Are You Starting The Right Small Business? Part 3 of 3

Business Rule# 6- Laying the Foundation
Now that you have figured out what business you would like to start, let’s start examining if you have what it takes to successfully start and run that business. You first have to research the business you plan to enter.

Once you begin your research on that business, answer the questions below:

•  What are the day to day activities of the business?
•  Is this truly a job that you can see yourself doing every day?  
• What kind of skills, certification, license or knowledge needed in order to start and run your business idea?
• Do have these necessary skills, certification, license or knowledge?

In order to figure out if the business you are considering is for you must be able to see yourself doing this job until you retire. It cannot be a quick fix or an illusion of what you believe the job would be like. It's hard enough to work at jobs that you hate but it’s an even harder when it’s your business and you have so much invested. You not only run the risk of failure but there is no real foundation laid that will encourage your business to grow. Your odds of a failed business are greater when you start a business only because it sounds like a great idea. In order to better your odds, it is best to figure out what it takes to run the business and figuring out if you have what it takes to start that business.

To lay the right foundation for your business it must be business that you are qualified to start. If you research the market you plan to enter it will allow you to better understand if you have the necessary skills, knowledge, experience and any other necessary attribute needed to start that business. Knowing this will help you find the right business for you and it will increase your chances of success. Once you complete your research and can answer the above questions confidently, you should have a solid business idea that supports and strengthens your business goals. A successful business idea not only stems from your skills or experience but it strengthens your business goals and prepares you for the next step in starting a small business.

SBS Business Start-Up Rules 

#4- Value your Skills & Experience

#5- Business Idea vs. Business Goals

#6- Laying the Foundation

SBS business start-up rules 4-6 were geared to help you figure out how to find the right small business venture to start. It is important to choose the right business to increase your chances of success and to limit your risk factors. Using the Business Rules as a resource will help you make your first solid decision as an entrepreneur by deciding what business you should start. After establishing the small business you are going to start, it's now time to start thinking about what's next.

Are you starting the correct business? 
What do you think is the next?

Are You Starting The Right Small Business? Part 2 of 3

Business Rule# 5- Business Idea vs. Business Goals
The purpose of business rule #3-Define Your Purpose is not only to figure out if you are starting the right business but it can also help you figure out if your business idea is congruent with your business goals. If your business goal is to achieve financial success, you probably don't want to start a business that only have the potential to allow you break even and not profit. It is imperative that you take a close look at what it means to be financially successful. In order for your business to be successful the job must be able to cover your personal and business financial needs. Start thinking about the profit your business will have to accumulate in order to cover those expenses. Will your product or service generate enough funds to cover your financial needs?

Other questions to consider:

•     Is there a need or market opening for the product or service you plan to offer?
•     Could your dreams manifest into an actual business that will be capable of surviving, thriving and  being profitable?

 The key here is to figure out if the business idea that you have 'gels' with your business goals and personal needs. Your objective here is to minimize your three business ideas down to only one by breaking down what your business goals really mean and if your business idea can help you achieve your business goal. If your business idea doesn't 'gel' with your business goals and personal needs, this allows you better choose the right business for you. Below is an example of Business ideas and how they relate to common business goals.
Use this as a guide when examining if your business idea supports your business goal.

 Business Goal-Creative Control:  If your business goal is to start a business that allows you to have creative control then you are more likely to start a business that focuses on creativity. It wouldn’t be a good business idea if you started a business that severely limited your creative abilities and wouldn’t be supporting your business goals. 

Starting a web designing business allows you to have creative control over client projects with limited direction. A web designing business works well with a business goal to have creative control but to be successful you must research thoroughly what having creative control mean. You must have a complete understanding of the limits to your creative control during projects. Knowing the market and understanding the current trends is very important in web design. A lot of time will be spent trying to keep up with current trends, so how much time of your time will be truly spent on engaging in the creative aspect of the business? Researching and defining what having creative control means allow you to eliminate business ideas that don’t coincide with your business goals.

