Small business, particularly home based businesses, are an increasingly important economic resource and now account for more than 25 percent of all new business starts.
Research indicates that first time business owners tend to launch their businesses after or during some upheaval in their lives, such as losing a job, missing significant promotion, or even divorce. They typically start businesses that build on something they're good at, creating a product or selling a service.
TALENTS REQUIRED
Professional advisers often point out, however, that it's not enough to know how to make a more efficient widget or even know how to sell it better than the next guy. The key to building a business is making money with your product or service. That calls for a wide range of business talents.
Each year, many entrepreneurs are forced to close their doors when their businesses do not succeed. Often, they are bright, talented people with excellent ideas. They simply lack management experience and the skills to make financially sound business decisions.
Business failure statistics confirm that most small-business failures are the result of poor management. If you're starting or buying a small business, you've got to be able to identify your personal management profile, then emphasize your strong suits and take steps to strengthen your weaknesses.
Whether you plan to launch a new enterprise or take over an established business, you'll have the greatest chance for success if you've got the right qualities for the job.
Five qualities are essential:
- a desire for independence
- self confidence
- commitment to hard work
- willingness to accept financial risk
- the ability to assume many tasks
HAVE YOU GOT WHAT I TAKES?
Ask yourself the following questions to determine whether you've got the right stuff to succeed as a small business owner.
1. Am I willing to risk my current job security and seniority for a chance to build my own business? Am I confident that I can carry out the plans for the business even if it takes longer than expected? Am I prepared to take time away from my family, friends, and hobbies to build the business I want?
2. Am I prepared to put my savings and financial future on the line for a business of my own? Can I cope with the risks and can I live with the possibility of failure?
3. How well prepared am I to make this business a success? Have I taken all the right steps to plan my business?
4. Am I prepared to seek help when I need it?
If you have decided that small business is for you there are steps to take to ensure your business gets the best possible start. Planning is important in every aspect of your business.
PLANNING A MUST
Factors that must be considered before you welcome your first clients include:
- location
- market and economic conditions
- competition you will have
- growth potential
- cost of goods sold
- support services required
- availability of labour and supplies
- marketing objectives
- customer profile
- pricing
- distribution
- promotion
- financing
- identification of short term and long term capital needs and possible sources
There is no sure answer to ensuring your business is a success. If you have taken the time to consider whether the many demands of small business ownership suit you and if you have planned your business carefully you will dramatically increase your chances to succeed as a business owner.
