Let's assume you are interested into starting your own business. Following are practical tips.
Successful people do have a PLAN. A plan is the desire to accomplish a certain goal. People with a plan do have a much better chance to succeed in whatever endeavor they are getting involved then those who do not plan ahead.
Once this plan or plans are ready to put into practical operation it would be wise to listen to those who already have accomplished a successful carrier. Reading books by experts in the field you wish to operate, would be a great asset. Proceeding into the unknown without proper preparation is almost sure disaster.
Those, who are driven by the lure of money alone, and without having studied the pro's and con's of a particular undertaking, are fools and are likely to fail miserable.
It is understandable to be enthusiastic about a future goal, but it is foolhearted to plow ahead without knowing the consequences. Those who are living on cloud 9, having unrealistic dreams of getting rich without specialized knowledge are living in a fools paradise. Poeple who are arrogant and behave like Madonna's mostly have a rude awakening.
There are intelligent people who are not necessarely smart. They may have a higher education but are not able to incorporate their enlightment into practical application. Some are so careless and domineering to proclaim to anyone who would listen that they will be extremely rich in no time flat. But I am not writing about Primadona's, who are at best nothing short of being fools, I would like to concentrate on those who use their and other people's experience as a starting point of their future objectives.
For those who are serious in attempting to start a new business should consider getting a number of experienced business people to provide ideas. In return be willing to offer compensation (not necessarely money) for their time and efforts on your behalf. After all, the advice you may be getting, could be priceless. Meet with your advisors as often as they are willing to spend time and effort with you. Above all, be straight forward, no monkey business. No incensire promises, no wild dreams, just down to earth discussions.
While productive criticism may be appreciated on both sides, remember that you, the beginner, is the benefactor of your friends advice.
It takes courage to enter a new field. One of the fundamental incredients of success, even in it's infant stages, is HONESTY. If you are not honest with yourself how can you be honest with your fellow people?. The percentage of failure in starting business is staggering high. A high number of fledgling enterprises are going under during the first five years of operation. There are many reasons, but again one will find that lack of knowledge and insufficient funds are the major causes of failure. Personally, I know a number of people who have failed and started over again and SUCCEEDED. I respect and marvel at the perseverance of these people who do not accept defeat. I was in business myself for many years and I feel to be qualified to speak in these matters. I started with absolutely nothing - and I mean NOTHING. With hard work, unbelievable hours and being expertise in my field, I succeeded - the hard way. It was slow going and in time I was fortunate to have people working WITH me who were of extraordinary qualities. The dedication of my employees was second to none. Of course, I have to mention that I treated them as family. Sorry, I got carried away:)
Be prepared to GIVE - by that I mean do not just receive. Show your appreciation to those who are willing to help you in whatever form you are able. Don't be selfish, people soon look through you and will abandon you like a sinking ship. Be open, speak with ONE tonque only, say what you mean and mean what you say.
One of the major incredients of success is "PERSISTANCY". After consultation(s) with those who have already proven to be efficacious in their environment you must pursue your goal by getting up in the morning full of vigor and enthusiasm. You must love what you are doing. Don't just do minimum, go beyond the absolute necessary required. Your Desire to get involved into any entrepreneurship must be sincere. It would be well advised to write down your goals on paper, revise them whenever necessary, but most of all read them first thing in the morning and the last thing at night.
You must have a realistic budget. You MUST know the approx. startup cost of your business. Estimate the approx. monetary return of your investment and don't expect to have a net profit for a long time to come. If you have unlimited money you can forget about this writing. These tips are meant for ordinary people who do have a certain knowledge and are willing to expand this knowledge into a professional business.
In order to give yourself a reasonable chance of success it should be necessary to have at least 6 - 12 months of capital which would look after your private needs (not related to your business venture). You cannot figure on having any money out of a newly established business which is used for upgrading of the business and at the same time produce living expenses.
You must have FAITH INTO YOURSELF. You must be determand to follow through with your written plan come what may. Don't get side tracked.
Be honest with yourself and with others. If asked any questions pertaining to your expertise and you do not know the answer, do not be afraid to say : "I DON'T KNOW". People will respect you for that. Only a fool knows everything. Do not fall into the trap where someone could accuse you of " being uninformed, misinformed or gravely mistaken".
I referred to that before - but believe me it is very important to be realistic in your conversations with your well meaning friends and of course with the public in general and the customers in particular. Don't make any imaginary or illusionary statements. Don't impress your friends with erroneous concepts, e.g. saying things like "I am going to put my competition out of business" or " I will be a millionair within a year". It does not only sound silly, but it is totally ridiculous.
