When I started my tiny business in August 2014, I admittedly didn’t know what I was doing. My degree is in journalism with a business minor, but I hadn’t used that business minor for years and had forgotten buckets of what I had learned at college.
Fortunately, I’m a millennial. And millennials know how to use Google. I was also able to ask one of my friends, an accountant, some bookkeeping and limited tax questions. And a friend of my parents who had an eBay store was also helpful in the beginning.
When I was getting started, I had to set some parameters for my tiny business.
Parameter #1: No debt.
For several years after college, I had worked freaking hard to pay down my student loan and credit cards. At the time I lost my editor job in late 2013, I had no credit card debt and I didn’t want to get into more unless I had a good reason (more on that in a future post). I had excellent credit (still do), but I didn’t want to take out any business loans because, again, I didn’t want more debt and I just didn’t want to go through the hassle of applying for a loan.
Since I didn’t want to go into debt to start my tiny business, it made coming up with the other parameters pretty simple.
Parameter #2: No massive overhead.
Investopedia defines overhead as:
An accounting term that refers to all ongoing business expenses not including or related to direct labor, direct materials or third-party expenses that are billed directly to customers. Overhead must be paid for on an ongoing basis, regardless of whether a company is doing a high or low volume of business. (source)
Basically, stuff like rent, utilities, and Internet connection are considered overhead. Since I didn’t want to go into debt, that meant I had to work with what I had at the time—an extra room in my parents’ house and Internet access.
Parameter #3: No massive investment.
I had $200 to start at the time, so I wasn’t in a position to go out and make massive investments into equipment and whatnot.
Parameter #4: No marketing.
Once upon a time, I moonlighted as an independent fiction author. And I learned that a) I’m a sucky storyteller and b) I’m a sucky bookseller. And I suppose a lot of that had to do with the fact that I was awful about marketing and using social media to garner an audience and establish a platform. So when I started selling jeans, I knew that I didn’t want to invest anything (especially time) into marketing.
So those were the four parameters that I began with. In retrospect, these look really restrictive and not really risky. But again—I didn’t know what I was doing. And somehow, it worked out. I’ve relaxed a bit on Parameter #1 (again, more on why in a future post). But at present, I still operate my tiny business under the other three pretty well.
What tiny or small business parameters did you (or would you) start with?