So you want to go into business.
Many of us have dreamed about going into business for ourselves. Utilizing our talents, the skills we have honed over the years and the knowledge that we have accumulated. Unfortunately, very few of us will do something about it, only 5%. We are going to explore self-employment to determine if it is right for you.
The reasons people go into their own business vary. Most of us have the desire to be our own boss. We want to get compensated for our efforts instead of getting a stipend while making money for someone else. We are interested controlling our own destiny. We want to grow and develop a business so that we can create wealth and build equity, live the life we want to live and perhaps even leave the business to our children. Whatever the reason, we all seem to have that urge to be our own boss.
So why do only 5% go into business for themselves? Fear is the main factor. They create many reasons (fear) why they shouldn’t go into business but in fact these are reasons they should go into business for themselves.
How often have you heard; there is so much competition in the business I want to start. Well, the good news is that it means there is a lot of interest in that industry and that no one has carved out the market as theirs. When the competition advertises that creates interest in the industry for everyone and will help create awareness for your business. Another reason that there are a lot of competitors is that no one has solved the customer’s needs to the customer’s satisfaction. This allows you to create an opportunity to better fit the customer’s needs, whether it be personalized service or your ability to move quickly to meet their needs without going through a series of steps.
Or you have heard that going into a business is risky. There is always risk in everything you do but you need to remember that if you have a good plan, solid financial resources, have professional and personal support, you are open to ideas, have the willingness to learn, are flexible in your efforts, if you have focus and the desire, drive and discipline to work the business you can be successful.
I am not certain that I am qualified to own a business? None of us are experts in every aspect of the business; that is why there is so much business support available in today’s market. There are business organizations, clubs, coaches, consultants, books, seminars, schools and if you have employees, they have accumulated knowledge to help you with your business.
I am sure you have been told or you knew someone who had failed or it is simply a bad idea. There will always be those who will tell you that it won’t work, but they are one’s who will not try. Thomas Edison had many failures, but he kept going. His innovations have impacted every part of our life. Akio Morita and Masaru Ibuka started a company to make rice cookers, they never sold one-the idea didn’t work. Decided to make tape recorders, then transistor radios, televisions, stereos; the company is Sony. Dick Schultz had an electronics store that was struggling, ready to go out of business, was on credit hold. A tornado destroyed one of the locations which made him change the way he did business. In his home market was the largest consumer electronics firm in the US, Schaak Electronics with over 100 locations nationally, they are out of business. Two other large consumer electronics stores, Highland and Circuit City, came into the market, they are out of business. The name of his company, Best Buy.
There will always be reasons why you can’t, you can live in fear or ignore them and create atmosphere of success.
There are 4 ways to get into your own business.
1) If you are lucky enough you can inherit a business from your relatives or friends.
2) You can purchase an existing business from someone who is getting out of the business.
3) You can start your own business from scratch.
4) Or you can invest in a Franchise.
So how do I start? There are a lot of questions you will need to answer to determine if self-employment is right for you. We will address these as we go along to help you determine your which is best way for you. You may even determine that self-employment is not right for you.
What kind of business should I get into? Should I look at a business type where I am currently employed or should I consider a business where I have an interest or hobby? To answer this question you will need to determine what are your goals, needs and expectations. What is the lifestyle that you wish to live, how much income will I need to support my lifestyle, do I want to build equity and create wealth for my family?
The money question, how much is it going to cost and where do I find the money to get started? The amount of investment will be determined by the type of business. If you are looking at retail you have to consider inventory, POS, CRM, advertising and promotion drivers, employees, compensation, building expenses to name a few. If you look at home based opportunities your investment will be less. In between you have office/industrial park opportunities where you do have building expenses which are less than retail, because they are “service” based concepts with high gross margins.
There are many ways to “find” money. There are venture capitalists (normally for innovative, high tech opportunities with risk), angel investors (family and friends), banks and lending institutions who may offer SBA and Heloc’s. You may also have savings, whole life insurance, stocks, bonds, or a 401-K (that you may be able to rollover to start your own company).
Today there is resource material everywhere. There are magazines specifically written on entrepreneurship, newspaper articles on small business, TV shows enticing you to go into business for yourself, radio talk shows, how to books on getting started and the internet that will provide access to and about business opportunities. You can go to the library, local business clubs, contact the government to find help. At any given time you will be able to find a number of resources; but will they provide you the correct information to assist and guide you to make the right decision for you and your family?
So you will start to look for a business that will meet your interests. You will look for those opportunities that will utilize your skills, knowledge and talent, help you capitalize on your own resources. You want to find that opportunity that will help you reach your goals, both personal and professional, help you meet your needs and fulfill your expectations. But not many will do a combination of all of those. Now what are you going to do? More research.
There are many people who will come to your aid to help you with research. There are brokers and consultants who can show you opportunities but can they assist and guide you to find the clarity in what business will be right for you? Brokers represent the business that is for sale; consultants will do the work for a fee and tell you which opportunity is best. A business coach works for you, the client; they are a NO Cost NO obligation resource. The Coach will assist and guide you through the experience with an inside out approach to find that opportunity that will provide you with the income to support your lifestyle, help you create wealth and build equity in your portfolio. Because the coach works for you, they have your best interest in mind, whether it the outcome is self-employment or staying in the job market.
You have developed and honed your skills, you have accumulated knowledge and expertise in business; you have used your talents to help someone else accumulate wealth. Why not use what you have developed and honed for your own opportunity, because you owe it to yourself.
So let’s look at your options.
You probably have a good idea of how each of these opportunities will work for you to get into business.
If you purchase an existing business, this is normally through a broker, you will need to do due diligence, ability to understand P&L’s, evaluate the client list, learn about their culture, see if there are loans and liens against the business, inventory value and integrity, accounts payable, receivables, there are many things to evaluate to determine the value of the opportunity.
If you start from scratch you will need to create your own business plans, develop marketing strategies and tactics, create processes, establish systems, develop support mechanisms, define your ideal client and create market analysis to determine the feasibility.
If you are looking for a business that is established, has systems, knows its customers then franchising is for you. Because franchising is so often misunderstood we will look at it in a little more detail at another time.
We have taken a short look at different ways one can go into business for themselves, which road do you wish to take? If you have the drive, determination and discipline to be successful then you should look at being an entrepreneur. If you have concerns about your ability then perhaps it is best to stay in the job market. For those of you who wish to take the step into self-employment, you have to determine whether you want to be in charge, not afraid to take chances, are innovative and creative, start your own business. If are risk adverse, enjoy being part of a group, you can follow a system, you would rather work on the business versus working in it, Franchising is right for you.