You may wish to apply for certain Credit cards. Do not make the mistake of misstating your financial situation. In today's world there are very few secrets. All of us are listed in a number of computer systems and trying to mislead the company you apply with, could lead to a disaster. I would encourage people to be factual. It could be of help to be in personal or telephone contact with the company. Again, if one is truthful, one does not have to worry about a "BAD MEMORY".
The present business structure is such that individuals have little or no chance to establish a RETAIL business. It seems that most or all of the businesses are owned by a bigger conclomerate or are franchises. It is highly unlikely - in my humble opinion - to be successful in Retail alone. A service business - preferable some service which is needed by almost everyone - has a much better rate of success. If the zoning bylaws of your city or township allows you to run your business out of your home or shop attached to your home, you are much closer to a successful venture.
Once you are in the kind of business you have chosen, make every effort to give SERVICE to your customers BEYOND your call of duty. If you are not prepared to please the customer - justified or not - you will pay bitterly. It takes a long time for a good word to travel but only a short time to kill a small business. You should make it a rule:
Rule # 2 = IF IN DOUBT - REFER TO RULE # 1
When I am referring to "SERVICE" I mean PERSONAL service. Being in a small personal owned business you have one advantage which the heads of bigger concerns do not have. You are meeting the public and speak with them face to face. Let's compare a fictional privately owend business with a conclomerate which is National or even Inter-National. The management of the big business depends on the middle management staff for evaluation of the day to day business. The CEO of a big business has not direct contact with the public. He or she is so far removed from reality and does make decisions which have been determined by Marketing Employees and accountants. If their forecasts are good the CEO gets the Credit and of course the Shareholders will prosper. If the advice of the middle management is incorrect and there financial losses, the CEO will still get his Million $ plus bonus(es) and the employees will be fired.
Being your own boss will make you work unbelieveable hours, have all the worries - BUT THEY ARE YOUR WORRIES, all accomplishments are to your credit and all losses are your responsibility as well. However, the advantage of the little operator is that he gets to know his customers, their taste of service and they are many times listening to GOOD advice. Specially if the price is right.
I can vouch for following experience. A man who operated a music store and who met thousands of people every month had the occasion where a lady and her grand daughter wanted to buy a sheet of music. This particular sheet music was not in stock and the store owner offered to order it and have it in store within 3 days. The music retailed for 50 cents, the whole sale cost was 36 cents. There was a gross profit of 14 cents. As promised the music was in stock within the projected time. The lady picked up the sheet and remarked on the unusual service of getting such a low priced item in such a short time.
Several weeks later that very same lady ordered a piano which was approx. $ 3,000.00. She said: "I am buying from you as you have shown me that you care for little things." A few months later that same lady came back and bought a Baldwin organ in excess of $ 6,000.00. Anyone reading this may not put too much attention to this incident. But, it shows that if a person is willing to go out of his way to please a customer, the rewards can be beautiful.
Do you think that an employee of a big company would even bother to worry about such little things? Of course not, they don't get paid for thinking or even to be beneficial to the public. The management never knows how much business is being lost because employees are not knowlegable, careless or in some cases outright mentally challenged. There is a big chain in Canada which proudly proclaims to be "ALL CANADIAN". I had several occasions where I looked for an item only to be told that they are temporarely out or "why don't you look on Isle XX". I was told that they do not carry such an item, yet after going isle after isle did find it. Now I don't know if this could be blamed on the individual person's "I don't care attitude" or if it is lack of education. Of course the amount of money being paid to these people could also have an impact on their mental activity.
The point I am trying to get across is "BIGGER IS NOT ALWAYS BETTER". Big companies, which sell name brand articles, usually either have their own service people or have their after Sales services sourced out to "Service companies". In my experience, I have found that some of these people are either lacking product knowledge and/or have less than normal customer relation experience. This is one area where the individual store owner can beat the biggies any time, any day.
As to the start up capital for an individual business it may be easier to get the necessary funds from friends or relatives than from commercial, financial institutions. While the commercial loan may be harder to get the funds coming from private sources may have certain pitfalls. Never, never accept money from any private source without having a legal document drawn up by a lawyer. This is absolutely necessary to avoid any misunderstandings due to "faulthy memory" and other problems. Make absolutely sure that the terms of the loan are suitable to both parties, that they are managable and that the interest rate is FIXED. Later on, when the business is making money, one could reward one or more contributors to your business venture with a MINORITY interest in your business. However, please do not ever consider partnership - not even with your mother!!. If you feel that you are solid and can afford it, incorporate and make the contributing person a minority shareholder.
This would specially be useful if a person who works with/for you is one of the people who loaned you the start up money. Remember, a person who is a sharholder, is unlikely to steal you blind.
There could be a lot more said about starting a business, the problems associated with such a venture and of course also the rewards for your efforts.I sincerely hope that some of my tips are helping to have a good business and much happiness
November 2. 07