I encourage GRS readers to pursue their dreams. I also extol the virtues of entrepreneurship. Mike believes he’s ready to take both pieces of advice to heart. He wants to leave his job, set out on his own, and start a new business. But he’s worried. He wonders if Get Rich Slowly readers can offer any advice. Here’s his story:
I’ve been at the same job since I graduated from college nearly ten years ago. Lately I’ve lost the passion for what I do and am aching for something completely different. I want to start a retail shop.
Two problems:
- I’m paid well here, so I’m going to have to figure out how to make this transition in a way that won’t hurt the family’s finances.
- I don’t have any real business training, and the thought of keeping books for the business gives me stomach pains. Â But there are resources out there to help with the logistical side of running a (retail) business, and I know where I need help and will pay for it (accounting, interior decorator, etc.).
The bigger issues, I think, are how to get from where I am now — sitting behind a desk doing the job I’ve been doing for 10 years — and getting the momentum going to really make this happen (and to not fail at it, leaving me jobless and penniless).
Also, I worry about some of the things that may not be covered in standard business-type books, like the best ways to look for employees and how to deal with them on a employer-employee level. Or ways to balance family and work when you’re putting in six 12-hour days a week trying to build your business. Or a good step-by-step timeline of how to go about hunting for business space, gathering financing, etc., all while continuing to work your regular day job.
Are there any good resources — be they blogs or books — that can help with the problems that don’t come down as much to tried-and-true business rules, but more to the everyday human side of trying to build a new business?
I think all new business owners wrestle with these questions. Since quitting my day job to blog full time, I’ve gradually come to realize that Get Rich Slowly isn’t just a hobby — it’s a business. I just hired my first contract employee yesterday, and although he’s a friend I trust, the process was still a little scary because it’s so new.
Based on my (very limited) experience, a lot of this stuff can only be learned through the doing. Mike will make mistakes along the way, but I don’t think that should dissuade him. Mistakes are frustrating, but they’re also learning opportunities. Here are some other tips for Mike as he considers this endeavor:
- Be sure you have adequate savings. Build a buffer in addition to your normal emergency fund so that you have a cushion to fall back on if times get tough.
- Tap into local resources. Check with the Small Business Administration to see if they offer classes or seminars in your area. Better yet, visit a community college. They’ll offer business classes, and many provide additional resources to small business owners.
- Seek help from your social network. Do you know any friends with small businesses? Do you have a working relationship with a lawyer and accountant? Is there somebody in your community who can act as a mentor?
I grew up in a small business culture. My father was a serial entrepreneur, and so I got to see first-hand his failures and successes. One thing I learned from him is to proceed cautiously and deliberately. Know your business, and seek to be the best at what you do. Don’t try to be the biggest — try to be the best.
Many of you have experience with small businesses — either as owners or as employees. Can you offer Mike any advice? What should he consider as he leaves his job and strikes out on his own? How can he learn to handle the human side of owning a business?
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However much start-up capital you think you need, triple it.
His biggest problem is this statement, “and to not fail at it, leaving me jobless and penniless.” No one wants that, but you have to be psychologically prepared to fail. If you aren’t and your family isn’t, you will increase your likelyhood of failure. There are ZERO guarantees, no matter how much work you do or how much knowledge you have.
Cut way back on your life now, so you are used to it when you start the business.
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I recently took a business seminar at a local community college for free. The more conversations I have, the more my plan comes together it seems.
I think you can never underestimate the value of a complete and thoughtful business plan. When you think you’ve done your best, have as many other people as you can help you with it. I’m working on mine right now… Can’t wait to see what others have to say about this!
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I’m not in any way associated with this conference, just thought it might be helpful to you: http://thestartconference.com/
(I do know that these speakers and organizers really know their stuff)
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Well I’ve recently written about the ‘why’ part of it on my own blog — Why you should leave your job and get started on your own (Top 10 reasons to leave your job). So possibly that may help with the motivation end of things.
