According to the Kaufman Index of Entrepreneurial Activity, about 543,000 new businesses are started every month in the United States. As the economy continues to slowly recover, is now a good time to start that business you always dreamed of owning? Here are some thoughts from successful entrepreneurs and experts on what it takes to start a successful business:
Rachel Kats-Galatt, CEO and founder of Maternal Science, advises that there is “no exact science in determining the right time to start a business … not just any business, but your own business.” Some may say that she started hers at the most inopportune time — when she was five months pregnant.
The key to turning a good idea into a viable business, according to Kats-Galatt, is to think about the “void you’re filling in the market.” Is there a need? Is there a point of difference between what you’re offering and your competitors?
To answer those questions you need to develop a business plan. A business plan can be used to get feedback from people whose judgment you trust and to raise money to fund the business.
Kats-Galatt notes “a business plan is a tool to help you think through many decisions that need to be made and to understand all the costs involved — it’s a GPS on your journey to business ownership.”
Dora Donovan, faculty lead for the Personalized Learning’s Small Business Administration degree, advises prospective business owners to know themselves, their business and available resources.
Before you decide to go into business for yourself, Donovan advises you “take a step back and analyze your strengths, weaknesses, opportunities and threats.”
In other words, do you have the skills to run a small business? Have you determined where your capital is coming from? What resources and financial consideration are available to you and how far will they take your company?
Anthony Mongeluzo, president of the IT services firm PCS, offers the following tips:
- Solve problems for your potential customers. The only way your business model could ever be successful is by solving problems for others. The harder the problem you solve, the more money you will make.
- Micro-manage your cash flow. Experts advise new business owners to remember that “cash is king.” After acknowledging this advice, most new business owners proceed to ignore it. The first few years are often the toughest, so keeping cash in reserve can allow the business to weather the rough spots.
- Get a good accountant. An accountant can make or break you. Even if you’re a “numbers person,” a great accountant will always know more because it’s not just the math, it’s the rules. Don’t delude yourself. Many small-business owners that failed didn’t have to if they had understood the “money side” of things.
- Find a mentor. All business owners need a mentor. Not a paid coaching service, but rather a person who has “been there and done that.” You probably know someone who fits the description or know someone that does. Don’t be afraid to ask. Most people are flattered to be asked and want to help. Be sure that you are respectful of their time and be willing to accommodate their schedule.
- Have fun. You will be working a lot and if you do not love what you do, owning a business is not for you. If you start your own business and you hope to succeed, you will think of it seven days a week.
Executive coach Elene Cafasso reminds us that “any time can be the right time or the wrong time to start your own business.”
The hard reality is that most new businesses do not reach their second birthday, no matter when they are started. There are as many success stories about firms launched in the middle of a recession as there are about those that failed during a stretch of economic exuberance.
Mirza Baig, an entrepreneur and chairman of the IT job portal Techfetch, adds that the right time to start a new business is when you are “ready to give your business your full energy, effort and commitment.”
Passion and confidence will enable you to overcome the obstacles you encounter on your entrepreneurial journey, according to Baig.
Starting a business is not for the faint of heart. For every new business that is started each year, at least one closes its doors. But if you have the passion, are willing to work hard, are willing to take risks and have developed a business plan that makes sense, now may be the right time for you to launch that business.
A veteran human resources executive, Lee E. Miller is a career coach and the author of “UP: Influence Power and the U Perspective — The Art of Getting What You Want.” Mail questions to Lee@employability-expert.com