How To Write A Business Plan
by Ty Freyvogel
Coming soon
Homework Helpers: Research To Do Before You Launch
by Ty Freyvogel
Starting a business can be a little like peering out the door of the airplane before you jump. Its uncertain, scary territory and you can’t be sure if your parachute will open until you’re already in the air. But take heart. The fact that you are courageous enough to risk the entrepreneurial leap already speaks volumes about your character. Just be aware that bravery and ambition alone aren’t enough to pull you through. You wouldn’t expect an actor to perform the role of Hamlet without first rehearsing the role, would you? Likewise, you cannot launch your dream business without first preparing your course of action. You must do your homework!
If
you’ve read some of the other articles on my
website, you may already know about my own big mistake:
I once joined a venture solely because the business
model fit perfectly with my previous experience. I
figured because I had succeeded once in a multiple
location service business, naturally I could do it
again. So I bought an automobile service-related franchise.
But because I hadn’t researched this company in particular, and the automobile industry in general, I had no idea that new
technology in carburetors would soon make the need
for our business obsolete. Our profits plummeted and
needless to say, the company failed.
Get my point? Had I done adequate research on the business I would have seen the technological advances in the works and known how risky this potential venture would be. Don’t make the mistake I made. You must learn everything about your future business in order to keep it afloat, and even after all of your research, you will still stumble upon surprises. You cannot be too prepared! Keep reading and I will teach you how to do all the research you need to make sure that your business is a successful one.
Make
absolutely certain there is a market for your business. Unless your company fills a need in the community—whether
it’s a literal geographic location or an international
market niche—your efforts will be wasted. You
don’t want to put a kosher food mart in an area
without a Jewish population and you don’t want
to sell widgets to an industry in which widgets are
on the brink of obsolescence! Determine who
your target clients are and then determine whether
or not your business will attract them. For
example, if you want to sell a consumer product, go
to a busy shopping mall and pass out samples of your
product and note how the people respond. Poll these
people about whether or not they would visit your
establishment based on their current lifestyle, finances,
and interests. You can never be too informed about
who your customers are. Plus getting to know them
will help ensure that they remember you when your
company is up and running.
Ignorance is not bliss. What you don’t know can kill your company. As
I previously mentioned, not knowing enough about the
field you are getting into can be a fatal mistake.
Do as much research as you can before you dive in.
Subscribe to industry magazines and talk to other
business owners in the same field. You might even
try to be an apprentice or get an internship before
you take the plunge so you can be absolutely certain
you know what you’re getting into. You can’t
know too much about your future profession. Take your
research seriously. You’ll be glad you did when
the profits start rolling in.
Start looking for your money
source. Though it sounds like I am stating
the obvious, starting a business takes lots of money,
so you must either start saving your pennies or find
an investor. Sometimes you actually can fund your
business by your self. Countless entrepreneurs who
have gained thousands, if not millions, in capital
started out with only a few thousand dollars and were
able to make it grow. But for those of you who need
more money than the average Joe has lying around,
an investor is the way to go. Don’t worry: if
your product is good enough and fulfills a need, chances
are you can find someone to support it—an angel
investor, a partner or even a wealthy family member.
If you believe in your product, someone else out there
with deep pockets will believe too.
Consider finding a partner. You may underestimate just how much work is involved
in starting your own business. Understand that for
the first several months you will be working nonstop
and playing the “catch up” game. Having
a partner can remove much of the responsibility burden
from your shoulders and keep you from becoming too
overwhelmed. He will provide another logical voice
and an able body to help you make decisions and carry
out tasks. One partner, other than yourself, is ideal
and you should never have more than two partners.
Businesses operated by more than three people will
be difficult to run because there will be too many
ideas, too many disputes, and too many egos to deal
with. So find a person with similar short and long-term
goals and get to work to make your summertime lemonade
stand a reality.
Build a business plan. This handy blueprint of the steps you will take doesn’t
just outline your entrepreneurial aims for your own
benefit. It also will help potential investors or
“angels” envision your goals. A business
plan shows angels how serious you are and gives them
an exact idea of the brilliant products their money
is going to help create. For instructions on how to
make a business plan, please read the article on this
website titled Step 1: How to Write a Business
Plan.
Don’t assume that one
formula works for all businesses. This is
another lesson I learned the hard way. There are countless
ways to become successful in opening a new business.
A million different methods bring people financial
success every day. Unfortunately, not all formulas
work for all companies. You would never start up a
franchise bookstore the same way you would start up
your own makeup line. If you are confused, show your
business plan to a mentor who already has a similar
enterprise up and running. Successful people love
to talk about their success, so cash in on this opportunity.
You will come away very well educated and hopefully
inspired as well.
Think
about your “store hours” before you hang
your shingle. Take some time to consider
the kind of hours you intend to keep for your business.
If you work in a field that serves the public and
you are open 70 hours a week, understand that you
will spend 70 plus hours a week keeping the customers
happy. The restaurant business is a perfect example.
Owners who also manage (and if you’re just starting
out, this means you) spend the majority of
their time on site, dealing with customers and employees.
(And chances are, when they’re not at the restaurant,
they’re worrying about what disasters might
be unfolding in their absence!) Add to this hectic
workweek the additional time it will take you to do
the other behind the scene “housekeeping”
(bills, taxes, restocking, etc) and you will realize
that you have no time for rest, fun, and family.
