Points to Consider When
Starting Your Own Business
Summary
Throughout the years, entrepreneurs have turned their ideas
into goods and services. They have met the needs and wants
of consumers and, at the same
time, they have built rewarding careers for themselves.
Becoming Your Own Boss
Many people start a small business in order to enjoy the
perceived rewards of freedom and independence. This is
understandable because owning your own business can offer
you the opportunity to experience freedom:
• the freedom to use your own ideas;
• the freedom to be the boss;
• the freedom not to be fired; and
• the freedom to earn as much as you want.
The reality of small business ownership can be quite
different. Many small business owners will tell you that
they work more hours than when they worked for someone else.
A large number of those hours are the result of demands of
others. Some of the more demanding others can be the
regulations imposed by provincial and federal governments.
Some of the other regulations that must be adhered to are:
federal and provincial licensing; local safety and health
regulations; environmental protection rules; employee
deductions and labour standards.
Then there are the significant others, who impact the bottom
line - the customer. You must satisfy your customers, for
these are the people who will ultimately decide whether or
not your business will succeed. You will be successful only
if you can provide them with the goods and/or services that
they want or need badly enough to pay for.
Then there are your financial others - the people who
provided you with funds to get your business started. They
might be relatives, friends, bankers, etc. No matter who
they are, they will have a vested interest in how well you
run your business.
Even your competitive others will become more significant as
their policies and competition will affect the way you run
your business, the hours you work, prices, profits and more.
As the most important other, you alone will take full credit
when errors in business decisions are made. A poor decision
that can result in losses not only to yourself, but to your
employees, creditors and customers as well.
It is money, after all, that is the bottom line. Your
success depends upon your ability as a boss to make sure
your business is making more money than it spends.
Why Will "You" Succeed?
At this point, the idea of running a small business may
not seem very attractive. Don't let the negatives get you
down. Running your own business can provide you with a
tremendous source of self-satisfaction and pride.
In order to succeed, most small business experts urge
prospective business owners to carefully and completely
analyze their potential venture. Typically, you will begin
by analysing yourself as a future entrepreneur.
What kind of person are you?
What technical or special knowledge do you have?
Self-confidence and drive, innovative thinking, goal
orientation, and business and technical knowledge are
necessary to succeed. These traits must also be tempered
with realism. Knowing the limits of your own abilities and
not being afraid to ask for help is imperative.
Successful people as well as business owners know what they
want to achieve in life. They determine where they are going
by setting goals, paying attention to details and motivating
others around them. It is wise to understand and follow the
lead of those successful people around you.
What Kind of Business
The type of business that you enter should complement your
experience, interest and/or technical knowledge. It is fine
for you to dream about becoming your own boss some day,
however, before you put too much work into your business,
make sure that the area you choose is the right one for you.
When deciding what business to start, you may want to
consider what hobbies and/or interests you have as well as
your experience and background. If you are interested in an
area in which you have little experience, you may want to
seek some training before you begin. Arranging a job in the
area of interest or acquiring a mentor are two ways that may
help you gain the knowledge and experience that you need.
Two other factors that are equally as important as the above
mentioned are:
Is there a need for the goods and/or services you are going
to offer?
Will there be a market for your product in the future?
Fads, technology, and innovations all affect the opportunity
for any business to be and remain successful.
The Odds of Success
Starting your own business is risky.
Of all firms started, just about a third fail within one
year, and 80% fail within three to five years. However,
after five years, the rate of discontinuation drops rapidly.
Lack of management experience accounts for nearly all of
small business failures. This does not mean that all small
business managers have poor management skills. More
accurately, it refers to the person's ability to deal with
the unexpected occurrences in business.
A recent example is the poor national and world economic
situation. In tough times, some small businesses are
surviving it, others are not.
Desire and persistence along with innovative thinking
improve the odds. In tough times, smaller business may be
able to change direction by introducing new ideas and
creating better methods to help move its product and sustain
an adequate income.
Start-up Money
After you have decided that you want to be in business, you
face the problem of money. How much money will it take to
start your new business? How much operating capital
will you need?
There are forms available that will help you put together a
very good estimate of your business start-up and on-going
capital requirements.
It is recommended that you become well acquainted with your
local bank, as it will probably be the main outside source
of capital.
All the above information should be helpful to you as you
think about establishing your new business. Remember, it
never hurts to gain more knowledge in your business area.
Few businesses have gone broke because the owner knew too
much about his/her business.
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