Starting A Business

Keeping It Real

CommunityTeam — Fri, 05 Jun 2009 17:10:00 GMT

Tailoring your goals and expectations to reality will help you succeed

By Max Berry

A certain amount of ambition is necessary when running your own business. If you aren't expecting a lot from your idea and yourself, it will be hard to deliver much to your customers. But at what point does ambition become a hindrance? If your expectations are too high for one person-or one business-to meet, they may be doing more to hold you back than push you on. Dreams of glory are healthy, but so is the understanding that every race is run one step at a time.

Pace yourself
"There is something rewarding about crossing things off a list," says Duncan Brodie, director of UK leadership development company Goals and Achievements (goalsandachievements.co.uk), "but there is also something rewarding about not putting so much on the list that you set yourself up for failure. The bottom line is that you have twenty-four hours in a day."

Some of us are list-makers and some of us aren't, but a great many of us do our best work under pressure. Approaching a project with the belief that stakes are high and success is imperative can galvanize everyone around you. But without a measured perspective on just how much quality work can be crammed into one day, that galvanizing pressure can quickly give way to a whole lot of stress. "Ultimately, if you don't manage expectations well, you'll become stressed out, you'll lose focus, and you'll start doing substandard work," says Brodie.

Rather than placing all your focus on achieving one goal as quickly as possible, Brodie recommends taking the long view. "There is a difference between one-time wins and losses and running a long term business, achieving sustainability," he says.

Whether you're hoping to run it until you retire or take it public and cash out young, try seeing your business as an evolving enterprise. It is unlikely that one great quarter or one successful project will turn your company into a Fortune 500 sensation overnight, but it may put you on the path to a wider array of clients and more brand awareness. These are both great achievements for any business owner, and meeting either should be seen as a success, whether they're your ultimate goals or incremental steps on your path to something more.

The eyes of others
The most difficult expectations to manage are often the ones that others place on you. Chances are that neither your employees nor your clients expect you to be a superhero, but people aren't always upfront about their expectations, which is why you need to be proactive about discussing them.

"You need clarity with the client," says Brodie. "Ask them questions: ‘What do you want to happen by the end of the project? What do you want to be different?' Clients are often vague about their expectations. It helps if you can give them clarity."

Set the tone with customers at the outset of a project. Establish an agreement and, if applicable, provide your client with a time and cost estimate. When setting a timetable for a project, be realistic. This helps not only with achieving your objective, but also in building confidence in employees and clients. If your timetable doesn't seem reasonable and grounded it may actually cause those around you to question your judgment. You want to project confidence in your abilities, but be careful not to commit yourself to more than you are capable of completing, or to completing the job in less time than you need to do it well.

This doesn't mean you can't strive to outdo yourself. "The reality is, subconsciously, most small business owners will go the extra mile to make the project a success," says Brodie. "They want that relationship to be long term. Surprise [clients] a little bit by giving extra."

As you carry out the steps of a project, provide progress reports to the client and meet frequently with employees to discuss how you're all measuring up to your own expectations. When the project is completed, ask for feedback. Maintaining a dialogue even after the job is done builds trust and encourages future business.

Handling the inevitable
No matter how well you manage your expectations and those of the people around, there will be moments when you wind up frustrated that you couldn't do more. Nobody with high standards will feel like they passed with flying colors every time. The key is to take the disappointment in stride, and to have a support system in place. "For self-preservation, it's important that you've got someone to speak to, someone you can use as a sounding board," says Brodie. Chances are that if you confide your frustrations in someone else, they'll tell you what you probably knew along: that if you never got frustrated that you couldn't do just a little bit more, you'd probably never achieve much either.

Bearing that in mind, it gets easier to see the value of the occasional disappointment. "Think about what you have, in fact, achieved and use your setbacks as opportunities to learn," advises Brodie. "When things don't go well, you can often learn more than if they go perfectly."

Business Plans

SBOCTeam — Fri, 19 Sep 2008 17:21:00 GMT

Do I Need One? How Do I Go About It?

By Christopher Freeburn

You're ready to take the plunge. You have a good idea for a new business. You've done the requisite soul-searching and determined that owning your own business is the thing for you. You've spent some time researching the idea and you've figured out where you will locate the business, who your customers will be and what sort of market exists for the business. Now it's time to sit down and create a real business plan.

Benefits of a business plan
There is no understating the value of having a properly written business plan. A business plan helps to clarify the challenges you will face when trying to get your business off the ground. It helps you anticipate problems and obstacles in advance and thus work out solutions before you actually run into trouble. It allows you to make a reasonable estimate of how much money you will need to get things going and to keep them going through the early days. A well-researched plan can give you a handle on how much revenue to expect and how to target your business's promotional efforts.