If you plan to eat, breathe and sleep your work, perhaps it’s okay to hang an “Open 24 Hours!” sign (literal or metaphorical) outside your place of business. Otherwise, it may be better to have your shop hours set up in a nine-to-five format. One of my favorite sayings is “If you don’t run your business, it will run you!” By establishing manageable hours of operation, you will save yourself countless hours of stress and anxiety just trying to get it all done.
I hope you are not too overwhelmed by the steps it takes to start a company from the ground up. My intention is to prepare you so you will know exactly how much energy you will need to put into your dream. The work is hard, but also very fulfilling. In just six months time, you can easily complete the above checklist and be well enough informed to start your project.
And finally, may I mention that no matter what your goal is, make sure you are fired with passion for it. Remember that you will be spending your days and nights investing in this business. It should be something that fills you with curiosity, joy, and excitement. You are now ready to begin your research, so sharpen your pencil and your wits and go learn about your dream.
The Right Field for You? Five Ways to be Sure
by Ty Freyvogel
The freedom of entrepreneurship is a double-edged sword. On one hand, you get to do everything on your own terms and in your own way. You’re on your own . . . yaay! On the other hand, well . . . you’re on your own. (Yikes!) It’s up to you (and only you) to make enough money for the business to survive. It’s up to you to find customers and keep them. It’s up to you to pay off that start-up loan. Everything is riding on your shoulders, on your drive and determination to be a success. And that’s why choosing the right field for you is so very vital.
I know all too well the importance of choosing the right field. Why? Because I have made the mistake of choosing the wrong one. Once upon a time, I went into an auto service industry. I bought the franchise because the business model was familiar to me. I had experience in multiple location service businesses, so I felt this was a natural. Wrong! Turns out, I knew nothing about tuning up cars. Worse yet, I really didn’t care about the tune up business. But I convinced myself I could learn to like it.
I soon found out that I couldn’t. I wasn’t passionate about that particular industry or company. And because of my lack of interest, I didn’t do proper “due diligence” on the future of the industry before jumping in.
Little did I know, that within five years the U.S. Government would force automobile makers to make energy efficient cars. Those new cars had bright yellow spark plugs that now lasted for the life of the vehicle. And those new cars also were fuel injected, which eliminated carburetors altogether, which just happened to be our most profitable product.
What you don’t know about something can kill your business, if not your future. Here are five ways you know you are choosing the right field for you:
You
jump out of bed ready to work. If you’re
not passionate about your field, eventually you’re
going to make a mistake. As with my case, your lack
of interest might cause you to overlook some major
stumbling block lying in wait for your fledgling company.
But even if you don’t commit a major business
faux pas, without a passion for your field, you won’t
have the get-up-and-go attitude you need to be successful.
And if you aren’t enjoying what you are doing,
you are forgetting why you got into entrepreneurship
in the first place: doing what you want to do, not
what you feel you have to do. Every morning, you should
be jumping out of bed excited and ready to start the
day. If you can’t honestly say that about the
venture you’re considering, don’t do it.
You’re in it for the work,
not just the money. I’m sure when you
were planning out your business, you found yourself
daydreaming (at least for a couple minutes) about
all of the potential riches you would earn when it
became a success. But simply wanting your business
to succeed is not good enough. Not by a long shot.
You will have to work at it, and work hard. In fact,
you will have to spend hours and hours grueling away
to make it a success. So, you’d better love
what you are doing more than what you’re putting
in your pocket. You will know you’ve chosen
the right field if, on a day-to-day basis, you look
more forward to the work ahead of you than the payoff
you expect in the future.
It
fits your basic personality. If you’re
a quiet, introspective sort who loves to cook, you
might think opening a restaurant is the ideal venture
for you. But actually, the day-to-day world of a restaurant
owner—hiring employees, working with food vendors,
greeting patrons—is more suited for gregarious,
“people person” types. (Perhaps your gourmet
chef tendencies are better satisfied through cooking
for your family and friends!) Make sure you have a
good grasp on what the reality of the field is like.
Be honest with yourself. Most, if not all, entrepreneurial
ventures will involve lots of interaction with people,
so if you prefer toiling alone, better stick to a
one-man (or woman) field like writing, designing or
accounting.
It feels meaningful. You are going to be spending a lot of time getting
your new business off the ground. And chances are
in the first few years of the business, you won’t
be turning much of a profit, so you will need to feel
like all of that hard work is getting rewarded in
some other way. If the product, service, or activity
you are providing has meaning to you, it won’t
matter that you aren’t bringing in tons of money.
Providing your customers with a product, service,
or activity that you believe in will bring you an
immense amount of satisfaction. If you don’t
feel that satisfaction, you should consider another
field.
It benefits humanity. You may not place humanity on the top of the list
of things you should consider when you are developing
the plan for your new business. But maybe you should.
If you start a company that services radiology equipment
for hospitals, you are indirectly responsible for
diagnosing life-threatening medical conditions when
they’re still curable. You can say to yourself,
“I help save people’s lives.” Sounds
a lot better than, “I oversee a bunch of machine
repair people.” Best of all, it’s true!
You’d be surprised how much it can help at the
end of long day to look back and consider whether
or not you have done something that has helped people
(or even just one person). It could be the force that
keeps you motivated while you work to get the business
off the ground.
Remember, everyone is excited at the beginning of their new business. It’s when the initial excitement wears off that you will need to truly love what you are doing. If that passion isn’t there, you may not have the determination you need to get your business through the various bumps in the road. Before you jump into anything, take the time to do a self-examination to ensure that you and your field are a good fit . . . and that you’re getting into the business for all of the right reasons.
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