For the last two months I have awakened in the morning without an alarm clock for the first time in as long as I can remember. It was glorious.
I was also unemployed.
I lost my job back in March and found myself with LOTS of spare time. When I first found out I was being let go, naturally I was upset, but while the reason for my departure was being discussed by my employers, a voice popped in my head and asked:
“Are they doing you a favor?”
Shortly before everything went down I had began the process of starting my own business. I was researching the costs associated with being a startup, and what licenses and registrations were necessary. But I had done this before plenty of times. For one reason or another I never got past the dreaming stage. Maybe it was lack of confidence, or maybe it was fear. Whatever it was it had prevented me from answering the big question I have always had for myself: can I really do it on my own?
I’m still in the early part of this journey, but I have learned a few things about being an entrepreneur. Here is a list of my thoughts:
Many entities make a lot of money off of your fears.
When I was starting the process of forming my company and deciding what the legal form of my company would be (like deciding if I will be a sole-proprietor or a LLC) I did what every curious person would do… I Googled it.
What’s interesting is that in trying to find information, what will actually be presented to you are ads disguised as information. In my search I found an entry for a popular site that helps prepare legal documents. I went through the process of entering the information necessary to file as an LLC in Ohio and felt that it was pretty easy. But that ease and convenience comes at a price. The site wanted to charge me $399 to file. It’s easy to see how a person with limited income would just stop dead in their tracks and quite possibly give up altogether.
Out of curiosity I checked the Secretary of State website (www.ohiosos.gov) and after digging around I saw that I could file online in Ohio for only $99. With more research I found that I could get a reseller’s certificate in Ohio for only $25. Lastly, registering for a business tax ID (www.tax.ohio.gov) is free. Filing for a FEIN is the first thing you should do because you want your legal structure and sellers certificate under the FEIN, not your social security number. Trust me, you’re going to love the advice come tax time. Just like that, at the end of one day, I had formed my legal business identity for roughly $130.
How should I sell?
In the good ole days (like, 2019…before Covid-19) an entrepreneur might be inclined to figure out how to open a physical store. That takes more money than a lot of us have at our disposal. Coronavirus has changed the game quite a bit. It’s no longer feasible to think that opening a brick-and-mortar store is the way to go in starting a business. The most affordable way to go is building a store online.
Hold on, calm down! I know you don’t know the first thing about developing websites! Guess what? I don’t either, but I have one. How, you ask?
There are online companies that already have website templates built for you. You just have to spend time on the finer details like pictures, product, and prices. Such platforms include Shopify, Bigcommerce, and Woocommerce. Don’t want to be bothered with websites? You always have Amazon and Ebay to use as a sales platform and/or channel. Instructions on how to play around with these platforms can be found on YouTube (did I mention YouTube is your best friend in this process?). Amazon and Ebay don’t usually charge anything unless you actually sell something. Shopify, Bigcommerce, and Woocommerce charge a monthly fee of about $30 to start a basic online storefront. They offer tools for marketing to your potential customers as well.
Now, WHAT should I sell?
Notice how this question is third on the list? That’s on purpose. In the past I would focus so much on what I wanted to sell that I would suffer from paralysis by analysis and never get started. It’s easy to get too caught up in your ideas. You have to be flexible in your goals and direction. Once I had my legal structure (Limited Liability Company) and my online sales platform (Shopify), it became easier to narrow down what I wanted to offer. Remember: with a store you’re only trying to sell items for more than what you paid for it. If you buy a piece of candy for five cents and then sell it for ten cents to multiple customers, you have a business.
Believe it or not I narrowed down my choices to either selling pet supplies or computers online. Those were my choices because I figured either people needed a convenient way of caring for their pets during Covid-19, or many people would have to work from home during Covid-19. Either way, I wanted to solve a problem. After some deliberation I decided on selling computers because that’s where my comfort level is. For years I worked in some kind of consumer electronics environment.
Good businesses either solve a problem or create a sense that there is a problem that they can solve. Keep your product to something simple. If you can sell shredded cheese for a profit, then sell the best dern shredded cheese you can find. The only thing that matters is that profit margin.
Hopefully this advice gets you off to a good start. It took me many, many hours to gain this experience and it would be a real shame if I kept it to myself. My plan is to chronicle my journey of growing Compvana, my online computer store. I’m off to a good start, but I have to focus on how I can improve every day. I also plan on asking business experts around the city how to grow a successful business and sharing that information with you, the audience. In the next article I will talk about how I found the products to sell.
Many of you have million-dollar ideas and now is the time to go out and make that first buck. Lets make money together!
Shawn Philpot is an East Cleveland native. He works as a IT Professional as well as the Owner and Operator of Compvana.com.