-business. If this is the case, beware that the tax implications for hobby farms are quite different that for business farms.

If you want to know whether or not you have what it takes to be a farmer, give this quiz a try. It was created by Taylor Reid, the founder of Beginning Farmers.

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Where to start if you’ve never farmed before:

If you didn’t grow up on a farm and haven’t worked on one, you may be wondering how on earth you’re going to make your dream a reality. This is a very real concern. The reality may prompt you to consider another line of work because farming is hard, and farming as a business is doubly so!

Get some real-world experience

For many modern-day farmers, especially those running large commercial farms in the Midwest, skills have been passed from generation to generation.

This isn’t the same for small startup farms. These farmers have had to acquire their skills in order to learn how to start farming, and they’ve either done so by apprenticing with other farmers, going to farm school, or doing some intense self-directed study (see the resources section at the end of this article).

According to Gregory Heilers, it’s essential to get that hands-on training. “While some claim you can learn how to be a farmer through YouTube videos or books (and those can be excellent tools), it’s very important to get some hands-on training. If you haven’t grown up around farms, you’ll want to buddy up to someone who knows what they are doing.”

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Gregory Heilers on one of the farm’s tractors.

Agricultural jobs are among the most dangerous in the world, so it’s no surprise that Gregory makes such a strong recommendation to learn from people who can teach you what you need to know, and share stories from their past, to bring the sometimes surprising dangers of working on a farm to life.

Gregory says, “Farm work can be extremely dangerous, so it would be great to hear some scary stories from an old timer (or, at least, someone who’s been around a bit) to let you learn from others’ mistakes and knock some sense into you before you find yourself in a potentially fatal situation.” If you need a very real scare to bring you to your senses, read this chilling article from Modern Farmer.

Aside from the dangers, there is a lot to learn about how to start a farm and how to start farming, not the least of which is how to balance the books and come out ahead! Of course, as with any profession, be careful who you choose as your mentor as there are both competent and incompetent farmers. Use the list of resources at the end of this article to help you find ways to get experience before you start your own venture.

If you are willing to put in the time, and learn the necessary farming and business skills to become the profitable small business farmer you know you could be, there’s good news. It’s doable!

Learn to farm as you go

Dr. Cindy Jones is a trained biochemist and herbalist. About eight years ago, she and her husband decided to start a small herb farm in their home state of Colorado.

Although Cindy had never farmed before, she had been an active gardener, growing the herbs she needed for her skin care product business, in her own large garden.

Starting a small herb farm seemed like a natural next step, even without any of the farming experience. “We came into farming with no background other than gardening and learned that farming is much different. We have learned a lot just from doing, networking, and talking to other farmers. We do a farmers market each Saturday during the summer so have met other farmers that way,” Cindy says.

Cindy Jones on the Colorado Aromatics Farm

Cindy Jones on the farm, pictured left with calendula, and right with lavender.

There are of course other ways to fast track your learning, and Cindy is no stranger to setting aside reading time in order to better her business. “Recently, there have been a few books published that have been helpful, both ‘Woman Powered Farm by Audrey Levatino and ‘The Organic Medicinal Herb Farmer‘ by Jeff Carpenter and Melanie Carpenter.”

Of course, not everything—including learning how to start a farm—can be learned from a book. Building good relationships and networking also go a long way to helping you pick up relevant skills, especially in the early days.

“Much of what I have learned has been from fellow lavender growers who are quick to share what works and doesn’t work for them. The United States Lavender Growers Association was founded specifically to help growers. I am one of the founding members of this group and we have many opportunities for sharing and learning through USLGA. Each year we extend our growing area slightly and each year we learn more about what we are doing. Someday we’ll get it right!” With a thriving business that relies on the farm’s produce, there’s no doubt Cindy’s already done just that.

Decide whether you’re starting a business or a hobby farm

If DIYing your farm learning experience is something you’re more interested in, hobby farming could be a better fit for you, and there’s nothing wrong with that. Hobby farming gives you the opportunity to experiment on a micro scale first.

For example, before you plant an acre worth of vegetables, plant a much smaller patch, and take the time to address and learn from problems as they arise. After a while, you’ll have developed the skills you need in order to expand. The University of Vermont Extension has a whole lot more to say about hobby farming versus running a farm as a business. If you’re interested in the topic, read their hobby farming business fact sheet.