 Business Goal- For the Experience: A lot of people start their business for the purpose of their type of lifestyle. They are called 'Lifestyle Entrepreneurs' and their entire purpose is creating a business as a means to support their lifestyle. They do not go into business for the objective of creative control or management but as a means to support their lifestyle. It's best to start the type of business that will not bind you to a 40+ hour work week.

 Starting a part time business giving piano lessons, allows a productive part time business that will still cater to your lifestyle. A part time piano teaching business obviously satisfy the goal of going into business for the experience but in order to make sure starting piano lessons is enough to support your lifestyle you have to do your research. You would research if your area has a market for a piano teacher and if you could accumulate enough clients to sustain your business.

It is very important that you understand what your needs and goals are and how it works with your business idea.

Are You Starting The Right Small Business? 

Are You Starting The Right Small Business? Part 1 of 3

"We believe that there is one economic lesson which our twentieth century experience has demonstrated conclusively-that America can no more survive and grow without big business than it can survive and grow without small business.... the two are interdependent.”
–Benjamin Franklin.

As readers defined their business goals in earlier discussions, it should have become clear to the reader what they intended to get out of starting a small business. Now figuring out what type of small business to start is the next key step. SBS business start-up rules 4-7 is geared toward helping you develop solid business ideas that can become small business opportunities.

Many entrepreneurs found inspiration for their small business by focusing on the businesses that were related to their hobbies. That is the focus of Business Rule#4. At the end of this blog you will have compiled a list of three potential small businesses that you can start.

Business Rule# 4- Value Your Skills & Experience
Completing business rules 1-3 not only allowed you to figure out if you were compatible with Entrepreneurship but it also helped you define your business goals. So now it's time to think what type of business you can start that will help you achieve these goals?  In order to figure out what type of small business you should start, first think about the businesses that you have some sort of experience or knowledge in. That is the easiest way to come up with several different business ideas. The below exercise is designed to help you come up with three business ideas that you can start a small business in. Even if you already have a business idea in mind, the exercise will help you clarify if your business idea is the right business for you.

Exercise:
Step 1: Draw a line down the middle of your paper.

Step 2: On the right side make a list that includes the following:

•     Your business ideas
•     Hobbies
•     Volunteer work
•     Special skills
•     Talents
•     Personal/job experience

All these different areas can be a possible inspiration for your business. Focusing on the subjects and topics that you are most familiar with will help you find a suitable business that you enjoy.  Many people think their love for photos could never turn into a lucrative business but in reality many small business started off as a hobby. It can be hard for some people to identify their hobbies as possible business ventures.

Step 3: On the left side, list all the different business you could start next to each entry. (I.e. if your hobby is making beautiful candles then consider becoming a candle maker. Other possible job options could be to teach others how to make candles or focusing on candle distribution.)

Another way to look at your list is to examine the on the job training that you received. It could possibly be that your job has been requiring you to master Microsoft Access to the point that you are now considered an expert. To you this seemed to be a useless skill that you have but in reality this newly gained knowledge could be a small business opportunity. This new experience can lead to a small business opportunity of creating Access databases for companies or you could even teach what you know about access. 

The point of the exercise is to get you to identify the things you enjoy or already an expert in and use that to turn into a small business. Through examination of your list of hobbies and experiences it gives you a broad option of businesses that you could start.

If you don’t have any experience or skills in the business you plan to start, does that mean you are going to fail?  No, that’s not what that means but what it does mean is that you may have to acquire additional cost to your overall budget in order to obtain the necessary skills. You can always outsource or hire someone to help you in the areas that you fail to excel in but that could also be an additional cost to the budget. If your hobby is collecting antique items and you decide to open an antique shop that would be a perfect match. However it is not a solid business idea to start an automotive shop but you know absolutely nothing about the automotive industry or cars. Having no knowledge or experience in the market you plan to enter doesn’t necessarily mean failure but it can seriously hinder you from a solid start.

Once you are finish with your list, it is now time to make a top 3 list of possible small business options. Make sure your 3 business ideas are ideas that you have some experience or knowledge in. If not, then make a separate list on how you plan to acquire the necessary tools needed to proceed with your business idea.

Are You Starting The Right Small Business?

