Most new business owners who succeed have
planned for every phase of their success. Thomas Edison, the great American
inventor, once said, “Genius is 1 percent inspiration and 99 percent
perspiration.” That same philosophy also applies to starting a business.
First, you’ll need to generate a little bit
of perspiration deciding whether you’re the right type of person to start your
own business.
IS
ENTREPRENEURSHIP FOR
YOU?
There is simply no way to eliminate all the
risks associated with starting a small business, but you can improve your
chances of success with good planning, preparation and insight. Start by
evaluating your strengths and weaknesses as a potential owner and manager of a
small business. Carefully consider each of the following questions:
•
Are you a self-starter? It
will be entirely up to you to develop projects, organize your time, and follow
through on details.
•
How well do you get along with
different personalities? Business owners need to develop working
relationships with a variety of people including customers, vendors, staff,
bankers, employees and professionals such as lawyers, accountants, or consultants.
Can you deal with a demanding client, an unreliable vendor, or a cranky
receptionist if your business interests demand it?
•
How good are you at making
decisions? Small business owners are required to make decisions constantly –
often quickly, independently, and under pressure.
•
Do you have the physical and
emotional stamina to run a business? Business ownership can
be exciting, but it’s also a lot of work. Can you face six or seven 12–hour
workdays every week?
•
How well do you plan and
organize? Research indicates that poor planning is responsible for most
business failures. Good organization — of financials, inventory, schedules, and
production — can help you avoid many pitfalls.
•
Is your drive strong enough? Running
a business can wear you down emotionally. Some business owners burn out quickly
from having to carry all the responsibility for the success of their business
on their own shoulders. Strong motivation will help you survive slowdowns and
periods of burnout.
• How will the business affect your family? The
first few years of business start-up can be hard on family life. It’s important
for family members to know what to expect and for you to be able to trust that
they will support you during this time. There also may be financial
difficulties until the business becomes profitable, which could take months or
years. You may have to adjust to a lower standard of living or put family
assets at risk.
Once you’ve answered these questions, you
should consider what type of business you want to start. Businesses can include
franchises, at-home businesses, online businesses, brick-and-mortar stores or
any combination of those.
FRANCHISING
There are more than 3,000 business
franchises. The challenge is to decide on one that both interests you and is a
good investment. Many franchising experts suggest that you comparison shop by
looking at multiple franchise opportunities before deciding on the one that’s
right for you.
Some of the things you should look at when
evaluating a franchise: historical profitability, effective financial
management and other controls, a good image, integrity and commitment, and a
successful industry.
In the simplest form of franchising, while
you own the business, its operation is governed by the terms of the franchise
agreement. For many, this is the chief benefit for franchising. You are able to
capitalize on a business format, trade name, trademark and/or support system
provided by the franchisor. But you operate as an independent contractor with
the ability to make a profit or sustain a loss commensurate with your
ownership.
If you are concerned about starting an
independent business venture, then franchising may be an option for you.
Remember that hard work, dedication and sacrifice are key elements in the
success of any business venture, including a franchise.
Visit www.sba.gov/franchise for
more information.
HOME-BASED
BUSINESSES
Going to work used to mean traveling from
home to a plant, store or office. Today, many people do some or all their work
at home.
Getting Started
Before diving headfirst into a home-based
business, you must know why you are doing it. To succeed, your business must be
based on something greater than a desire to be your own boss. You must plan and
make improvements and adjustments along the road.
Working under the same roof where your family
lives may not prove to be as easy as it seems. One suggestion is to set up a
separate office in your home to create a professional environment.
Ask yourself these questions:
• Can I switch from home
responsibilities to business work easily?
• Do I have the
self-discipline to maintain schedules while at home?
• Can I deal with the
isolation of working from home?
Legal Requirements
A home-based business is subject to many of
the same laws and regulations affecting other businesses.
Some general areas include:
• Zoning regulations. If
your business operates in violation of them, you could be fined or shut down.
• Product restrictions. Certain
products cannot be produced in the home. Most states outlaw home production of
fireworks, drugs, poisons, explosives, sanitary or medical products and toys.
Some states also prohibit home-based businesses from making food, drink or
clothing.
Be sure to consult an attorney and your local
and state departments of labor and health to find out which laws and
regulations will affect your business. Additionally, check on registration and
accounting requirements needed to open your home-based business. You may need a
work certificate or license from the state. Your business name may need to be
registered with the state. A separate business telephone and bank account are
good business practices.
Also remember, if you have employees you are
responsible for withholding income and Social-Security taxes, and for complying
with minimum wage and employee health and safety laws.
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