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Step 1: Identify your niche

Even if you know exactly what type of farm you want to start, diving head first into just doing it is never a good idea.

Say you start the passion fruit farm you’ve been dreaming of for years in your home state in Florida. What if, as you’re getting ready to harvest your first batch, you then find out that all the demand for passion fruit is centered in Southern California, and not in Miami like you thought? Even if you do somehow manage to find affordable transport to get your goods to California, what if you then learn that locally-grown passion fruit is all the rage?

Within just one yield, you’re out of business and all because you didn’t know where your target market was located, or what their values were. If you’d taken the time to do your market research, you would have learned there was no demand for passion fruit in Florida. You would then have been able to choose to grow another product that was in demand, or start your farm somewhere else. Either way, you would have saved yourself a lot of trouble.

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Don’t skip the market research phase

Learning to do market research is that step you really can’t skip, because while it certainly helps if you know what you want to grow, you’re still going to need to know who is going to buy your products, where you’re going to sell them, and how you’re going to do this, all while taking competitors into consideration.

Even if you know nothing about formal market research practices, you can do your own research by getting out to learn more about your customers, distribution channels, and about how to start a farm.

If you are already interested in a particular product, learn more about your local market. Check out farmers’ markets, meet other local producers, speak to customers as you shop. Better yet, survey farmers’ markets to see if any crops or products are under-represented.

Additionally, consult your local extension. Extension services provide localized resources for most aspects of gardening and small farming. For example, Oregon State University Extension has a “Small Farms” portal where you can find out more about crops, grains, soil, livestock, and much more.

The best part of these portals is their local bent. If you’re based in Oregon and want to know more about growing blackberries, you couldn’t find a better resource. Many University extensions also publish reports specific to different farm products. These reports might include estimates for production costs and returns, like this one on the University of Maryland Extension Portal.

free agriculture and farm sample business plans
As part of the research process, it is also highly recommended that you turn to your local state department of agriculture. Not only will they be able to provide you with the latest information on farming in your state, but they will also be able to help you figure out what licenses you need to register for, and give you local information on food safety, pesticides, market access and much more.

If you still have trouble choosing an enterprise, here’s a guide on how to pick a how to pick a high-value crop, including detailed advice on how to evaluate your resources and personal considerations. If you’re willing to spend a bit of money, the Profitable Plants Digest has some niche-specific guides.

Keep an eye on emerging market trends as well. States that have legalized cannabis and hemp production have shown promise for small farmers in recent years, for example.

If you’d still like to know more about formal market research processes, you can read this complete guide.

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Step 2: Find the right land

Once you’ve figured out what you’re going to farm, you’re going to need to decide whether to buy land or lease it.

If you buy land, you’ll have complete control over its use, but you will also assume financial risk for the success of your enterprise. This is one of the major reasons leasing land is a popular option for many new farmers. It minimizes financial risk and requires reduced capital at the outset.

If you’re interested in leasing farmland, consider finding people who own land, but who aren’t doing anything with it. Many landowners with arable land aren’t using it for farming but could benefit from it either in the form of tax credits associated with the agricultural use or in order to raise property value. If this model interests you, read “No-Risk Ranching” by Greg Judy.

If you can’t find anyone to lease your land, there are still a few options open to you, including incubator farmingrooftop farming, and SPIN farming.

Buying your own land

Buying a farm, or farmland, isn’t for everyone learning how to start a farm, but if you feel like it’s the best option for you, there are some handy ways to figure out where to start your search. Ann Larkin Hanse, writing for Mother Earth News, suggests you narrow your search area by considering only those areas that have off-farm employment options (or markets for your farm products and necessary farm support services).

“It’s helpful to get an old-fashioned paper road map and draw two circles: one with the off-farm job in the center and a radius as long as the distance you are willing to commute, the other with your customer base in the middle and a radius as long as the distance you’re willing to travel to market,” says Ann. “Where the circles overlap is where you should look for land.”

