QUESTION: I have dreamed about starting my own business, but am unsure of the best way to go about it. Can you offer any insights?
ANSWER: The first steps for creating a successful business involve planning, research and more planning.
Running a business is different from working for one.
Ask yourself, “Can I be my own boss?” Try to objectively assess the pros and cons.
Every responsibility — sales, marketing, bookkeeping, taxes, insurance, locating office space — falls on your shoulders as a business owner.
To begin, construct a written business plan. This is a living document that enables you to conceptualize your dream, chart your course of action, and set short- and intermediate-term goals, all without spending a dime.
You will need a clear idea of how much money you need to get started and how much you will be able to make, after expenses.
The business plan includes cash flow and sales projections as well as a projected profit and loss statement for your first year of operation.
There is no substitute for experience, so talk to other small-business owners who are in the same line of business you are considering.
Find out how they got started, what mistakes they made and what they would do differently if they could start over again.
Here are some areas of inquiry to help you explore the marketability of your product or service:
- Consider whether the business offers a new solution to an old problem or complements an emerging trend.
- Have a clear picture of your target market. These are people or companies that are likely to want or need what your business has to offer.
- Identify the percentage of market share that is possible for you to capture. The more competition you have, the lower your margins will be.
- Consider how realistic is your pricing model. Can you present your product or service to potential customers so that it appears to be a good value while still affording you a reasonable profit?
- Make planning an ongoing effort. Refer to and update your business plan as market conditions change.
In today’s fast-paced business climate, your entrepreneurial plans may have to take a back seat to other developments in your life. Always put your family’s financial security first.
If a good job opportunity arises, it may be best to take it and put your dreams aside for a while, but don’t abandon them completely.
Many successful small businesses have started as part-time ventures, enabling their owners to eventually shed the worries of working for someone else with no guarantee of job security.
Gray Poehler is a volunteer with the Richmond Chapter of SCORE, Counselors to America’s Small Business. To ask a question or request free and confidential business counseling, go to Richmond.score.org/mentors. Learn more about SCORE’s workshops on the website or by calling (804) 350-3569.