When I was in college, I found a great job working for a division of the Small Business Administration. Our company offered free services to new entrepreneurs, including business plan writing and financial planning. When I first started working for the business center, I was only aware of the frantic nature of startup businesses, and I remember saying, “I will never start a business of my own.” After two and a half years of employment and after picking up some tricks of the trade, I changed my mind. If the opportunity ever arises, I think I may just take it…maybe.
I absorbed a lot of what went on in the world of business startups, including a few trends. There were certain elements that made some clients successful and others unsuccessful. In this article, I have shared three of the lessons I learned. Fortunately for me, these lessons were learned by watching others and not failing in a business venture myself.
Do you have a great idea for a business? An idea that no one’s ever thought of, one that could revolutionize a service, a product, or an industry? If it is not in demand, it doesn’t matter. This lesson was one of the hardest for our clients to learn. They could not grasp how their business could be unsuccessful when the logic was sound, when there was truly a need for their product or service. We had to explain that “need” in their minds was different than “demand” in consumers’ minds. If the consumers don’t want to buy it, the business won’t be successful (no matter how great the idea is). More importantly is the notion of sustained demand. You can’t predict the future or guarantee that your product or service will always be in demand, but you can weed out the ideas that are just trendy or fads.
Unless you are independently wealthy (in which case, you probably wouldn’t need to start this new business), you need a source of funding. Can you get it? There are many ways to finance a startup, whether you apply for loans or grants or you work with venture capitalists. If you are a woman or a minority, there may be additional funding options for you in the form of grants (which are wonderful because you don’t have to pay these back like you do with loans).The best way to present yourself as a profitable business venture to a lender is to have a well-written business plan.
Do you have a business plan? Not just in your head, but a well-written, documented plan that includes all of the pertinent details of your business? A well-written business plan is imperative if you want to establish credibility and receive funding. If you hate to write, never fear. You can go to the Small Business Administration office in your area and they can help you write your business plan for free.
Of course, there are many additional issues to consider when starting a business, including ownership (sole proprietorship, corporation, etc), marketing, location, etc, but these three tips will get you off to a good start.