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Illustration by Elayne Sears, image via Mother Earth News

Things to consider when looking for land

Before you find the right people to help you buy land, it’s worth familiarizing yourself with the things you’ll need to consider as you browse. At the very least this will include:

Your proximity to markets: Consider where you’re going to sell your products, or how you’re going to reach sales channels. If they’re hundreds of miles away, you’re going to struggle much more getting to market. Often it’s easiest to start local and go from there. You will likely already have completed your market research by now and should have a pretty good idea of where your market is located. Use the above diagram to help you determine the “right” area to start your land search.

Access to water: It’s important to make sure you have a steady supply of water, so be sure to ask plenty of questions and consider all of your options. How will you provide water for the plants, animals, and processing needs of your business?

If the land you are purchasing has a well, it is always good to obtain information about the well, such as type, depth, output, and age. You may also want a water quality report.

If the property is connected to a municipal water supply, knowing the price of the service can also help you determine the feasibility of a particular enterprise. If you have to pay per gallon or cubic foot, you might reconsider trout farming and try a camel dairy instead.

Soil quality: As with water, high-quality soil is a must for most farmers. Ask the current owner for soil test results. Soil tests are often available through the local extension service and sellers should expect to provide test results.

Soil testing can be an important predictor of production capacity and expenses. Accurate predictions of fertilizer needs for specific crops can be made based on the test results, which breaks down to an actual dollar value when growing. For livestock, different soil can even impact growth and health, sometimes requiring supplementation.

Facilities and Infrastructure: Depending on the type of farm you want, you may also need different outbuildings. A produce stand or farm shop might require an up-front investment. What about your livestock? Does the land include shelters for the animals you plan to raise? What about processing facilities? Different crops and animal products will require different processing and storage facilities.

Make sure to also think about things that aren’t directly related to the property. What sort of transportation and roads are available to and from the area you’re farming? While you’ll want a balance of easy access and proximity to your sales markets, keep in mind that busy roads can have an impact on livestock, soil, and water quality.

Neighbors: These can be a great resource, or a great hindrance, depending. Do they produce farm goods? What are their production practices? Are they compatible with yours? If you plan on starting an organic vegetable farm, but your neighbors spray their Christmas tree plantation with harsh pesticides and herbicides several times a year, it could dramatically impact your success.

Operating a successful farming operation will happen a lot more easily if you have a good relationship with your neighbors. Farm manager Greg Heilers says, “Meet your neighbors. Offer to help your neighbors. Be a good neighbor. Farming used to be so much more about community. It is so much easier to be successful as a farmer if you have even the slightest bit of support from your community.

“For example, if you’re a beef cattle farmer, when a calf or cow or bull breaks loose and enters a neighbor’s field, do you want them to a.) keep your animal and never come asking to see if you had an animal get loose, b.) sell it off immediately and keep the truth from you, c.) come knocking and ask if you have any cattle or d.) recognize your cattle instantly and drive ’em back to your place for you?”

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In this same vein, make sure that any property you are looking at has good fences. Installing your own will likely cost a lot, and if you think you can do without good fences, remember that it may well impact the relationship you have with your neighbors. They say “good fences make good neighbors,” so find a place that has them and you won’t risk upsetting the neighbors if your cattle or goats escape onto their luscious looking bean patch.

You may even be able to cultivate a relationship with your neighbors that goes beyond just agreeing to perimeter fencing. In a best-case scenario, you might find that your farms’ outputs (especially those that are not your primary value-added product, such as manure), can be valuable inputs on your neighbor’s farm, or vice-versa.

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Step 3: Getting financed

If—like most small farmers—you haven’t inherited a farm, finding the money to learn how to start a farm, and to turn your dream into a reality is going to be a core part of your go-to-market strategy.

Research your funding options

Cornell University’s guide to planning and funding your farm business is a good place to begin. It will walk you through different financing options, including self-financing options. What it won’t do is recommend you take out a credit card loan. In fact, this guide specifically suggests this is the one thing you don’t do, as you’ll be best served to invest any profits straight back into the farm, and if you don’t pay the loan back fast enough, your interest rate will spiral out of control.

Bplans also offers a comprehensive guide to funding a new business to help you think through your options.

That said, make sure to be realistic when you initially apply for funding. If you can avoid buying expensive equipment at the start, do it. Cindy Jones, the owner of Colorado Aromatics, and a small herb farm in Colorado says, “Starting a small farm is a lot of physical work and there is little equipment available to help growers on a small scale so much of the work is by hand […] We finally invested in a small tractor this year to help with tilling, ditching, and post hole digging, so some of our early plantings of perennials such as lavender are not spaced properly for a tractor.”