Regarding the human side of things, I would strongly advise – make sure it’s something you either love to do or at least you enjoy. Because if it comes down to spending long hours, you just want to spend that time doing something you get enjoyment out of – it’s as simple as that! How can you get excited about doing something you don’t enjoy? And when you are enthusiastic about it, much of the time it doesn’t even feel like ‘work’.
Finally, on the practical end, I agree with Nicole above – make your business plan thorough and complete. Work out as many of the minute details as you can in the beginning. What happens is there are so many issues and details you just don’t think of at first until you sit down and grind out the actual business plan.
Best of luck, Eric
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I am in the same boat as you. I’m very close to going out on my own. I’m 37 years old, the thougth of 30 more years of working for someone else just kills me.
I have a plan, I know what I want to do. I just had a marketing plan written, which is something I would recommend. The marketing plan made me take a hard look at things. Before the plan could be written, the precursor was a competition analysis and a feasibility study. After getting the thumbs up, then the plan was written. The plan helped me narrow my focus. I can now describe what my business does in 3 sentences. I know what my niche will be and how I will be different from my competition. There is more to it than that, but can you honestly answer those questions?
Anyways, like you, I am scared to death. My job pays me a great deal of money, my wife thinks I am crazy. I don’t have all the training either, but that is ok, I am focusing on my core competencies and outsourcing the things I am not an expert at. I am proceeding slowly right now, I have applied for a bank loan. This loan will fund the business, but not in the way you might think. It will simply be for cash flow to stay afloat. Many of my other expenses will come from cash and credit.
My plan right now is to leave my job in September.
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“Don’t try to be the biggest — try to be the best.” This line here alone was worth reading the article for, and applies to so many areas of life it’s not funny.
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Mike,
J.D.’s advice is spot on, especially the 3 bullet points. You’ve already knocked down one of the biggest hurdles: the temptation to do everything yourself.
As a struggling entrepreneur, I would suggest finding a mentor. Doesn’t have to be a business expert, but at least someone who can help you weather the the mental highs and lows. If possible, find someone other than your spouse to fill this role.
Last but not least, devour everything at EscapeFromCubicleNation.com This blog is exactly what you’re looking for. If you’re still feeling unsure after reading Pamela Slim’s advice, then you may want to stay put for awhile.
Whichever route you choose, keep in mind that it doesn’t lock you in forever. Good luck!
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It seems to me that everyone is in agreement that planning is imperative. You must plan for each eventuality so that you can act when something doesn’t go the way you intended.
In terms of your time, you could maybe free up a day from your current job and dedicate that to running your new venture. That way, you’ll still be able to spend time with your family.
You also need to know how to maximize your time by becoming ruthlessly efficient (Read ‘the four hour work week’ for help).
One of the best ways to leverage your time and skillbase is to outsource the tasks that take a lot of time or require specific skills that you don’t yet have.
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Mike will transition into a completely different industry, so exposing his ideas/plans to people with long, hard experience in the target sector is crucial. They can point out pitfalls–and maybe even fatal flaws–in his plan. At the same time, they may identify unforeseen strengths or opportunities. With retail, especially, location can make or break a business, so hard-hitting professional advice is essential.
Obviously he shouldn’t talk to competitors, but suppliers, managers of non-competing establishments, industry associations, volunteer consultants at SCORE.org, professional retail consultants, and commercial real estate brokers could provide him with invaluable advice and insight. Good luck, Mike!
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Be very wary of getting in too deep with capital expenditures before you have cash flow. There are so many eager salespeople anxious to “set you up” with the finest brand new equipment.
Start slow as a “profitable hobby” out of your home with low overhead to be sure it “feels right” and has some cash flow. *before* you quit your job.
Don’t be afraid to buy used equipment — your clients will care more about the end result you provide than how your truck looks.
Good luck!
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JD-Great question. This is they type of stuff my
blog focuses on. I apologize in
advance for the lengthy comment.
