An article, written by Marilyn Gardner of The Christian Science Monitor, was reprinted in my local newspaper. It talked about people, who are laid off from their jobs and are unable to find new ones, deciding to start their own business.
Some of the comments and suggestions in the article apply to anyone who is attempting to start a new business, whether gift related or not. Even for those of us already in business, there are “one minute wisdoms” that should make all of us think. Some of these are:
- Few people understand the dynamics and challenges of operating their own business. There is much to learn and mistakes can be expensive or even put you out of business.
- People start a business because they want the freedom of coming and going as they please. Wrong. You’ll put in more time than ever.
- If you’ve been used to a steady paycheck, you must change from having an employee mentality to an entrepreneurial mindset. You are the one who is going to be telling you what to do, when to do it, and how to do it. Your decisions will determine how much profit you end up with to pay yourself.
- Becoming profitable is usually a slow process. Of course, there are businesses that are profitable right out the door. But these are usually experienced people who understand the dynamics of building a business and are willing to put in the many hours required to make it happen.
- Deciding to go into business as a last resort is a bad reason. A good reason for starting a business is “this is something I’ve wanted to do for a long time.”
- 80% of businesses fail before Year Five and 96% fail before Year 10. Will yours be one of these statistics?
- One of the basic first steps is to define what business you are really in, who your customers are, how you’ll reach those customers, and how large your target market is. It’s not a case of “build a business and they will come.”
- Analyze your competitors–and really understand who they are. Determine what their strengths and weaknesses are. And then determine what yours are and how you can use their weaknesses and your strengths to become the best in your market.
- During an economic downturn, such as the one we are currently in, will people buy your products? Is your product something they need or a product that they can do without. Be aware, however, that people will often spend money on things that will make themselves “feel good” even in a down economy and when they may not be able to afford it. That’s human nature.
- Sacrifices in your lifestyle, personal budgets, and time will most likely be necessary. If you’re totally dependent on the income from your business, it’s more important than ever to make sure that income will be there. If not, are you willing to live a simpler lifestyle and do without some of the things you are used to.
A lot of young mothers start a business so that they can be with their children more and then discover that their business is eating into all the time they had to spend with the kids before plus even more time.
All too often, people fall in love with an idea or even with the idea of owning their own business and don’t really understand what is required for success. They fail to project their cash flow and expenses and are frequently under capitalized. They have a poor financial understanding of the potential business. You have to understand the financial needs in order to put together a business feasibility plan that works. If you are supporting yourself with your business, you have to make sure that the income will be adequate to cover your personal needs as well.
You must be passionate about your business idea but you must also be realistic. Doing the necessary research, writing a good business plan and then reviewing it and making changes as the business changes, and having adquate financial resources can make all the difference between chasing a dream and creating a lasting business success.