Once your business takes off, you can buy the things that will make life easier. And even if you don’t have a lot of cash on hand at this later date, a bank will be more likely to give you a loan if they can see you are running a profitable operation.

Write a business plan

For anyone seeking a loan, writing a business plan is going to be essential. This isn’t any different for an aspiring farm owner. Even if you’re not seeking  a loan, a business plan is a useful tool to help you figure out which of your ideas are feasible, and to remind you of your goals. You can find out more about writing a business plan on our Business Planning Guide page. If validating your business ideas interests you more than funding at this stage, you might prefer to opt for a Lean Plan—or a shorter, more nimble planning process.
Free business plan template

Look at sample farm and agriculture business plans

Not quite sure how to format your farming business plan? Take a look through our library of free farm-specific sample business plans, including a fruit farm business plan, a botanical perennials business plan, a feed and farm supply plan, a hydroponics business plan, and more!

Obviously, before you sit down to write your business plan, you’ll need to determine your cost of productionYou’ll also need to know how much your rent/lease will cost you.

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Step 4: Market and sell your products

There are many different ways to market your farm products. While farmers’ markets are probably the most obvious example that comes to mind, there are a number of other channels you can use to market and sell your products.

If you have enough traffic nearby, you might find that a produce stand or farm shop right on your own property is a good option.

Another trending model is to sell your products through a CSA (which simply stands for “Community Support Agriculture”), in which patrons purchase a “share” of the season’s yield for a set price in exchange for regular deliveries of the products as they are ready. This model is especially popular because you receive payment at the beginning of the season, which can help reverse the notorious cash-flow issues faced by most farm businesses.

You could even find a local growers’ cooperative that allows you to team up with other producers to sell your products under a united brand.

Finally, even though the age of the supermarket has made retail sales of farm goods more difficult, there are still plenty of small, local health and natural food stores with whom you could partner, with the advantage of their often fiercely loyal customer bases.

Start by putting together a marketing plan. If you’re creating a business plan you’ll work on your marketing plan as part of that process.

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Learning resources:

Use the resources below to find out where you can learn more about how to start a farm, farming, and where you can gain some hands-on experience.

Websites

ATTRA: Attra has a great database of internships and apprenticeships for aspiring farmers. Usually, room and board are offered in addition to a small stipend. The best part of the site is the ability to search by state. That said, there are so many internships and apprenticeship programs around the U.S.A., that if you’re looking for something more niche, you can check out this list of websites that offer a variety of working opportunities.

Helpx.net: On this site, you can find a variety of small farms, rural B&Bs, and so on, where you can work in exchange for room and board (no cash stipend) and learn the ropes of your intended trade through informal and formal internships/apprenticeships. This is a global site.

WWOOF: WWOOF is a pay-per-country list directory of organic farms around the world. Again, room and board are included, but usually no cash stipend. Work through WWOOF is usually considered an informal or semi-formal internship.

The Cornell Small Farms Program: If you’re looking for enterprise-specific books, fact sheets, and articles on farming, this is a great place to start, especially if your starting point is bulking up on as much knowledge as possible.

The 20 Best College Farms: If you’re interested in finding a college where you can get hands-on experience and a modern farming education, Best College Reviews has a list of places you might want to start looking. These top 20 colleges were selected based on a number of criteria, including farm size, integration with the main campus, sustainability, courses taught at the farm, students using the farm, and integration with the community.

Other resources

Publishing houses: While Amazon does stock a handful of good books on starting a farm business, you’ll find that your particular niche might not be included. If this is the case, there are other options, including going straight to publishing house websites. The Northeast Beginning Farmers Project recommends browsing Acres U.S.A.Chelsea Green Publishing, and Storey Publishing.

Farming magazines: There are also a number of farming magazines you can subscribe to. This is a good way to stay on top of the latest farming buzz, as well as to find out more about farming techniques and hacks, equipment, and best practices. Some popular magazines include Growing for MarketAcres U.S.A (they put on a great conference each year as well), Grazethe Stockman Grass Farmer, and the PackerThis is by no means a comprehensive list, so make sure to do your own research as well, perhaps in relation to your particular niche.

