The One Thing You Need to Start a Small Business

What’s the one thing you need to start a small business? It may not be what you think.

Most people think that thing is money, and since most people don’t have a pile of money laying around, they begin researching how to get a small business loan. Do a little research on getting small business loan, and you’ll discover that you need a business plan.

Starting down the wrong path

That starts you down the wrong path, because writing a business plan is no quick thing. It’s a many-page document that explains how you intend to make money. Who your customers will be, how you’ll market and sell to them, how much you’ll sell your product or services for, what your experience in the area is, who will be working with you and what their relevant experience is, etc.

Don’t get me wrong, you should know those things. But a “real” business plan — the kind you could take to a bank — can take a long time to write.

Don’t waste months

So how do you know those things without wasting months on a business plan document? Well, first off, know that you may never need to write a 30+ page document at all, especially if you’re thinking about the types of businesses you can start for $100 or less. I’d also highly recommend not going in debt to fund your business idea. You want to make money, not owe it.

But even in cases where a detailed business plan is an excellent idea, to my way of thinking you shouldn’t do it first.

What you really need

No, what you really need to start a small business are clients. The people who pay you money. After all, in order to stay in business you’ve got to make money. And there’s no point in starting a business that you aren’t pretty darn sure you can make money at. (Unless you just want an excuse to continue spending money on a hobby. But that’s not a business — just ask the IRS.)

Sure, do a little bit of research — enough so that you have some idea of what people might pay for the product or service you plan to offer, and enough so that you won’t be breaking any laws.

But then get a customer. Or ideally, two or three.

Don’t just ask people “is this something you would pay for?”. No, ask them to really pay for it.

What people say and what people do

“Sure!” they may say. “That sounds like a great idea! Go for it!”. But that may be because they love you or know you and don’t want to hurt your feelings, or because they think it’s probably a great thing for someone else to spend their money on.

Or you might get people who tell you that you’re insane, and that there’s no way you could make money doing xyz. (Do you think you could make money by sticking people’s cats in a carrier for them? I bet not. But this lady is making $80 a shot catching cats.)

It’s not like people will be out to lie to you and see you fail. It’s just that there’s a difference between what people say and what people do. And it’s what they do that matters.

Start a small business that’s primed for success

So if you really want to know if your business has a chance at success, you’ve got to ask people to buy.

Get real, paying clients. Who are not your friends or relatives.

Then work out the details of your business plan.


  • I have started 4 small businesses so far, and three of them are still alive and well. This is a great post. And you are right about friends. They will always be nice. You need to be sure you have real, paying customers.

  • Knowing that there is a real, tangible market for your product or service is important. Assessing your offering vs what’s currently available by others is a critical step. You’re right, without clients, success will not happen.

  • I’ve had a few small business ideas and tried various things and what I’ve found is that only one thing works – execution. Strategy is a nice to have, money can be a factor when scaling but if it starts working, the money will come. Where so many things fail is in the execution; I have to keep reminding myself!

  • The difference between what people say and what people do is so huge!!!!

  • People always assume that you need money to start a business. I started my blogging business with a free Blogspot blog. Now it has grown quite a bit.

  • Having written a few real business plans and worked as a business coach for aspiring entrepreneurs, I’d suggest that if you’re successful in getting clients without taking the time to fully research and document a business plan, then in reality you sort of already have a plan–it’s just that the plan’s in your head and not on paper.

    Said differently, to succeed in a very big way getting clients, I think you need to have a good feel for your brand, your value proposition, appropriate pricing (i.e., prices that will prove profit-making), and so on. Taking the time to research, analyze, and relegate all this to paper may not be necessary for success with simple businesses started by smart people. I think at some point though an entrepreneur risks confusing prospects, unintentionally creating an inherently money-losing business model, coming across as uncertain, and generally making a, potentially fatal, false start without a well thought out business plan.

    Just my 2 cents, thanks.

    • Oh, I completely agree that you need to have all that stuff well thought out (and documented, too) — just not to start many small businesses. I’m suggesting you need a couple of clients first to see if the business is viable; instead of spending months writing instead of doing.

  • I have known some people that were so mired in planning that they never actually ‘went anywhere’ with their business.

    I think the type of business dictates what up front work needs to be done. (Especially if you need a business loan.) However, for a small business, figure out if there is a market for your product, and if there is, then see if people are interested.

    You are completely right though, clients are incredibly important!!

  • A business plan is very important, but you’re right – customers are more important. Why don’t businesses hire right now? Because they don’t need to because their current staffs meet demand. You need to know the demand in your market, and get some customers that you can meet their demands!

  • Finding clients that will pay and setting the right pricing are definitely key. Friends and family may offer their support, but sadly they aren’t going to be enough to get a business off the ground. Unless of course you have a enormous group of friends and super rich family members who have money to burn! :) -Sydney

    • Yes, I think the “friends & family” sales method only works if you’re starting a home-party type business, and then probably not for very long. You run out of willing friends eventually!

  • Hi Jackie–I really like your point about paying clients. You really need them before you even launch a business, having them proves there’s a business to be had at all. Without them there IS no business!

    When people start a business they tend to concentrate on the business form first–office space, office set up, marketing pieces, etc. It’s better to start with clients and then work all of that out. If you have paying clients then you know there’s a market for your business and you can plunge forward on full throttle. There’s no guess work.

  • I like the idea of a business that has limited liability. That requires little money to start. A business that is not subject to many government regulations. Does not require many special permits or licenses to operate. A business that can be quickly and easily shut down if needed. And a business that has limted contractual liability after its shut down. Requires not a very great deal of knowledge or experience to start or operate.