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Starting A New Business

Every year hundreds of thousands of Americans start new businesses.  Some of it’s a natural consequence of a less friendly economy that seems to discount loyalty and experience and throws senior employees onto the street.   In other cases folks feel like they are “wired” to be in business for themselves.  If that’s the case you’ve probably been more or less self-employed since you were 15 years old.  The idea of owning your own business, being your own boss who comes and goes as he pleases is appealing to many.  Unfortunately few of us are really cut out for it.  Experience teaches us that, depending on the industry, between fifty and ninety percent will fail within the first five years.  Of those who succeed, you can boil all the reasons down to three things: they planned well, they had or found enough money, and they had sufficient determination.  In addition, to these three essential ingredients, you also need to be a pretty good manager, marketer, salesman, financial guru, process guy, negotiator, and amateur lawyer.  Many people are good as several of these things but not all.  And if you’re like the rest of us you’ll either need to learn quickly or you’ll need to  go get some additional team players to fill the gaps.

Creating a good business plan is the right place to start.  It will help you define your expected customer base, realistically appraise the marketplace you are entering, and determine how you are going to fund the venture until it is a going concern.  You’ll absolutely need a good business plan if you need investors (even if most are relatives) to help support your dream.  Right behind this, and perhaps simultaneously, you’ll need a good marketing plan:  How are you going to get the word out that you’re ready for customers?  And don’t overlook the possibilities for free publicity. While were talking about marketing plans, get your elevator speech ready.  Elevator Speech?  It’s what you would tell someone about your business if you had just 20 seconds to do it. And it had better start and end with how your business helps your customers.  If possible, before you leap, give both plans to a number of people who like you and care about your success and ask them for their realistic appraisal.  And get real about the amount of time it’s going take you to execute your plan.  No one else is in a rush to get you up and going.  This includes your lawyer, if you incorporate, your accountant, your commercial landlord, your web designer, or your printer.  The possible exception might be your marketing channels…if you are paying them to run ads.

Wouldn’t it be great if we could just take the risk, put in the hours, and be a smashing success right off the bat.  Well maybe you can if you’re willing to do some serious market research before you risk it all.  It works like this:  You’ve got a product or service in mind that the world is just going to love, right? Well, let’s find out.  Visualize your potential customers, make a list of 20 of them and ask for 30 minutes of their time to hit them with your scheme. Don’t even think about writing them a letter. Go for the main man/woman. Hey! Ross Perot still answers his own phone.   You’re a budding entrepreneur, you better have a lot of courage. If they own storefronts just walk in unannounced and start right in on your pitch: “I’m thinking of opening a business that supports your business, can you spare a few minutes.”  If they’re big guys or gals in offices, call them up.  Tell them why you want a meeting, and ask for their help.  Amazingly most will grant you an interview.  Why?  Because they too secretly want to go into business for themselves some day and they want to study those who are willing to try.  Go make your pitch. Then get ready to listen.  Really listen. Now ask them, if on the basis of what they’ve heard from you, would they buy from you, and if not why not? And what would it take on your part to get them to buy from you.   And if so, how much, or how often?  If you only get 10 prospective customers to talk to you, you will be at least three years further down the road to success and you may very well have the luxury of starting a business with a small base of real customers.

If you’re still willing to charge forward, let me take one last shot at introducing some realism into this quest:  Sooner or later your new venture is going to require everything you’ve got:  All your time, all your attention, and all your money and eventually all your credit.  You will lose your friends.  You may lose your family.   No really believes this when they get started in a new venture but for some reason we just don’t seem get moving fast enough, or learn fast enough, or react fast enough, at least not until the wolf is nipping at our heels. “Nothing so concentrates the mind as the prospect of being hung in the morning” – Samuel Johnson.  If you’re idea for a business isn’t really wonderful enough to bet all that, you need to get after the business of looking for your next job

Enough negativity.   Lets look at how to do it. For that I’m going to send you off to several wonderful resource centers.  After you look at all that do not overlook your city, county, state, and national governments.  You live there and they are really partial to small businesses and startups…so learn how to talk the lingo and bid.  In hard times they may be the only ones who can afford you. 

Resources

Quick MBA’s treatise on Strategy.  You’re probably going to need both.

From David Jobber’s: Principles and Practices of Marketing: How to create a marketing plan.

American Express’ Open: Small Business Resource Center.  Check out the “Inform” section. Wow. Talk about a resource.

Choose What - Nifty new business start up checklist. Each item is linked to additonal detailed information and resources.

© Copyright 2003 - 2006, Donald J. Bodwell.  All rights reserved. Email: bbodwell@earthlink.net