Online communities: There are also a number of great online communities that can help you get started, or where you can simply ask questions and get answers, directly from people in-the-know, or who like you are dabbling. Permies is now the largest permaculture site on the internet, and a great resource for all manner of interests, from homesteading through raising animals. Although based in the U.K., the Farming Forum has a lot of really great conversation around topics like weather, livestock and foraging, machinery and much more. The slightly messier U.S. equivalent of this site is Agriculture.com’s community forumFarm Chat is another good forum for anyone interested in commercial farming.

Free Farm and Food Production Sample Business Plans: The 14 sample business plans in this section should give you an excellent sense of how to write your own small farm business plan.
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Next steps

In the wise words of Gregory Heilers, “There is always something else to do. You’ll run yourself ragged trying to get it all done. Take some time to stop and smell the manure, err…flowers. […] you can get more done in six days out of seven than you can working seven days a week. Prioritize, organize, and build efficient systems.”

If you’ve started a farm or are in the process of learning how to start a farm business, we’d love to hear from you. What are your experiences? What challenges have you had? What has worked out really well? Are we missing any invaluable resources? Let us know on Twitter @Bplans!

Editor’s note: This article originally published in 2016. It was updated in 2019.

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Why There’s Never Been a Better Time to Become a Consultant (and 15 Insights for Success)

starting a consulting business

The gig economy is in full swing, and it has forever changed the work world as we know it. For various reasons, people are leaving their traditional 9-to-5 jobs and working in more agile roles instead—even starting their own businesses.

Sometimes this is by choice; sometimes it’s not. Either way, the massive shift away from the full-time employment model and toward contract, freelance, and other non-traditional arrangements has made it easier for those who prefer a more flexible, self-directed work life.

In other words, there’s never been a better time to start a consulting business. It’s the new normal. And as the workplace continues to change, more and more companies will be on the lookout for talented consultants.

Many businesses turn to consultants because they just can’t do everything in-house anymore. In our fast-paced world, companies lack the specialized skills and expertise to handle their growing needs, and they often don’t have the staffing flexibility to complete special projects that require more manpower.

Further, they may benefit from fresh new ideas, outside opinions, and the speed and efficiency of bringing in an expert. Consultants solve all these problems and more. No wonder consulting is a $250+ billion industry, and still growing.

Making the decision to become a consultant is easy. The tricky part is knowing how to become a successful consultant. It isn’t the right choice for everyone. Yes, being a consultant can be incredibly rewarding and lucrative, but there are many drawbacks as well. Here are a few tips and insights to help you understand what you’re getting into and to make sure you get started on the right foot.

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1. Don’t buy into industry myths

You’ve probably heard the following about consulting: You’ll make tons of money for less work. You’ll have plenty of leisure time. You can say goodbye to office politics!

It’s time for a reality check. You’ll likely be working more than you work now; taxes, business expenses, and benefits will quickly eat into your higher pay rate; and, as a contractor or sole proprietor, you will find yourself answering not just to one boss, but to many.

2. Know that your expertise alone won’t make you successful

Your area of expertise will take you far, but it can’t prepare you for the unique challenges of being an entrepreneur.

You will still need to learn how to behave on a sales call, how to market your business, how to do your taxes, how to write a business plan, how to network. Be ready to jump in and learn new skills.

3. Make your business plan first thing

There is a lot of planning you must do up front before you set out on your own. Don’t even think about becoming a consultant without writing a business plan, a marketing plan, and a financial plan. These are essential and will pay off for you once you are working for yourself.

Not sure where to start? Check out Bplans’ library of sample consulting business plans to help you get started.

4. Test the waters before quitting your day job

If you’re unsure about becoming a full-time consultant, give it a trial run by doing it part-time while working at your current job. (Always get your employer’s permission before doing this.) Take on a few small projects to do on weekends or during vacation time.

5. Don’t lowball yourself on price

You may be tempted to set a low rate when you’re first starting out. This is usually a mistake. It’s important to set your fees high enough that they generate a comfortable salary that also covers your various business expenses.

One method for figuring out this number is what I call “Elaine’s 3X Rule.” For example: In order to earn a salary of $100,000, you need to bill $300,000 each year.  

