How to start your own business

How to Start your Own Business

Have you ever seen an business opportunity infomercial? I saw one a while ago that was a classic. The product was set against a backdrop of cascading dollar bills (literally money flowing over the equipment). The voice over said something like “want to work less and get rich? – call now!”. In essence they were saying that if you bought their machine you could stop working for a living and easily get rich.

You’re likely not surprised to learn that it doesn’t work that way. At first, starting your own business involves more work not less, money paid out rather than taken in and a steep learning curve. In return you can look forward to earning every dime to which you are entitled, being able to direct your destiny and never having to worry about “the boss”.

I have an expression (at least I think that it’s mine) that goes “Most people want to be successful, few are willing to be successful”. If you want to work hard and sacrifice to get what you want – if you’re willing to be successful – the following will put you on the path to owning your own business.

A successful small business is built at the convergence of a market need and an ability to meet that need. In other words, you need to find something that you do well (and hopefully enjoy doing) that others are willing to buy. Two simple steps to do that, the first:

1. Identify a product or service that you can produce. You may have a business in mind. If so, skip this step. If not, ask yourself the following questions:

a. Do your present job skills lend themselves to “side work”. If yes, you can start by developing a business “on the side” while still collecting a regular paycheck. If not;

b. Can your present line of work (or one that you want to be in) be produced by a small business? If not;

c. Do you have capital to invest? If yes, you can look for a franchise to purchase. Franchisors are in the business of starting and guiding small businesses. Entrepreneur Magazine publishes an annual list of the “Top 500″ franchisors, it is available online: 500 Franchisors.

If not:

d. Take a sheet of paper and draw a line down the center. On the left list anything that you can do (as ordinary as “mowing lawns” to as complex as “designing rocket motors”) and anything that you would like to learn to do. Obviously, only list those things that is or could be a saleable skill. On the right side put the types of businesses that use the skills from the left side of the sheet. The right side of the sheet is your “universe” of potential businesses.

Once you’ve identified something that you want to do you need to identify whether it is something that you can reasonably expect to do profitably. The old saw “If you fail to plan, you plan to fail” was never more true than when starting a business. Success demands a clear and articulated vision of the challenges and opportunities to come. Common sense dictates that you understand the ingredients for success before you commit time and money to your project. Lenders, investors and other stakeholders depend on your ability to chart the course to victory and they’ll want to see your proposed course in writing. Step two:

2. Create a business plan. A business plan is a written proposal. It describes your business and it’s environment and forecasts it’s future. More importantly, the process of creating a business plan identifies the challenges and opportunities to come and details the key result areas for success. It determines how much money you’ll need and where it will be found. With a business plan you are prepared to win. Without one, you are “flying blind”.

While there are many ways to create a business plan, we think that the best way is to use our business plan software, FundablePlans. It walks you through the process, does all of the financial calculations, compiles the plan for you, allows you to include graphics and includes both online help with your plan as well as help from our consultants (not customer service reps, people who write business plans professionally). It costs $40, more information, here.

Starting your own business can be exciting, challenging and rewarding. Finding the place where market need intersects with your abilities is the first step towards success. A business plan is the tool to help you take that first step.

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