On any given day in America, hundreds of men and women stare at computer screens, wait tables, push mops, climb ladders, assemble widgets – in short, perform whatever tasks their jobs require — and wish they had the money … or the skills … or, most importantly, the courage … to start a business of their own.
Many never get beyond the wishing stage. But the fact that you picked up a copy of Florida Small Business says you just might. Longing to be your own boss is an important first step. Next comes a whole lot of thinking, planning and plain old-fashioned paperwork. You can succeed in business, but not, as the title of that familiar Broadway musical would have you believe, “without really trying.”
Do you have the goods?
What does it take to succeed in a business of your own? If you answered “money,” you’d be right — but only partly. Right now, when your desire to start a business is still only a wish, it’s more important to determine if you really have what it takes to be an entrepreneur.
Based on its study of 2,500 U.S. entrepreneurs, research firm Gallup Inc. identified 10 personality traits that successful business owners share. They are: business-focused; confident; creative; delegators; determined; independent; knowledge-seekers; promoters; relationship-builders; and risk-takers.
If your personality is strong in these areas, you’ll probably succeed as an entrepreneur. If not, then maybe it’s time to re-think your future. And if you aren’t quite sure, try answering these questions:
• Am I a self-starter?
• Do I enjoy challenges?
• How do I handle setbacks?
• What talents and skills do I bring to the table?
• Why am I doing this, really?
Honest answers may suggest that starting a business is not the right choice for you. Conversely, you may uncover qualities you didn’t know you have that make business ownership a wish worth fulfilling.
You may discover that starting a business is not the right career path for you. Or, conversely, that business ownership is a dream worth pursuing. If so, let’s get started.
Set yourself up for success.
You wouldn’t buy a house or a car without serious research. So why would you even consider launching a business without the same careful attention to detail? Before taking the entrepreneurial plunge:
Assess Your Skills
Every business owner needs some level of expertise in five basic business functions: management, operations, marketing, sales and finance. If you don’t have personal experience in any particular function, now is the time to acquire it. Reach out to family, friends or colleagues for their specialized expertise or enroll in a workshop, seminar or college-level course to broaden your knowledge in specific areas. Look for special opportunities, too, such as entrepreneurship educational programs that are specifically tailored for veterans, women and minorities.
Analyze Your Industry
Every business in the U.S., including yours, falls within a particular NAICS (North American Industry Classification System) code, a standard used by federal statistical agencies to classify business establishments in order to collect, analyze and publish statistical data. Knowing the NAICS code for your industry is useful for filing tax forms and applying for federal contracts; it also opens the door to a wealth of information.
Before launching your business, look up your NAICS code online to determine:
• Sales potential
• Growth trends
• Seasonal fluctuations
• Average profit margin
• Industry trends
• Unique features
Use the Industry Assessment template available at www.FloridaSmallBusiness.com/TryIt to categorize the “opportunities” and “threats” you may face.
Evaluate Your Market
No business exists in a vacuum. So as you prepare to become an entrepreneur, consider these market factors affecting your product or service:
• Total customers
• Most likely buyers
Look for market information online or at the library from such sources as Small Business Development Center (SBDC) National Information Clearinghouse (www.SBDCNet.org); industry and trade associations; chambers of commerce; market research firms; media; competing and non-competing businesses with the same target market; and the U.S. Census Bureau.
Set Financial Parameters
Launching any new business requires money; how much depends on your business type, size and location. Estimating the costs of starting and running a business can be a tedious process, but you need to bite the bullet and just do it. By estimating your initial and ongoing costs up front you will be better able to:
• Establish financing goals
• Set a realistic break-even point (the day you begin making a profit)
• Manage your cash flow
Two groups of figures you must consider:
• Startup Costs Right out of the gate, you will need to pay fees for any necessary licenses, permits and registrations and make a down payment on the purchase of office space or, if you’re renting, pay first month’s rent and security deposit. Other startup costs include: utilities (deposits and initial hook-ups); office furniture and supplies; telecommunications equipment and computers; business cards and stationery; website development; advertising; and expenses related to a grand opening event.
• Ongoing Costs Costs you are likely to incur on a regular basis to keep your business running include: your salary and the salaries, wages and commissions you pay to employees; monthly rent or mortgage payments; fees for professional services to an accountant or lawyer; utilities; taxes; insurance; replenishment of/additions to inventory; supplies needed to operate your business; website hosting; and advertising.
Take our entrepreneur’s personality quiz and download worksheets to help with your business analysis at FloridaSmallBusiness.com/TryIt.