6. Also, don’t lower your rate once you’ve quoted it (this is unethical)

For instance, if you say that your rate for a project is $15,000, and the client has only $10,000 in the budget, then you should walk away.

Agreeing to work for the lesser amount is a surefire way to ruin your reputation. Why did you ask for $15,000 if you can do it for $10,000? This makes clients question whether you had $5,000 worth of fat in the proposal.

7. A great accountant can make your transition easier

Find an expert accountant to advise you as you grow your consulting business. A good accountant can offer advice and help you make smart decisions regarding the structure of your business, your plans for growth, profitability, and accounting procedures.

8. Focus on reeling in large businesses

Don’t waste your time seeking out lots of small accounts. Instead, go for the medium and large businesses. They are used to hiring trainers and consultants and may be more willing to give a new consultant a try. Plus, their larger budgets mean they will be more likely to bring you in for repeat business.

9. Have a plan to combat isolation

Working alone creates a sense of isolation. Make a game plan to alleviate your loneliness. Set up frequent lunch dates with former colleagues and friends. Meet up with other consultants and attend industry events; even if the talk does turn to business, you will appreciate having some social time.

10. Keep a file full of raves

Clients who love your work will be more than willing to sing your praises, so start collecting those testimonials now. Place them in a file, along with any notes thanking you for a job well done. These will come in handy for prospecting letters, proposals, and brochure copy.

11. Find creative and cheap marketing strategies

Don’t be afraid to get creative and thrifty in order to bring in business. There’s no limit to inexpensive marketing tactics.

Start a blog. Agree to be interviewed on a podcast. Send a lumpy envelope for a holiday: a gourd for Thanksgiving or candy hearts for Valentine’s Day. Submit articles to your professional journal.

12. Maximize your clients’ ROI

Your goal should not be to make clients dependent on you. Instead, ensure they receive the maximum return on their investment by enabling them to sustain the changes you have helped them make. Before you leave, make sure your client owns the solutions. Achieving this is the best way to be hired again.

13. Do everything you can to generate repeat business

Did you know that it takes 7 to 10 times the investment to sell your services to new clients? That’s why earning repeat business is a smart goal. Try to bill 50 to 75 percent of your annual revenue from repeat clients. This helps you avoid having to constantly hustle to find new clients.  

14. Be optimistic, but plan for the worst

When you believe in your success, your clients are more likely to believe in you as well. Yet while you should keep a positive attitude and act as if you’re living the best-case scenario with your clients, never spend your money until it’s actually in your hands! This rule will help you avoid financial trouble when you’re just starting out.

15. Put your clients first, always

Remember that you are only as good as your last client says you are. This is why it’s important to put your clients ahead of everything, even your profitability. Projects end, but your client relationship will not. If you make a pricing mistake, you will learn from it and not make it again. Even if a project goes into the red, it is a small price to pay to maintain a great reputation for life. Don’t compromise, and your clients will reward you with repeat work and great word of mouth.

Yes, starting out on your own can feel frightening. But don’t let the fear of the unknown hold you back from reaching your career potential. Take a page from other consultants who have found their new place in the gig economy and find out what you are capable of. You will be rewarded with an exciting new career you love.

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Elaine Biech

Elaine Biech is the author of The New Business of Consulting: The Basics and Beyond. She is a dedicated lifelong learner who believes that excellence isn’t optional. As a consultant, trainer, and president of ebb associates for more than 35 years, she helps global organizations to work through large-scale change and leaders to maximize their effectiveness.

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Are You Ready to Run Your Own Gym or Fitness Center?

start a gym or fitness center

Like exercise itself, running a gym or fitness center requires physical, mental, and emotional stamina.

There’s no question that entrepreneurship in this competitive industry can be daunting. It might even seem downright impossible at times. But, for those that tough it out, put in the work, and embrace the grind, starting and running a fitness center can be both personally and professionally fulfilling—and it can be a profitable venture as well.

If you’re thinking of becoming a gym owner, there really isn’t a bad time to do so. Whether it’s the motivation of swimsuit season looming, or the determination of New Year’s resolutions, getting in shape never goes out of style, and therefore, you’ll always have potential customers.

Still, your gym needs to stand out from the competition to keep existing members interested and new ones coming in. Properly run, your fitness center can be lucrative year-round. Few industries possess the baked-in, annual resurgence of gyms, so you can almost always strike while the iron (pumping) is hot.

