5 STEPS TO A SUCCESFUL BUISNESS
Q:
Steve - I have always liked the idea of starting my own business but I
have no background in it. How do I know if I am cut out for it? Will it
work? How do I get started? I obviously could use some direction. Thank
you. - Lauren, New Mexico
A: There is no doubt that starting your own business is one of the great, albeit challenging, experiences in life. Is it interesting, rewarding, exciting, and fulfilling? Indeed. But it is also frightening, exhausting, frustrating and tricky.
The problem for the new entrepreneur is that "you don't know what you don't know." But that need not be so. Just understanding the start-up process can make a big difference.
Here then are my five steps for starting a new business.
1. Assess your strengths. Not everyone is born to be a classical pianist, and, by the same token, not everyone is cut out to be an entrepreneur. An "entrepreneur" is, by my definition, a person willing to take a risk with money to make money. If that idea lights your fire, step right up, but if it frightens you, think twice. The fact is, entrepreneurship is a risk, and so, ironically, you have to be willing to lose some money to make some money.
Of course there are other attributes that are required to be an entrepreneur, including:
2. Choose the right business. Once you have concluded that you have the temperament to start a business, the next obvious question is what sort of business? When it comes to choosing a business, there are two types of entrepreneurs.
The first type of entrepreneur: A person who loves something so much that he or she simply must do it for a career. It might be the weekend gardener who loves the idea of starting her own nursery or the computer geek who wants to open his own mobile repair business. As long as you conclude there is a market for your beloved business, this is a fine way to go.
The second type of entrepreneur: A person who is not in love with a particular idea per se, but in love with the idea of entrepreneurship itself. Frederik Wendelboe is a colleague of mine who is an entrepreneur in the San Francisco Bay area. After analyzing several possible new business options a few years ago, he decided to start what became a very successful back support manufacturing business. Why back support? Because he had concluded that the market potential was too great to pass up.
So the bottom line is this: Whether you love a certain profession or just love an idea, pick a business that you will love.
3. Write a winning business plan: A pilot would never fly from Seattle to New York without a comprehensive flight plan that tells him what direction to head, how much fuel he will need, important markers to look for along the way, and so on.
Well, your business plan is your flight plan for your new startup. Before you even open your business, you need to thoroughly think through what the business will be, why it will be unique, how you will get customers, how you will handle the competition, and so on. That is your business plan. Not only will you use it to make sure you are on the right track, but investors will want to see it to determine whether your new business is a worthwhile investment.
As such, a big part of that plan will be your financial analysis: How much money will you need, how will you spend it, how much profit can you reasonably expect to make? Your financials will tell you. The best way to figure this out is by using the right software program.
4. Line up your funding: There are many places to find the money you need to get started. (Your business plan should spell them out.) It could come from your savings, credit cards, retirement accounts, a second mortgage, an advance on an inheritance, friends and family, or a combination of the above.
When Chris Haney and Scott Abbott had a kooky idea for a new board game, they pestered 40 friends, family and business associates into investing $1,000 each. The game they invented Trivial Pursuit made every one of their investors millionaires.
The important thing is that you find enough money to get started properly. There is nothing worse than starting out with a cash-crunch.
5. Open up shop: Armed with a great idea you love, an accurate business plan, and enough funding, it is time to get started. Find a location and outfit the office. Don't skimp on your computers and software since, for most businesses, these are the basic tools you will use to run the shop everyday. Hire staff. Have a grand opening party.
So you are a bit nervous on your first day? Welcome to the entrepreneurs' club!
BY
By Steve Strauss
A: There is no doubt that starting your own business is one of the great, albeit challenging, experiences in life. Is it interesting, rewarding, exciting, and fulfilling? Indeed. But it is also frightening, exhausting, frustrating and tricky.
The problem for the new entrepreneur is that "you don't know what you don't know." But that need not be so. Just understanding the start-up process can make a big difference.
Here then are my five steps for starting a new business.
1. Assess your strengths. Not everyone is born to be a classical pianist, and, by the same token, not everyone is cut out to be an entrepreneur. An "entrepreneur" is, by my definition, a person willing to take a risk with money to make money. If that idea lights your fire, step right up, but if it frightens you, think twice. The fact is, entrepreneurship is a risk, and so, ironically, you have to be willing to lose some money to make some money.
Of course there are other attributes that are required to be an entrepreneur, including:
- Being a self-starter
- Having a willingness to work hard
- Possessing an ability to handle uncertainty
- Having self-discipline
2. Choose the right business. Once you have concluded that you have the temperament to start a business, the next obvious question is what sort of business? When it comes to choosing a business, there are two types of entrepreneurs.
The first type of entrepreneur: A person who loves something so much that he or she simply must do it for a career. It might be the weekend gardener who loves the idea of starting her own nursery or the computer geek who wants to open his own mobile repair business. As long as you conclude there is a market for your beloved business, this is a fine way to go.
The second type of entrepreneur: A person who is not in love with a particular idea per se, but in love with the idea of entrepreneurship itself. Frederik Wendelboe is a colleague of mine who is an entrepreneur in the San Francisco Bay area. After analyzing several possible new business options a few years ago, he decided to start what became a very successful back support manufacturing business. Why back support? Because he had concluded that the market potential was too great to pass up.
So the bottom line is this: Whether you love a certain profession or just love an idea, pick a business that you will love.
3. Write a winning business plan: A pilot would never fly from Seattle to New York without a comprehensive flight plan that tells him what direction to head, how much fuel he will need, important markers to look for along the way, and so on.
Well, your business plan is your flight plan for your new startup. Before you even open your business, you need to thoroughly think through what the business will be, why it will be unique, how you will get customers, how you will handle the competition, and so on. That is your business plan. Not only will you use it to make sure you are on the right track, but investors will want to see it to determine whether your new business is a worthwhile investment.
As such, a big part of that plan will be your financial analysis: How much money will you need, how will you spend it, how much profit can you reasonably expect to make? Your financials will tell you. The best way to figure this out is by using the right software program.
4. Line up your funding: There are many places to find the money you need to get started. (Your business plan should spell them out.) It could come from your savings, credit cards, retirement accounts, a second mortgage, an advance on an inheritance, friends and family, or a combination of the above.
When Chris Haney and Scott Abbott had a kooky idea for a new board game, they pestered 40 friends, family and business associates into investing $1,000 each. The game they invented Trivial Pursuit made every one of their investors millionaires.
The important thing is that you find enough money to get started properly. There is nothing worse than starting out with a cash-crunch.
5. Open up shop: Armed with a great idea you love, an accurate business plan, and enough funding, it is time to get started. Find a location and outfit the office. Don't skimp on your computers and software since, for most businesses, these are the basic tools you will use to run the shop everyday. Hire staff. Have a grand opening party.
So you are a bit nervous on your first day? Welcome to the entrepreneurs' club!
BY
By Steve Strauss
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