Founder. President. Owner. CEO. Sole proprietor. These titles may appeal to anyone with an entrepreneurial spirit eager to start a new business. And whether you hold a high school diploma or a doctorate in business, the prospect of business ownership is exciting. You may be familiar with some of these business successes—but they, too, started with small, with the right idea and the right attitude*:
- Paul Orfalea never thought he could get a job because of his dyslexia. He ended up borrowing $5,000 from a bank and launched a business in his garage—that business was Kinko’s, now owned by FedEx.
- J.C. Penney lived with his young wife and their baby in an attic above their dry goods store in Wyoming. Today there are more than 1,300 J.C. Penney’s stores.
- TWO MEN AND A TRUCK® was a moving business Mary Ellen Sheets helped her sons set up to earn money during high school. When they left for college, the phone kept ringing—and Mary Ellen kept the business running. Today, the company has franchises all over the world.
When you look at the stories behind these and other entrepreneurial successes, a number of important questions undoubtedly played a role—and these are some you should consider before starting a business.
- COMMITMENT: Do you have enough time to create and sustain a business? Will this be a part-time or full-time venture? Are you willing to take risks? Do you have passion and confidence? Are you decisive and creative? Do you need additional education, such as a Master’s of Business Administration (MBA), prior to starting?
- RESEARCH: Have you done any market research by going online, learning which markets are most successful at the time? You don’t want to go into a business market that is in decline. Pick one that is up-and-coming. Use resources like sba.gov to see where consumers are being underserved. Consider whether your business will be available at the global level.
- TYPE: In light of the market needs your products or services will meet, is it smarter to purchase a franchise or existing business?
- CUSTOMERS: Who are your customers and why will they buy your product or service? Can you begin with established contacts such as those in your neighborhood, church, or school, and then branch out via social media? Can they afford your services? How long will it take you to convert a prospect to a customer?
- COMPETITIORS: Who are your competitors? How will you differentiate your business from others? Have you thought through the strengths and weaknesses of your product or service? Will your pricing be competitive?
- LOCATION: What kind of space, facility, and resources will the business require? Many small businesses are home-based—is that an option? What about equipment, insurance, and licenses?
- DOLLARS: What funding will you need to start and maintain the business? Be sure not to underestimate. Have you considered businesses with lower start-up costs in the event you’re unable to secure a loan on terms that are reasonable to you? Do you have a banker with whom you are comfortable? If not, finding one and establishing a relationship will be beneficial on many levels, both at the outset and in the long run.
- STRUCTURE: There are a variety of legal structures available, each with its own advantages. Are you familiar with the differences between a corporation, sole proprietorship, partnership, S corporation, and nonprofit organization? What options do you have for legal advice? By starting your research online and learning about available options, you’ll likely be more cost effective in the event you need to seek counsel.
- GOALS: Have you written a business plan and established goals? Many online graduate degree programs—from a BS in Business Administration to online DBA programs—position business plans as a roadmap to success. Plan out 3–5 years and make sure your plan is flexible. You don’t need to reinvent the wheel; research business plans for similar businesses that are now thriving.
- MARKETING: Be deliberate about marketing and branding. If this isn’t your area of expertise, seek out a consultant or small agency. Determine the types of advertising that will suit your needs and reach your customers; the mix will likely include word of mouth, events (including a grand opening, if appropriate), digital advertising (Internet, social media, e-mail marketing), and even traditional advertising (print, TV, radio). Whatever the mix, your online presence—including your website’s visibility, which you can enhance through organic or paid SEO efforts—is critical.
- SUPPORT: Who will support and guide you? If you’re seeking additional education to enhance your entrepreneurial endeavors, the flexibility and support of an online university may be ideal for you. Do you have a mentor—perhaps someone with an online business degree with a specialization that relates to your business? Your community may have additional resources available, including your local Chamber of Commerce. Asking other business owners for advice is also a great approach.
New businesses often succeed or fail based on how well thought-out they are. That’s why evaluating, researching, and developing your business using these topics as a guide is crucial. Strong planning up front will position you for greater success in the long run.
*Fred DeLuca and John P. Hayes. Start Small Finish Big. (New York: Warner Books, Inc., 2000)