Are you compatible with Entrepreneurship? Part 3 of 3

Business Rule# 3- Define Your Purpose
Now that you have figured out what it takes to become an entrepreneur and your compatibility with entrepreneurship, now it’s time to figure out the reason you want to start your own business. The cause for many entrepreneurs’ to enter small business varies but a lot of the reason is motivated from some sort of frustration with their current employer. Which is a perfectly fine motivation to begin entrepreneurship but believing that all your problems will be lifted once you go into business for yourself is going into entrepreneurship blindly. 

By understanding why you want to start your own business it will help you figure out if starting your own business is a good idea or not. According to Rhonda Abrams in Six Week Start Up, she summons the reason for most entrepreneurs in what she calls the Four C's; Creativity, Control, Challenge and Cash (1). The motivation for the start of many small business can be easily identified in one of the Four C's and being able to identify where you fall into this category will bring you closer to understanding if entrepreneurship is for you. The list below is a guideline based of Abrams Four C's that can help you define what your business goals are.

Most Common Business Goals:

•     To have creative control
•     For management control
•     For the experience
•     To achieve financial success or security.

Defining your business goals will help you understand why you we want to start your own business. Once you have identified and defined your business goals it’s now time to think about if you are going into business for the right reasons.  Are you holding on to ill feelings from your previous employer and is that anger your business foundation? Are your business goals in sync with the character traits identified earlier?

SBS Business Start-up Rules

#1 Know Thy Self

#2 Be Informed

#3 Define Your Purpose

Over the past three days we have discussed simple business rules that will help limit risk and confusion regarding if you should start your own business. Combining all three parts of the business rules into your decision making process encourages a deep reflection and better understanding of how to decide if entrepreneurship is for you.

Are you compatible with Entrepreneurship?

For further study
Work Cited:

(1) Abrams, Rhonda M. Six-week Start-up: a Step-by-step Program for Starting Your Business, Making Money, and Achieving Your Goals. Palo Alto, Calif.: Planning Shop, 2004. Print.

Are You Compatible with Entrepreneurship? Part 2 of 3

Business Rule #2- Be Informed
Now that you have a better understanding of self, let’s examine what it means to be an entrepreneur. Of course you get to dictate your hours, your pay and at times complete creative control over the business. The illusion that now that you are an employer verses your usual title as employee, it will somehow relinquish you from the long hours and hard work that comes with being an employee but the fact of the matter is when you go into business for yourself you will work harder and longer hours then you did as an employee.

Understanding the transformation from a traditional job as an employee to entrepreneurship as the employer can be an indicator if you should attempt to switch. Before you can dive into entrepreneurship you must fully understand what it is to be in business for yourself and consider all the responsibilities it entails. You must research the industry that you are thinking of entering and not only the outer appearance of the day to day business but the administrative side, financial/bookkeeping, the marketing, sales, legal and personnel part of the business. When you go into business for yourself you are no longer just part of one aspect of the company but you are now responsible for the entire livelihood and success of your business. Having a realistic view of starting and running a small business, and it’s many risk will more than prepare you but will help you make an informed decision rather to start a small business or not.

To be a successful business person you must understand that most entrepreneurs’ start off running all aspects of the business from general office needs to sales. It is important to be completely informed on the day to day duties of an entrepreneur in order to figure out if starting a small business is for you. Below is a list of entrepreneurial character traits that you can compare to your personal character traits that you created in the prior exercise.  Check off all the character traits you posses that are found on the Entrepreneurial Character trait list below.

Entrepreneurial character trait list: (In no particular order)

•     Determination
•     Innovative
•     Disciplined
•     Flexible
•     Changeable
•     Adaptable
•     Responsible
•     Assertive
•     Sales(wo)men
•     Leadership
•     Creative
•     Optimistic
•     Realistic
•     Prepared
•     Confidence
•     Responsive
•     Independent
•     Customer Focused
•     Organized
•     Motivated
•     Humble
•     Hard working
•     Patient
•     Enduring
•     Common Sense

Identifying what it takes to be a successful entrepreneur helps you figure out if you are compatible with entrepreneurship and if you should move pass the thought process into making your dreams manifest.

 Did I miss any entrepreneurial character traits? What would you add or take away from the list?