We are all here as either aspiring, novice or seasoned entreprenuers. For those that are considering starting a business or new at this, I found some tips from the SBA that helped me to begin the process. Take a moment to read and apply the concepts to your own situation. Good Luck!
Is Entrepreneurship For You?
In business, there are no guarantees. 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, 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 startup 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 in the short-term.
Why Small Businesses Fail
Success in business is never automatic. It isn't strictly based on luck - although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees.
Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years.
In his book Small Business Management, Michael Ames gives the following reasons for small business failure:
Lack of experience
Insufficient capital (money)
Poor location
Poor inventory management
Over-investment in fixed assets
Poor credit arrangements
Personal use of business funds
Unexpected growth
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
Competition
Low sales
More Reasons Why Small Businesses Fail
These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
On the Upside
It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.
You will be your own boss.
Hard work and long hours directly benefit you, rather than increasing profits for someone else.
Earning and growth potential are far greater.
A new venture is as exciting as it is risky.
Running a business provides endless challenge and opportunities for learning.
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Awesome post. You've really touched on the most important parts of having your own business. When I tell people I work at least 10 hrs a day some days 12, they are surprised because I own my business. What you put into it, is what you're going to get out of it - stay MOTIVATED, get the KNOWLEDGE & SUPPORT you need - and you will SUCCEED!!
Great points. I also agree with some of the comments here. In addition to what you stated about planning and organizing, they are very important along with continuous implementation. Planning & implementation is imperative to a business such as business planning, strategic planning, marketing planning, operational planning, management planning & risk management.
A person really needs to know or find out if the business idea that they have is viable & really think about if they are an entrepreneur. Too many people just jump into business, they fail and wonder why they are not succeeding. That's when you have to take a step back, analyze your situation and see what you are doing wrong or what the problem is and if there is a market for your service or product.
This is a good post. These are some very good tips to consider when starting your business. I want to point out having embarked on a couple entrepreneurial endeavors that articles such as this are very general and broad in scope and speak to a majority of business start-ups. I've studied business in school, been to the SBA workshops when I was younger and once I actually began my entrepreneurial endeavors I realized that this list is only a piece of the puzzle. Being a woman and an african-american women, I can attest that these tips are not inclusive as it pertains to us.
Consider some additional point when deciding:
1. Before or while you are evaluating if entreprenuerialship is for you I would first take the time to understand what entrepreneur is and no I don 't mean by looking it up in the dictionary. I would recommend reading some books on the subject and truly learning what it is. Most small business women in particular confuse being self-employed as being an entreprenuer. I have found that being an entrepreneur is a journey not a destination. Getting this confused in the beginning can hurt you in the long run. I recommend Michael Gerber's book E-Myth Revisited.
2. Please think about your goal or the point of it all. What are you seeking to get from this? Are you simply just looking to replace your 9 to 5, get some side money are looking to create jobs for others? Journal this, talk about it, think about it, pray about it but by all means KNOW YOUR POINT!
3. Plan on how you will compensate yourself and include health insurance, life Ins, retirement especially if you are embarking on consulting.
4. Regarding failure-- my experience as an Accountant and Small business consultant has shown another important reason why businesses fail in the first 5 years. POOR RECORDKEEPING! This speaks primarily to bookkeeping, payroll, etc. That is a HUGE indicator of business success. Not the only indicator but a very important one. Most of us never consider hiring a bookkeeper or accountant from day 0 when thinking about starting a business. A good bookkeeper and/or accountant can ensure your books and records are managed correctly, help you choose the proper business structure and avoid IRS pitfalls. A GREAT accountant or bookkeeper, can offer your business proactive services such as setting up your books, helping you choose the best accounting system as well as even help you plan for your personal compensation. Additionally, they can provide ongoing tips on how to keep out the IRS radar.
I have more but hopefully these can give you some additional things to consider. I will conclude by saying nothing can truly prepare you for starting a business. It's like having a child or getting married, if you have done either or both then you know exactly what I mean ;-)
This is a great post, which is why I have decided to feature it on 'The Business', a digital magazine featuring the best Small Business discussions and material on the BBWO Network. This is a new feature, so it is still being customized and I would love your feedback. Feel free to add comments on 'The Business' page. I've been wanting to set this up for a while now, especially after reading the responses I got from my post 'Putting the Business Back in BBWO.' As our community gets bigger, it is becoming a SPAM magnet, and I want to ensure that does not happen. We are experts in our own right with tons of info and experiences to share, which is what I want BBWO to continue to be about. If you feel as I do, great! Continue writing these wonderful posts and I will do all that I can to promote you and your business.
Quick tip: If you haven't already done so, feel free to include your web banner or business details at the bottom of this post. I hope that with the new Magazine page, more traffic will be directed to your way!
