If you want to be an entrepreneur, you’re in good company. An average of 464,000 adults a month create new businesses, according to the most recent statistics available from the Kauffman Foundation , which tracks and promotes entrepreneurship.
But starting a business is a complicated, risky, all-consuming effort. Indeed, just two-thirds of new small businesses survive at least two years, and only 44 percent survive at least four years, according to a study by the U.S. Small Business Association.
1. Determine if you’re an entrepreneur or just a wannabe. Starting a successful business requires a unique set of characteristics. You have to be willing to take calculated risks. In addition, a mix of optimism, high energy, and an ability to live with ambiguity are also crucial.
2. Pinpoint an opportunity. There are lots of ways to find the right business idea. But for most people, it’s wise to begin with your interests, say small-business experts.
3. Make sure there’s a market for your idea. Get out there and talk to as many potential customers, suppliers and distributors as you can. Trade-show attendees are a particularly good source of information. And remember: You’re not trying to sell anything yet; you’re just exploring the opportunity.
4. Write a business plan. Any plan needs to answer a few key questions: What is your product or service? Who is your customer? What need does it address? And, how are you going to turn your idea into a money-making venture?
5. Determine your business structure. You have four basic choices — sole proprietorship, partnership, LLC, or corporation. Each offers different legal protections, tax savings, and ownership requirements. They also vary in how complicated they are to set up.
6. Look for funding. Most entrepreneurs start their businesses by dipping into their savings, and hitting up friends and family. Perhaps half of all startups, in fact, are funded initially by the founder’s credit cards.
Photo by PPDIGITAL.
Clint Laskowski on April 1st, 2007 at 9:32 pm
Writing a huge business plan is a waste of time. Consider the “One Page Business Plan” (Google it).