Starting your own business may be one of the biggest risks you will take in
your life - and the statistics confirm it. According to the Small Business
Administration (SBA), two-thirds of new businesses survive for a minimum of two
years, with only 44 percent surviving at least four years.
Yet, in good and bad times, the dream of being your own boss and pursuing a
for-profit or non-profit business venture can be an enticing one. In fact, when
the economy struggles, the number of non-employer small businesses tends to
increase at a higher rate than the number of employer businesses (Source:
SBA Small Business Advocate, July 2009).
But how do you make that dream a reality and take the plunge into the risky
waters of small business ownership?
No doubt there is a lot to wade through - tight credit, fickle consumers, and
oftentimes stiff competition. Then there are the personal risks - the loss of a
steady pay check, finding health care insurance, and so on.
These and other reasons are enough to make many potential entrepreneurs
fearful of taking the plunge. But given the right preparedness, planning, and
financing, many entrepreneurs do take the plunge and succeed.
Here are some tips for making these three factors work for you as you
consider starting your own business:
1. Is Business Ownership Right for You?
When you get the calling to start your own business venture, it can be a
compelling one. For some it's layoffs, for others it's the dream of taking a
unique product or invention to market.
But there is a difference between a calling and preparedness. Being a
successful business owner requires at least four fundamental qualities:
- Diligence - Aside from being one of the seven holy
virtues, diligence in business drives methodical work methods and an active
rather than a passive approach. - Determination - A determination to succeed, no matter
what conflicting advice you receive or doubts that you may have, must be
there. - Hard work - This is the DNA of the successful business
owner. You get from your business what you put into it. - Adaptability - As a business owner you must be able to
shift with the market, learn from your mistakes, and change your business
plans accordingly.
Take this quick Small Business Start-Up Assessment from the SBA to help better
understand your readiness for starting a small business.
Another great resource is this checklist from www.business.gov - "10
Steps to Starting a Business" - that guides you through the basic steps of
planning, preparing and managing your new business.
2. Do you have a Plan?
Many start-ups put writing a business plan on hold until they find they need
to get a business loan. But, without a plan, taking the plunge into business
ownership will surely end in disaster.
A strategic business plan should include a review of your strengths and
weaknesses; an understanding of the market opportunity and threats; proposed
sales and marketing strategies; as well as a clear plan for business ownership,
management, and funding.
The government offers a great deal of advice to prospective and existing
business owners on the subject of planning. This "Write a
Business Plan" guide for small businesses from www.business.gov includes tips
and free training on how to write a business plan, offers hundreds of sample
business plans, and more.
I also can't emphasize enough how important it is to talk to a representative
or attend business start-up events at your local SCORE, SBA, or Small Business
Development Center (SBDC). These organizations provide invaluable help
and advice when it comes to business planning. Find one near you here.
3. Financing your Start-up: Low Risk
Options
Financing can be a major road block to starting your business - not only do
you need capital to get started, you also need a cushion to cover the ebb and
flows of cash flow.
If you are reticent about taking on a large financial risk as your start your
business, here are four options to consider:
- Start from Home - Home-based businesses (approximately
50% of small businesses are home-based) require a lot less investment than
operating out of a leased or owned business property. Read more about "Starting a
Home-Based Business". - Start Online - Another option is to start your business
venture online. Granted, not all businesses can operate online, but for
retailers and some service providers starting an online business is a low-cost
entry into business ownership. Read "Starting and Growing an Online Business - An Entrepreneur's
Checklist" for tips. - Start Part-Time - If you are currently employed, can you
alleviate some of the risks of starting your business by venturing into it on
a part-time basis? This is oftentimes a great option for freelancers who can
build a client base while still maintaining a full-time job. - Government-Guaranteed Loans - Much has been written about
how credit has dried up for small business owners, but, in the past few
months, the SBA has introduced some finance lifelines for small business
start-ups, including temporarily waiving loan fees and raising loan guarantees
to stimulate banks to lend. Read more about these here: "The Recovery Act - SBA Loans and Your Small Business". When
it comes to government-backed loans, the SBA's Microloan Program provides very small loans (up to
$35,000) to start-ups. Read more about the Microloan Program and other SBA loans here.
Additional Resources
- Tips for Getting Your Small Business Loan Request Approved (Even in Today's
Economy)
- How to Prepare a Loan Proposal
- Before You Start Your Home-Based Business: Do Some Due Diligence
- Equip Your Small Business by Buying Government Surplus
- How to Start a Non-Profit Organization
- Top 10 Reasons to Start a Business in a Recession
- 7 Biggest Mistakes of Business
AttorneyBritt
Gary L. Britt, CPA, J.D.
1200 Abernathy Road, Suite 1700
Atlanta, Georgia 30328
404-567-6445
“Lawyer's That Mean Business”
0 comments:
Post a Comment