Starting Small

At Employment Services (formerly LDS Jobs), we'll help you become gainfully employed through education and networking with local companies.

Running a successful business requires watching your resources carefully from the beginning and taking the proper initiatives. It is also important to heed the counsel to plan and save for the future. “For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?” (Luke 14:28).  

Below are some ideas and suggestions for planning a business:

What Helps?

Know your resources and know your limits. Have a clear picture of where you and your business stand.

  • Know your market. Find out how many people will buy your product or service, how often they will buy it, and what they will pay. This is all part of conducting market research.
  • Use your profits wisely. At times when your business is doing well, put money aside for a “rainy-day” fund. Having savings gives you security and funds to take advantage of opportunities when they arise.
  • Avoid unnecessary debt. If possible, try to work at a steady job when beginning a small business. The regular income can cover finances when a business is starting out and cash flow is fluctuating.
  • Don’t bank on overnight success. Remember that almost all businesses take time to show a profit and will require hard work and patience.   
What Hinders?

A common mistake with starting a business is people trying to do too much too soon. The following are other common mistakes:

Not Enough Market Research

Not having enough information and not asking enough questions will give you skewed results and false conclusions. It is important not to jump ahead of research. You need to reason out both affirmative and negative facts.

If someone else was trying to sell you an idea that involved your time and money, how skeptical would you be? Wouldn’t you expect proof of their research and want to make sure they looked at their findings from every angle?

Taking Out Loans You Do Not Need

Remember to risk only what you can afford to lose. Big investments could yield big returns, but they could also result in big losses.

Follow the counsel of President Heber J. Grant (1856–1945): “If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means. And if there is any one thing that is grinding and discouraging and disheartening, it is to have debts and obligations that one cannot meet” (in Gospel Standards, comp. G. Homer Durham [1941], 111). 

What Is the Difference between Starting Small and Not Taking Opportunities?

There is a difference between being careful with your funds and not updating your business to meet the market.

Have a Good Plan

If you are taking a risk, make sure it is a calculated one with a thought-out plan behind it. Ask yourself, “What can I afford?” You may come across an opportunity that sounds good, but only if it goes well. A risk that will sink your business if it fails is never a good plan. Evaluate risks by asking:

  • How long before this is paid off?
  • How long until it shows a profit?

Risks are not always in immediate monetary value. You need to consider how much work needs to be put into something before it will show a profit. How long can you afford to work at cost, without spending income but not earning any income either?


A mistake that people often make is not taking the initiative for their business. Just because a business owner is cautious does not mean he or she doesn’t try to improve the business.

Don’t just plan on conducting market research once; always be looking for new ways to present your product, and look ahead to understand changing trends in the market.

As the philosopher Bruce Barton said, “Action and reaction, ebb and flow, trial and error, change—this is the rhythm of living” (The International Dictionary of Thoughts [1969], 117). Change is one thing to always expect with business, and a business that does not adapt with changing markets will not succeed. 

Basic Business Practices

See the discussion of the four cornerstones in The Self-Employment Workshop.

  • Have a clear picture of what the business is from day-to-day.
  • Understand your market and the needs you are catering to.
  • Once you know your business and what your market wants, find new ways to present your product to your market.
  • Stay on top of your finances. Manage the financial side of your business with close attention to the details.

Good Resources for Market Research

Networking – Contacting people you know who have experience in your industry. See Networking.

Industry Groups – Organizations of people who specialize in a particular service or product.

Government or commercial Web sites – Internet sites that evaluate trends in national markets. See Researching a Company.

OPI Research – This is research you conduct yourself.

  1. Observe – Observe a business like the one you would like to start. Take note who is going in and how they react when they come out. Do the people have product in hand.
  2. Participate – Walk in as a customer and ask about what times are good for getting an appointment or which products they recommend. This is one way to learn about peak hours and best-selling products.
  3. Interview – Strike up casual conversations with people who have just left the business. Ask them what their opinion of the service is and if their expectations were met.  
What a Business Owner Should Know about a Loan

All business owners want to know they are getting a good deal. If a loan is needed for your business, make sure that you understand the terms and that they are the best they can be for your situation. Don’t feel bullied into accepting an undesirable financial risk. The best loan for you is out there; it is only a matter of comparing the different rates, fees, and penalties.

 ​Is This Worth Financing?

Determine if a loan is necessary by learning what financing options are available to you and the risks associated with each option. The best way to find out this information is to talk with people who have gotten a loan. Ask them about the advantages and disadvantages. Also you can find out what financial resources are available in your area by conducting a search of self-employment resources on this site or by contacting the nearest LDS employment resource center or self-reliance center.

What Is My Ability to Repay a Loan?

If you decide a loan is necessary, then you need to determine the key point of a loan—how you will pay it back. Look at the project you want to invest in. How can you use the money to create a return? It is important that you figure out exactly how much money you will get from an investment (and how quickly you will get it), because your business will have to make enough to cover your regular costs plus the loan payments.

How Does This Loan Compare with Others?

Getting a loan doesn’t just depend on the interest rate; there are different details of a loan that need to be compared with those from other lending institutions.

Rates – For example, one person may find that an interest rate from one bank is very low, but that’s because the interest rate will increase after the first six months.

Fees and Penalties – A loan can have fees attached to it, and penalties are fines that come from missing a payment, defaulting on a loan, or sometimes for making early payments.

Guarantees – These are the precautions taken to make sure a person honors a loan commitment. Even though you work hard and your business is successful, remember to plan for the worst case.

Collateral – This is something you or another person offers for the lender to keep if you default on the loan. Never put something up for collateral that you cannot afford to lose.

Cosigners – This is someone who is taking a calculated risk with you. Cosigners offer to pay the loan if you cannot. If you have to default on a loan, make sure it will not damage your relationship with friends or family who have agreed to help you.

Other services offered – Lending institutions can often include other services that are beneficial to a business and could be worth the added expense of a loan. These services can include:

  • Business training and skills.
  • Market studies.
  • Business planning.
  • Insurance.
  • Group loans or microcredit (While group loans and microcredit are rare inside the United States and Canada, they are common in many parts of the world. You can apply for a loan with other individuals, and if one person can’t pay one month, the group covers the loan payments. Loan groups meet often to discuss business challenges and successes. The group is a source of learning, support, and encouragement.)  


Was this helpful?