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2008
SBC Team

Starting a Business - Part II

Posted by SBC Team Aug 18, 2008

Do I Need a Great Idea?

 

By Chris Freeburn

 

You know you want to be your own boss and run your own business. You've thought it through and asked yourself the hard questions and you are sure that being an entrepreneur is not only something that you find appealing, but something that you believe fits with your personality and work ethic. Now you need to decide what your new business will do.

 

Some entrepreneurs start off with a great idea. Maybe it's an original idea for a great invention, or software application, or even a service that no one else is providing to the public. In many cases, these people are so motivated by their idea that setting up a business to deliver on its promise is almost a natural step.

 

BlowBubbles_article.jpgNot every entrepreneur has a Big Idea first, however. Many entrepreneurs begin with the desire simply to own their own business and then decide what that business should be. Having a bold, radical idea is good-even helpful-but it isn't a requirement for becoming an entrepreneur. Many entrepreneurs get their start in well-established, almost generic types of business like dry cleaning, landscaping, or repair services.

 

So how do you find the right idea for your business?

 

Start with yourself

 

The best place to begin your search for business ideas is yourself. First, take a good look at your own skills and interests. Do you have any specific skills or work experience that could translate into a business opportunity? For example, do you possess a technical education in a particular field (electronics, computer science, or engineering, for example)? Or perhaps you worked in a company that did something you think you can do on your own. If you did and you found that education or experience rewarding, than you may wish to leverage that asset into a new business.

 

Prior educational or work experience in a given field can also provide more than just knowledge -it can give you contacts with potential customers or experts who can help you launch your business.

 

More importantly, is there something that your particularly enjoy doing? Could that activity be the basis for a new business? Debbi Fields turned her passion for baking into a multimillion-dollar cookie empire when she and her husband founded Mrs. Fields Cookies in the 1970's. It's always easier to put in long hours building a business when you genuinely enjoy the work.

 

Look around

 

Is there something you think is missing where you work or live? Maybe you've noticed that the nearest dry cleaning business is in the next town, or that there is a pressing need for local child-care or dog walking for people who work all day. You can learn a lot about what products or services people in a given area might be willing to pay for by listening to your neighbors. Is there something they continually complain about needing, or not having nearby? If so, that might be the basis for your business opportunity.

 

The franchise option

 

If you want to own your own business, but are having difficulty generating an idea on your own, you might want to consider purchasing a franchise. By buying a franchise you are purchasing the right to open a store, restaurant, or outlet of an existing, and presumably successful, business.

 

A franchise reduces some of the risk of starting a business by yourself because you are purchasing an already established brand name complete with a track record and some level of support and advice from the corporate parent. Franchises usually have chain-wide policies governing pricing, vendors, location, decoration, advertising, and employment policies. Some entrepreneurs, especially first time business owners, find it easier to have all these decisions already made for them. Additionally, many franchisors-though not all-provide training for their franchisees on the mechanics of running their business, which helps further reduce first time-business owner anxiety.

 

Thousands of franchises-in diverse industries ranging from food vendors to skin care-are available for purchase in the United States and Canada.

 

However, owning a franchise isn't for everyone. While some business owners like having the details of their décor, prices, and products dictated by a corporate parent, others chafe under the restrictions. If total independence is something you crave, you may want to look for your own idea for a business.

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.

 

Dream.jpg

 

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.

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