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Practical Advice About Becoming Your Own Boss (Not in a Late Night Infomercial Kind of Way)
Practical Advice About Becoming Your Own Boss
(Not in a late night infomercial kind of way)
By: Susan E. Wells
During 2009, accordingly to the Ewing Marion Kauffman
Foundation, an average of 558,000 new businesses, per month, were
started in the United States. It was the highest year on
record, including the peak technology boom years of 1999 and 2000
and reflects a 4% increase over 2008.
If you've been laid off or downsized and unable to find other
employment to replace your income at the level that you've
previously enjoyed, you may be considering starting your own
business. 45% of the companies on the 2009 Fortune 500
list were started during a recession. You will be in good
Among the factors that are in your favor are:
- Commercial space is available on extraordinarily good
- Talented labor is abundantly available at reasonable
- Goods and services can be found at discounted prices.
- Competition may be scarce.
While there are opportunities, be careful to fully
evaluate the business sectors to increase your chances for
success. Some essential considerations include:
- Selecting a business in one of the performing sectors is
essential. Although suffering some adverse effects, the
healthcare, senior care and information technology industries are
faring better than most industries.
- Choosing a business with a bright future is essential.
Businesses that respond to the increased niche market for "green"
or "sustainable" products or lifestyles may be an avenue to
pursue. According to The Futures Company, Americans have
adopted a new sustainability mindset. Between 2007 and 2010
alone, there was a 6% increase in people's purchases of products
based upon their belief that those products were better for the
environment. In addition, there may be federal or state
subsidies or tax credits available for "green" sectors.
- Due to the ongoing credit crunch, businesses with lower capital
requirements, such as service businesses and home-based businesses,
may be good choices.
So you've decided to start your own business! What are
your next steps?
- Due Diligence: Once you select a business to
consider pursuing, perform your due diligence. Are you the
only one who thinks it's a great idea or does there seem to be a
genuine need for the product or service you are offering in the
community in which you are offering it? Is that need already
being met by companies more established and better-capitalized than
you? If so, what improvement or unique feature are you
bringing to the table? Do you have the necessary skill set
and resources to execute your plan? If not, are you prepared
to bring in people with complementary skill sets or capital,
recognizing that you may have to give up a significant ownership
interest in the business to that? Asking the hard questions
that might discourage you from pursuing the first venture you
consider is not a negative or pessimistic approach; realistically
and objectively evaluating your proposed venture is critical.
- Prepare a Business Plan: Too often
entrepreneurs articulate a great idea and foresee its ultimate
success, but gloss over how they progress from the inception of the
great idea to implementation and success. This is when the
hard work starts. Think through the process and stages that
it will take to implement your ides. You can start with an
outline. It is important that you finish this process with
business plan that includes budgets. Without taking those
steps your great idea will be nothing but a pipe dream.
- Capital Requirements: Another area to focus on
is the amount of capital you will require for your company, as well
as at each stage of development. How will you meet those
capital needs? What are the available sources? Although
in extraordinary cases (do you hold a patent on a "better
mousetrap?") a venture capitalist or an angel investor may provide
the necessary capital for a reasonable percentage ownership of your
business, most small businesses are funded with the business
owner's own funds, together with the funds of family and
- Use Resources: There is a myriad of advisors,
consultants, non-profit agencies and others willing to assist you
in developing your business, marketing your business, developing
websites to promote your business, raising capital and for
virtually any other purpose. Some are free or low cost.
Certain Small Business Association (SBA) resources and programs are
invaluable and cost-effective. For example, the Service Core
of Retired Executives (SCORE) provides free advice and mentoring
for small businesses. If you are using a for-pay service,
seek referrals from successful friends and colleagues and trusted
advisors and fully check references from numerous clients who are
independent and have long-term experience with the advisor or
- Create Board of Advisors: Gathering a board or
network of advisors can be a tremendous asset. The more
diverse your advisors, the better. Different people bring
different experience, expertise and advice to the table, all of
which is important. The more diverse the advice, the more
advice you actually receive. You might not initially
understand what they are telling you, but they will give you good
information for free. Your accountants, attorneys, suppliers,
customers, bankers and realtors may be good
- Listen: Listening, rather than talking, is
crucial. You cannot learn anything new by talking. The
more you listen - truly hear someone's advice or idea - rather than
immediately discounting or discrediting it, the more advice you
Starting your own business can be a frightening
prospect. However, now may be the perfect opportunity.
Nolan Bush, the founder of both Atari and Chuck E. Cheese, said,
"The critical ingredient is getting off your butt and doing
something. It's as simple as that. A lot of people have
ideas, but there are few who decide to do something about them
now. Not tomorrow. Not next week. But today. The true
entrepreneur is a doer, not a dreamer."
About the author: Susan E. Wells is business lawyer
and a partner at the Phoenix law firm of Jaburg Wilk where she
assists both business owners
and entrepreneurs. She has extensive
experience representing both franchisees and
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