Business plans are not for your eyes alone, however. If you need to borrow money to get your business started, having a professional looking business plan is crucial. "You want to demonstrate to any potential lender that you are serious about your new business and that you have a good idea of what running it will entail," says Martin Lehman, counselor at the New York chapter of the Service Corps of Retired Professionals (SCORE). By providing potential lenders with a well-drafted business plan that deals honestly with potential expenses and problems and demonstrates that you have done the necessary market research, you greatly improve the chances of landing that loan.

Anatomy of a business plan
In general, most business plans follow a basic format.

Executive summary: The purpose of the executive summary is to define the business-what it does and why you are the best person to run it. The summary should be no more than a few sentences, a paragraph at most. The idea is to convey your business's basic activities as concisely as possible.

Market Research: Follow the executive summary by making a case for the viability of your business in the marketplace you've chosen. Is there enough consumer demand to keep your business going? Are there enough potential customers in the given area in which your business will operate? What are the costs of getting the business started? What sort of revenues can you expect in the first year? What will be the cost of rent, utilities, office supplies, equipment, and materials for your products or services? Are there any competing businesses similar to your own in the same area? How does your business differ from them? Government publications, industry publications, trade groups and local chambers of commerce are excellent sources of demographic and marketplace data that you can use when compiling your research. Be as realistic as possible.

Business Outline: Here you will sketch the anatomy of your business. Identify your management structure, supply chain, and operations. "Be as detailed as you can," advises Lehman. "This is the time to work out fundamental questions about how everything in your business will work." Ask yourself the basic questions. Where will your business be located? Will it be a sole proprietorship, a partnership or a corporation? Who will be the owner? Are there employees? How does it provide products or services to customers? Who are the suppliers? "Iron out ownership and decision making roles ahead of time," advises Lehman. "Who gets the final word on things? If there are other people involved in the business, this is the time to figure that out." If there are partners or employees already in place, make sure that their duties and powers are well defined.

Marketing: The business plan should make clear exactly what you are selling and how you plan to let potential customers know about your business. Detail any advertising plans and their likely cost.

Cash Flow: How much money will your business need to get started? How much revenue can you expect from operations? This is an extremely important part of the business plan, and the one that requires considerable research and attention. Try to estimate, as best you can, exactly how much it will cost to keep things going for the immediate future and how much revenue you think your business can reasonably gain. "This can be really difficult for the first time business owner," Lehman warns, "If you don't have an established track record to draw on, you are going to have to make an educated guess. This is where your market research becomes essential." Lehman says that the biggest mistake new business owners make is being too optimistic with their revenue projections while underestimating costs. "Then they find themselves stuck with higher than expected bills and too few customers and they can't afford to keep things going," he says. It's better to err on the side of pessimism when estimating costs and potential revenues. Potential lenders or investors appreciate a little pessimism in financial projections since it indicates a more realistic outlook on the part of the small business owner.

Starting A Business - Part I

SBOCTeam — Fri, 08 Aug 2008 21:14:00 GMT

Is My Personality Right for This?

By Chris Freeburn

Many people dream of being their own boss - of setting their own hours, making their own terms, and having the big office where all the important decisions are made. It's a tempting idea, one nurtured by a national culture that prizes the ideal of the rugged individual who strikes out and remakes the world according to his or her vision. And every year, tens of thousands of Americans launch their own businesses, hoping that their fledgling enterprises might someday become the next Apple or Kinko's.

But creating a new business is a demanding task. It means that you'll be the one responsible for making sure everything that needs to be done gets done - and probably doing much of that yourself, at least at first. The ability to nurture your business through its infancy will require drive, passion and commitment Most likely, it also means a seemingly unlimited number of late nights, few vacations, and constant effort dedicated to nurturing the nascent business through its perilous first few years.

The Entrepreneurial Temperament

Not everyone is cut out for that sort of effort. Nor will every personality flourish in an entrepreneurial environment. "The thing about being your own boss is that you now have to worry about all the things that the other guy who used to be your boss had to worry about," says Boston - based business consultant Jim Sheridan. "It's easy to underestimate just how much work goes into building a new business and just how much of that you'll have to shoulder by yourself as a new entrepreneur."

In addition to making the big decisions, you'll be making all the little ones, too: paying yourself and any employees, making sure the taxes are done correctly, arranging advertising, dealing with customers and clients and suppliers, taking care to see that your business is in compliance with local codes and regulations. Being the owner means the buck starts and stops with you. A sense of personal responsibility and a willingness to work very hard are essential for entrepreneurs, as is the ability to multi - task, says Sheridan. "When you start a business, you need to be able to wear a variety of hats every day," he explains. "One minute, you're the personnel manager, dealing with your employees, the next minute you're a financial analyst looking at the balance sheet, and the next you're the marketing director planning your ad campaign."