Whether you choose to build your gym from the ground up, or buy an existing fitness center and make it your own, there are key things you’ll need to do in order to be successful. It’s not enough to simply fill your gym with the newest equipment. You need to consider who will likely patronize your fitness center to determine how to best target and serve those people.

Consider the following success factors and discover how you can align your business strategies with a target demographic.

Success factors

According to Forbes, the U.S. fitness industry is valued at more than $30 billion, and it’s set to grow 3 to 4 percent over the next decade. Thanks to this steady expansion rate, there is plenty of room for new business owners. But what sets a good gym apart from a great gym?

Factors that will influence the success of your gym include:

Choosing the right location

People want a gym that’s easily accessible. Committing to exercise is hard, and distance just might be the excuse some people need to prolong a sedentary lifestyle. Gym proximity is a key success factor, and choosing a conveniently-located fitness center can help make a regular exercise routine less intimidating, especially for newcomers.

Consider this when deciding where to break ground, or when shopping for existing facilities for sale. If a gym is for sale in a more suburban or remote area, make sure that its past history shows that it is well trafficked.

Buying equipment and scheduling classes

Anyone who has been in the industry long enough (or who has visited enough gyms) knows that not all fitness centers are the same. Even a franchise gym can be unique based on the owner and staff putting their own stamp on it. Remember that what you offer sets you apart and defines your business.

In fact, one study found that boutique fitness centers have a significant competitive edge in today’s fitness renaissance.

As you look to differentiate yourself from your competitors, think about these questions:

  • Do you have free weights?
  • Will you offer yoga or other group classes?
  • Is there enough equipment to accommodate everyone?
  • Can you staff your facility with enough trainers to give your members the level of personalized attention they require?

These are just some of the factors that can set your gym apart from the competition. Consider what “type” of gym you want to operate, and outfit your facility accordingly.

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Setting standards for customer service

Let’s be honest: Going to the gym can be intimidating.

The vast majority of your clientele will walk through your door with uncertainty, and it’s your job to make nervous visitors feel welcome. A clean facility, a welcoming environment, and a reliable support staff can all boost client satisfaction and help your gym stand out among the competition.

Most loyal gym-goers (you know the ones—always posting on social media about their great workout or their awesome “gym family”) remain so because they feel at home.

Identifying your target market demographic

Your gym is nothing without its members. The people who choose to pay a monthly membership fee are the lifeblood of your fitness center. By getting to know your target market demographic, you’ll be better able to recognize what your clientele values and cater to their sensibilities. As a prospective gym owner, identifying your target demographic should be a top priority.

Will your fitness center target casual gym-goers or the bodybuilding community? Can you expect a large contingency of young clients, or will your patrons be mostly middle-aged professionals? These are the questions to ask yourself. And once you answer them, then let your target demographic guide your marketing and branding efforts.

A study from the Physical Activity Council found that millennials are the most active generation overall and baby boomers are the least active. This should come as no big surprise, considering young people’s reputation for health trends, activity, and healthy eating. If your location calls for it, consider catering to a younger generation. This might mean tailoring fitness classes to that demographic, or revamping your interior style for a trendy look, and exploring alternative communication methods like a mobile app.

But, don’t put all your eggs in the millennial basket—they might not be the golden goose for your particular location. Consider local census data to help identify which age group lives in the area. If, for example, you plan to operate in the suburbs, you might be better off targeting professionals, homemakers, and families. This could include offering in-gym childcare.

No matter who your demographic includes, one fact remains: people want to feel comfortable when they go to the gym and to feel satisfied that what is being offered is worth the price of admission (aka membership). This means that the secret to running a gym is really no big secret—run the gym that you and your own friends and family would want to visit.

Are you fit to run a fitness center? If, after considering the above points, your enterprising spirit remains pumped up, there’s a good chance you have what it takes to own a gym.

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Bruce Hakutizwi

Bruce is the U.S. and International Business Manager for Dynamis Ltd., the parent company of us.BusinessesforSale.com, one of the largest online global marketplaces for buying and selling small-to-medium-size businesses. He is focused on helping small businesses succeed and regularly writes about entrepreneurship and small business management.



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