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Starting Your Own Business
So you want to start a business - congratulations! Some of the
largest fortunes belong to people just like you: people who had
a vision, the ability to set things in motion, and the drive to
follow through with their plans. Whether your business is
wholesale, retail, service, bricks-and-mortar or Internet based,
whether your idea is to maintain a single location or your dream
is to take your business global, if you have the right product
or idea and are willing to work hard, a fortune could await you.
That's the good news. The bad news is, just because you possess
the vision and are filled with entrepreneurial spirit doesn't
mean that your business will be a moneymaker. Fully half of the
businesses started each year never see their first anniversary,
and some estimates put the number of businesses that fail in the
first five years at over 80%. In some cases, of course, these
failures are due to simple bad luck: wrong place at the wrong
time, an idea that is just beaten to the marketplace by a
competitor, natural disasters, etc. In many cases, however,
businesses fail for one simple reason: poor planning.
Competition for consumer and business spending is more fierce
then ever. The same holds true in the international marketplace.
Failure to adequately prepare your business - both before and
after it is actually started - for the challenges that the
marketplace will throw at you can spell disaster. While there
are dozens of things that you need to have in place when
starting a business - whatever the size - there are three key
areas in which many of the businesses that fail shortly after
inception all fall short. 1. The Business Plan: A business plan
is a resume for your business. If you want to get a job, you
have to have a resume. If you want to attract investors or
partners to your business, you need to have a professional
properly formatted business plan that presents not only the
basics of your business and its potential markets, but also the
state of your business at its inception, as well as reasonable
projections for three and five years down the road. The business
plan allows potential investors/partners to get a quick and
manageable idea of what it is you are asking them to invest
their money in as well as providing you, the entrepreneur, with
a roadmap for the future. 2. Start-up Capital: Perhaps the most
common - and the most avoidable - cause of new business failure
is inadequate start-up capital. All too often, start-up
businesses look at the minimum amount of capital it will take to
get them off and running, without looking at the broader
picture. In fact, even the most successful start-up businesses
can operate in the red anywhere from 3 to 9 months, and many
only start generating significant revenues after a year or more
of operation. During this "lean" time, cash reserves are
essential to keep your business functioning. Determining, and
then obtaining, an adequate level of start-up funding is crucial
to the overall success of any business. 3. Market Research:
Understanding your product or service is only half the road to
success - the other half is identifying who needs what you have
to sell, and understanding the best way to sell it to them.
Identifying and appealing to your customer base - be it consumer
or business - and completely understanding who your competitors
are and how they operate is crucial to the success for your
business. For many businesses, market research can be the most
challenging and daunting aspect of the entire start-up process,
but it remains a major component to your business's success.
With the above three components in mind, here are the areas I
suggest you should focus on to maximize your chances of success.
Doing so helped me grow my company $2 million and four
professional staff members in just three years. * Know what it
is you have to offer (this should be clear and easily understood
by potential clients) and what your clients will pay for, not
just what they need. EXAMPLE: I know my American clients need to
earn a certain portion of their revenue from international
sales. * Have a clear plan--usually a business plan--with
defined success and failure markers. Use these markers to
recheck your assumptions. EXAMPLE: Regular checks led me to
switch my focus from clients in publishing to those in
manufacturing. * Examine your business objectively and not
personally. Your goal is to make money, not prove how smart you
are. * Know your strengths and weaknesses, and adjust
accordingly. EXAMPLE: I knew my strength was reading people and
not numbers; I therefore hired a good numbers guy as a
consultant to help me out.
Whether you intend for your business to remain domestic or your
plans are to go global, the above principles apply. In the
international market a broader spectrum of challenges await the
new business and in many cases you would do well to know your
market and your product.
Author Bio: Steve McLaughlin founded Global Market Insights,
with offices in Europe and the U.S., with his vision of giving
clients two synergistic competencies: knowledge of the global
marketplace and industry expertise in manufacturing, finance and
information technology. Steve has over twelve years of
international experience in three continents, having started in
executive search as a Beckett-Rogers Associate. Steve is a
graduate of Rice University, where he was student body
president, and completed post-graduate studies in International
Economics at the Universidad Mayor, Santiago, Chile.
About the author:
Great ideas for starting your won business.