Entrepreneurs must also be able to tolerate risk. "You'll be putting more than just time and effort into your business," Sheridan says. "You'll likely be investing your money, or someone else's." Many people use personal savings or borrow from friends and family or banks to open their own business, and a large percentage of businesses do not survive the first five years. "Not everyone is comfortable working with an uncertain income, or borrowing a lot of money when there's no guarantee of success," Sheridan says, adding, "risk - taking is part of the game."

You are your business

Owning your own business is very different from working for someone else. When the average employee leaves the office at 5 p.m., he or she leaves the job behind them and concentrates on family or the night's entertainment. That is not true for the small business owner.

Edward Paulson, author of The Complete Idiot's Guide to Starting Your Own Business, says that for the first few years, you and your new business will practically be the same entity. "There is simply no way to separate the owner from the company in the early stages. Customers write checks to the company name, but they think of themselves as doing business with the founder/owner. After all, when a company is small, there is really only one decisions matter: the owner."

Paulson notes that small business owners tend to treat their new businesses as if it were their own child at first. "Think about it;" he advises, "you will likely spend more time with your business than with your family, all the while working to improve your family's financial security." Be sure you have the commitment to devote the necessary time to building your business. Having a high level of personal energy is important.

Getting Started: Part I

akgold — Sat, 21 Jul 2007 00:33:00 GMT

Be sure to do all your homework before you take the plunge and start your own business.
By Max Berry

So you want to start your own business? Maybe you have an idea you think is so good, you believe it will be a sure-fire hit. Or perhaps you are simply sick of working for someone else and just want to strike out on your own. The first step in founding a business is to define exactly what your new business will do, in as specific terms as possible.

If you don’t have a specific idea for a business of your own, you might want to consider buying a franchise—that is, opening an outlet of an existing successful business. If you have your own idea for a business, the first thing you should do is to write that idea down on paper. You can start by writing down a general idea, and then develop it, narrowing its focus. “Too often,” says management consultant C. Davis Fogg, “people have too vague an idea about what they want to do. Just saying ‘I want to open a store,’ or ‘I want to build computers’ isn’t enough. A small business can’t be General Motors—it needs a tight focus in order to distinguish itself from the competition.”

Putting your idea on paper makes it easier to focus on the details. “There is no substitute for writing it down,” say Martin Lehman, counselor at the Service Corps for Retired Executives (score.org), which helps small business owners get their businesses off the ground. “Write down your idea, and then break it down to the smallest elements: Who exactly will be your customers? What products or services will you offer?” Be specific, Lehman advises. Write an exact description of the products or services and to whom they would appeal. “Don’t just assume ‘people’ will want whatever your business is selling—try to figure out what type of people, what age, income, gender. You need to know who your business appeals to before you can judge how it will do in the market.”

Understanding the specifics of your idea is the most important starting point for launching your business. Once you know exactly what you want your business to do, you can begin to research the mechanics of your idea. Where should you locate the business? In what geographic market will your business function? What is the competition? Is there enough consumer appetite for your products or services to keep your new business going? Has anyone else opened businesses similar to yours in the area and what happened to them? What will it cost to procure the equipment or supplies you will need? This applies to franchise operations as well. Franchises generally offer fairly specific information about costs and often have rules regarding location, advertising, and the décor of franchise outlets. Still, whether a particular franchise is a good fit for a given area and for you is something you can only determine through dedicated research.

Your research might include visiting similar businesses, or even working for one in order to gain experience in that business, if you’ve never worked in a similar field. This is particularly true in the case of a franchise. “Seeing how a particular business operates on a day-to-day basis is crucial to figuring out if you actually want to run one of your own,” says Fogg.

If you have never run a business before, or have little experience in the type of business you wish to start, you should seek out people who have and talk to them about their experiences. Their advice can alert you to difficulties you may not have anticipated and point to possible solutions.

“Before I opened my first retail store, I went to several possible locations and stood outside them all day long, just watching who passed by,” Lehman says. “That way I could see what sort of people would be walking past the store on a regular basis, and then I chose the location with the most people I thought likely to buy what was in my store.”

As you progress with your research, you can begin to create a detailed business plan. Your business plan will assemble all the information you gathered during your research and translate that data into a clearly stated outline of your business.

Max Berry is an Associate Editor/Writer for Business 24/7 Magazine.