This was vauable information on anyone wanting to start a business, and it was very helpful. It is good to know you can have someone to help guide you when you decide to start a business. I think it is good to learn from those as well who already have a business, becasue we can learn from then the upside and downside of having a business. I believe more and more people are looking to have their own business. I would like to know, because I want to start my business. So this was good information. Thanks
Thank you for your useful tips and advice on starting a new business and what some of the reasons are that people fail. It makes me more determined than ever to continue to strive to build my own business due to the downsizing of my corporate job over the past years. The long hours that I will have to work will be worth it because I will be working for myself and the time and energy will be to build lasting relationships to show my clients that I care about their needs and I am learning that people care less about what you know until they know how much you care and that is something that is lacking in the corporate world that I have been a part of for the past twenty years. There is no greater feeling of getting up each day to punch your own clock for your own company, owning your own power in whatever that business may be.The sacrifice and the struggles will be worth all the effort in the end because you will reap the rewards of achievment if you maintain the will and determination to make it though the long haul knowing that there was a goal and a vision set from the beginning.Nothing happens overnight and the eyes must be kept on the prize. With the tips of successful business owners who have paved the way for the ones coming afterwards victory is bound to avail. I have tried several businesses in the past and I have found for me that I have to be passionate about what I am doing and believe in my product and or service. In the corporate environment most of the folk do not even enjoy what they are doing it is just a JOB and for me that means JUST OVER BROKE!. Businesses are closing their doors both large and small alike, it behooves everyone to have a backup plan and what greater plan than to be involved in doing something that we look forward to each day to make it better than the day before.A smart entrepreneur needs to have a business plan, and as for me I appreciate meeting others that have the expertise to be able to show us how to do a business plan and the financial aspects and legal services that go along with starting a new business. I look forward to networking with others. I am hungry for all that is good coming forth from this business venture.
Replies
I can't wait to see what you've got next!
Bianca
Seven5 Seven3 Marketing Group
http://www.7573marketing.com
A person really needs to know or find out if the business idea that they have is viable & really think about if they are an entrepreneur. Too many people just jump into business, they fail and wonder why they are not succeeding. That's when you have to take a step back, analyze your situation and see what you are doing wrong or what the problem is and if there is a market for your service or product.
Consider some additional point when deciding:
1. Before or while you are evaluating if entreprenuerialship is for you I would first take the time to understand what entrepreneur is and no I don 't mean by looking it up in the dictionary. I would recommend reading some books on the subject and truly learning what it is. Most small business women in particular confuse being self-employed as being an entreprenuer. I have found that being an entrepreneur is a journey not a destination. Getting this confused in the beginning can hurt you in the long run. I recommend Michael Gerber's book E-Myth Revisited.
2. Please think about your goal or the point of it all. What are you seeking to get from this? Are you simply just looking to replace your 9 to 5, get some side money are looking to create jobs for others? Journal this, talk about it, think about it, pray about it but by all means KNOW YOUR POINT!
3. Plan on how you will compensate yourself and include health insurance, life Ins, retirement especially if you are embarking on consulting.
4. Regarding failure-- my experience as an Accountant and Small business consultant has shown another important reason why businesses fail in the first 5 years. POOR RECORDKEEPING! This speaks primarily to bookkeeping, payroll, etc. That is a HUGE indicator of business success. Not the only indicator but a very important one. Most of us never consider hiring a bookkeeper or accountant from day 0 when thinking about starting a business. A good bookkeeper and/or accountant can ensure your books and records are managed correctly, help you choose the proper business structure and avoid IRS pitfalls. A GREAT accountant or bookkeeper, can offer your business proactive services such as setting up your books, helping you choose the best accounting system as well as even help you plan for your personal compensation. Additionally, they can provide ongoing tips on how to keep out the IRS radar.
I have more but hopefully these can give you some additional things to consider. I will conclude by saying nothing can truly prepare you for starting a business. It's like having a child or getting married, if you have done either or both then you know exactly what I mean ;-)
Quick tip: If you haven't already done so, feel free to include your web banner or business details at the bottom of this post. I hope that with the new Magazine page, more traffic will be directed to your way!
Take Care,
LaShanda
This was vauable information on anyone wanting to start a business, and it was very helpful. It is good to know you can have someone to help guide you when you decide to start a business. I think it is good to learn from those as well who already have a business, becasue we can learn from then the upside and downside of having a business. I believe more and more people are looking to have their own business. I would like to know, because I want to start my business. So this was good information. Thanks
Mia
The best way to prevent failure is to plan...plan....plan....
Mittie Stephens
Business Plan Writer
http://businesssupportbymittie.net