Dream It ... Now Do It
So you want to start a business? You are not alone. On any given day in America — the land of opportunity — thousands of men and women are dreaming that same dream. In 2017, more than 6.5 million of them made it happen; they actually opened their own businesses.
It’s no secret that the idea of “being your own boss” carries broad appeal for many hard-working Americans looking to escape the tedium of whatever job they currently hold. They long for the freedom to do work they love, represent a product or provide a service they believe in, set their own hours and take home all the profits. The fact that you’ve picked up a copy of Florida Small Business says you might be one of them.
But while all of the aspirations that made you want to launch a business in the first place are achievable, it’s important to remember that business ownership has a sober side too. Not all business startups succeed. According to U.S. Bureau of Labor statistics, only approximately 80% of newly opened businesses will survive their first year in business and 66% the second. By year five, however, half of these same businesses will be gone.
We don’t share these numbers to scare you off, only to suggest that entrepreneurship is a serious business that should not be taken too lightly or without significant planning. Owning and operating your own business requires drive, passion, focus, resilience and just plain hard work. But here’s another interesting fact: a business owner who has failed in the past is more likely to succeed in the future than one who never tried at all.
Building a business from the ground up can be both an exhilarating and an exhausting experience. Do you have what it takes to start a business and keep it going? There’s only one way to find out and the journey starts here.
So you’ve dreamed about opening your own business, but what does that mean? What exactly is your dream? Determine your readiness for business ownership by answering these questions:
• Why do I want to start a business?
• What makes me think I can succeed in a business of my own?
• What kind of business will this be — retail, service, manufacturing?
• Will it be a brick-and-mortar operation or strictly online?
• Will I operate from home, a storefront or office space I rent?
• Will my customers come to me or will I go to them?
• Do I have the skill/talent/experience to run this business and if not, how will I acquire it?
• Will I hire employees or go it alone?
• How will I pay for this?
• Where can I find help to get started and, later, to expand?
Set Yourself Up for Success
You wouldn’t buy a house or a car without research. So why would you consider launching a business without the same attention to detail? Before taking the entrepreneurial plunge:
#1. Assess Your Skills
Every business owner needs some expertise in five basic business functions: management, operations, marketing, sales and finance. If you don’t have experience in a particular function, now’s the time to acquire it. Ask family, friends and colleagues for advice; enroll in college-level courses and workshops to broaden your knowledge.
#2. Analyze Your Industry
Every business in the U.S. falls within a particular NAICS (North American Industry Classification System) code, a standard used by federal statistical agencies to classify business establishments for the purpose of collecting, analyzing and publishing statistical data. 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
#3. Evaluate Your Market
No business exists in a vacuum. As you prepare to become an entrepreneur, consider market factors affecting your product/service:
• Need
• Total customers
• Most likely buyers
• Affordability
• Competition
Look for market information from such sources as the 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.
#4. Set Financial Parameters
Launching any new business requires money; how much depends on your business type, size and location. Estimate your initial and ongoing costs up front to better:
• 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 Fees for any necessary licenses/permits/registrations; down payment on the purchase of office space or, if you’re renting, first month’s rent and security deposit; utilities (deposits and initial hook-ups); initial inventory; office furniture and supplies; telecommunications equipment and computers; business cards and stationery; website development; advertising; expenses related to a grand opening event.
Ongoing Costs Your salary and the salaries, wages and commissions paid to employees; monthly rent or mortgage payments; fees for professional services (accountant, lawyer, etc.); utilities; taxes; insurance; replenishment of/additions to inventory; supplies needed to operate your business; website hosting; advertising.