Deciding Whether to Start a Small Business
Starting up your own small business can be very rewarding, but there are pressures involved. It's not enough just to have a good, viable idea: you also need to have ther right skills and temperament to make the opportunity succeed. Starting your own small business is also a risky thing to do, so you need to be aware of what problems to look out for as early as possible. This will help you decide if you are willing and able to take those risks, and will also help you to apply strategies that will reduce them.
Before you go any further, it's important to find out as much as you can about what sort of person you are. Be honest and objective, and discuss the project with freiends, colleagues, and response to difficult new situations. This actionlist will help you to decide whether starting a small buiness is ther right thing for you to do.
Making It Happen
Assess Your Abilities and Resources
Starting your own buiness is a risky thing to do, so you should get to grips with the
various risks as early as possible. This will help you decided if you are willing and able to talke those risks. It will also help you to apply strategies that will reduce the risk.
You need to ask yourself serveral questions. Do you have the financial resources, and can you afford to risk these? For example, you might take a secured loan based on the value of your home; what are your plans if the small business fails and you are forced to sell your house? Do you have sufficient experience and technical skills to perform the core functions of your new small business? Are you familiar enough with the market to be able to assess its needs and adapt to its changes? Do you have the tenacity and discipline to see through hard times when cash will be short and demands will be heavy (from customers, bankers, staff, and, crucially, your family)?
While you might not be able to answer all these question completely, it really is important to find out as much as you can about what sort of person you are, and to do that you must be honest and objective. Discuss the project with friends, colleagues, and relations. Think about how you have dealt with past challenges, as an indication of your response to difficult new situations.
Look at Your Motives
Why do you want to start your own business? There are many good reasons, but there is often the danger of having unrealistic expectations. Here are some reasons that people often give, and some notes of caution:
Independence. Yes, it can be irksome working for someone else, but you still need to be disciplined and able to get on with others when you work for yourself.
Greater job satisfaction. Self-employment allows you to do the job in your own way, and it is very satisfying when your way is shown to work. You do, of course, also have to take responibility your way when it doesn't work.
Achievement and success. There can be some cachet attached to the idea of running you own small business, but make sure that you are not trying to prove that your're something you're not. If the venture failed, would you be able to deal with it?
More Money. While the thought of being better off financially is naturally attractive, doing it for the money is not usually a good enough motive in itself, and greater wealth is by no means guaranteed. In particular, beware of starting a small business when you have no other choice. In this case, remember the importance of maintaining a positive but pragmatic vision of what you can achieve.
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Assessing Your Enterpreneurial Profile: Do You Have What it Takes?
GETTING STARTED
Once you've started thinking about starting a small business, you need to start thinking about your own role in it. Are you the right type of person to make a success of a new venture? There's a great deal of romance surrounding the notion of being an entrepreneur, but not everyone has the aptitude. And it's important to understand that there's nothing wrong with not being an entrepreneur. The world wouldn't function half as well if it were people solely with them.
Nevertheless, there are some general personality traits that are key for being an entrepreneur. If the following list seems to fit your pesonality, you may have what it takes:
I am persistent, with a great deal of drive and stamina. I see problems as opportunities. I have a good intuitive sense and thrive on new ideas.
I tend to rebel against authority. I want to be my own boss.
I am positive, communicate well, and enjoy working with people.
I have a strong need to succeed, financially and otherwise.
I'm not afraid to make mistakes, and I learn from them.
MAKING IT HAPPEN
Check That You Have the Right Idea.
If you've got a great new idea and no competition in sight, you must be sure that the product or service will be of value to customers-at a price at which you can afford to sell it. If your aim is to enter a field with established competitors, you have to know your own strenths and weaknesses, as well as those of your competition. You have to be certain that you can provide a better product or service for a competitive price. Finding out all these things is called "market research," and you'll have to do a thorough job of it to succeed.
Develop a Detailed, Professional Small Business Plan
This is the key to building a successful small business. Having a well-considered and systematic plan allows you to recognize problems as they arise in time to be able to take corrective action. The plan should be a living document, flexible over time to adapt to changes in the marketplace and your industry. It should include sections on every facet of your small business-whether you're a sole proprietor or the executive director of a new manufacturing venture.
Bankroll Your Idea
Take your ideas and small buiness plan to a variety of people, starting with friends and close supporters. Be prepared for critical feedback, and be flexible. Take the inevitable first few comments of "no thanks" as opportunities to fine tune the next presentation. One of the hallmarks of an entrepreneur is the ability to regroup, rethink, and reach a goal in another way.
Seeking publictiy for your small business is a way not only to notify potential customers but also to ge the attention of possible investors. The more people who know about your idea, the better the chances that you'll attract the right investor.
Be willing to share a portion of the company with the right partners, but be wary of finance companies and investors who want full control or the lion's share of the proceeds.
Consider entering a joint venture with another company or position your company to attract start-up funds from federal or state sources.
Practice Your Networking
Being entrepreneurial doesn't mean being a lone ranger. Being successful often depends on your ability to network with potential customers, suppliers, and new investors, and even with those in government who control certain aspects of the business environment.
Plan Your Marketing and PR
An integral part of your small business plan involves a marketing plan-how you intend to create the demand for your product or service. While market research tells you the "what" and "where" of your opportunities, the marketing plan outlines the steps by which you will find potential customers and convince them to buy from you. Netwoking, advertising, and PR (public relations) are all forms of marketing and promotion.
