Tools for Starting Your Own Business
by Rebecca Button on January 9th, 2008
So you want to start your own business? This article looks at some of the research and advice you need to read before drafting a business plan. The discussion includes determining if entrepreneurship is for you, finding a business idea, startup tips from the U.S. Small Business Administration (SBA), and researching the market for your business concept.
The first thing is to determine if you are cut out to be an entrepreneur. In "Is Entrepreneurship for You?" the SBA presents some interesting food for thought. First, the SBA states that you have a slim chance of being successful in this endeavor, and that approximately 50% of small businesses will not succeed during the first five years of operation. In order to avoid being one of these statistics, you need to find out if you have the creativity, planning, stamina, and other skills to be a successful entrepreneur.
The SBA also cites a book by Michael Ames, who lists 8 reasons why a small business goes under: "lack of experience, insufficient capital (money), poor location, poor inventory management, over-investment in fixed assets, poor credit arrangements, personal use of business funds, and unexpected growth." Several of these ideas suggest that you need to have an idea of what you are doing before you jump feet first into doing it. For example, if you have a limited startup budget, invest your funds wisely so that you avoid "over-investment in fixed assets" and pouring money into an unprofitable location.
The second thing is to do a lot of reading in books and on the Internet. Approach the idea of starting your own business with an open mind. Now that you’ve decided to do this, it is important to do it right. Your first stop is the library. Check out some materials on starting a business and unique business ideas. Your next stop is the bookstore. Retailers like Barnes and Noble and Borders can offer you a couple shelves worth of books on new business ideas. Examples include: "The Complete Idiot’s Guide to Starting Your Own Business" by Edward Paulson and "The Complete Idiot’s Guide to Starting Your Own Restaurant" by Howard Cannon and Brian Tarcy.
The next advice that you should keep coming back to is the SBA’s amazing website. Among other features, it offers 25 free online courses. The most relevant course topics for your startup phase are their course offerings under "Starting a Business" and "Business Planning." One great title is "How to Start a Business on a Shoestring Budget" from Trump University. You can find free business advice online, and the SBA is a great place to start.
The final phase of this initial planning is to research the market for your business. If you are doing a mail-order or Internet-based business, you can work from anywhere. If you are starting a doggie daycare or an ice cream shop, you need to research a location where you can attract a steady customer base. Some people find it necessary to relocate before starting a business. Be creative and realistic. Don’t try to open a business where it makes no business sense.
Now that you’ve decided to start on this exciting path, you need to prepare for hard work and a long period before your business receives substantial profits. If starting from scratch is not for you, consider the other option of investing your capital and hard work in buying an existing business from someone else in your community.