There are too many unknowns to give Mike a complete answer. Also, there is no
complete-and quick-answer. A few tips that Mike should keep in mind:
Start small, on the side, and in your spare time. This way you can keep
your day job while growing a real live business.
Find a niche market where you have experience and passion. Identify what
they need. This becomes your first product or service.
After you create your product or service…Sell! This is your number one
priority and should occupy 80% of your time.
Focus your energy on satisfying your customer's needs.
Keep your expenses low. Ignore furniture, office space, stationary,
employees, etc…
If Mike sticks to those five items he should be ok. He minimizes his startup
costs. He minimizes risk because he keeps his primary income while building the
replacement. He builds a customer focused service or product which will improve
sales and help assure his success. He focuses on sales which is the most
important thing for a fledgling business.
There are so many other things to learn and discuss that just won't fit into
a comment let alone one post!
Sales
Dealing with difficult people
How to hire people
How to set up business systems (processes, procedures, and standards) so
he can grow his business while demanding less of his time.
Marketing
Etc…
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If you’re starting from scratch, hire a lawyer and incorporate your business immediately. Understand what’s meant by the “corporate veil” and how it can protect you from personal bankruptcy. Avoid doing things like borrowing against your home to finance your start-up.
If you’re buying an existing business, understand what’s meant by “good will,” how you can ascertain what the business’s good will really is worth, and how you can maintain it. Again, HIRE A LAWYER who specializes in small business to help with the purchase and legalities. It’s worth the cost.
Quickbooks, a variant of Quicken designed for small businesses, can be used to keep the books with relatively little pain. Talk with your accountant to be sure this will suffice.
Have at least a year’s worth of fall-back savings, so that you can keep food on the table until the business can pay you a living wage.
Check your local community college for a short course on business planning. If none is offered, make a run on your library or bookstore and look for a book on how to make a business plan. Several very good ones are on the market.
Join the local Better Business Bureau. Attend meetings so that you can find people who are running similar businesses in your town, and talk with them about what it’s like and what challenges you’ll encounter. My business partner and I, BTW, found the BBB the most useful of several trade and networking groups we joined. In many states, there’s a local group and a statewide group; we found the local group most valuable, but ask around.
Select a business that you know something about, preferably one that you know a lot about. And figure this business is going to be a new member of the family. All the successful small-business owners I know seem to think of the business as like their child.
Like parenthood, owning a business is a 24-hour-a-day commitment.
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I like the idea of looking for seminars offered by community colleges in your area, or your town’s continuing education program. I leafed through a catalogue for the latter this morning and found a few interesting-looking, relevant courses.
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Two ideas come to mind. The first is try to pick up some part time work at a locally owned retail shop that doesn’t compete with your niche. Try to learn about the operations while there – opening/closing, scheduling staff, etc, not just running a register or selling product. Once you’ve established a relationship with the manager, let him know your long term goals and ask for some advice. Much can be learned over a cup of coffee or a cold beer.
My other suggestion would be to see what part of the operation could be done from home. Perhaps you could set up an eBay store to sell product, or build your own website to promote it locally. Assuming people don’t have to “kick the tires” before buying you could gauge the popularity of your idea before investing in a retail shop. Most of this could be done part time while you continue working your full time job for a steady paycheck, benefits, etc.
Whatever path you choose, I wish you well. Entrepreneurialism is at the very heart of what makes this country great!
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Another excellent free online source: Temple University in Pennsylvania offers free online courses specifically geared towards budding entrepreneurs.
Site: http://sbm.temple.edu/sbdc/onlineseminars.html
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He might want to talk to some of the non-profits that specialize in helping people start businesses. (I think “SCORE” is one of them.) They can review his business plan and give advice, etc.
I bet he could also talk to other business owners through his local Chamber of Commerce. They might be able to offer some good tips, too
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All the advice has been spot on. Here’s some more thoughts.
1) How about a partnership?
2) Would this retail store do well online first to build capital and knowledge?
3) As for the human side (employees, etc.) of running a business, my dad installed in me this quote, and pardon my French…
“God gave you two of the most important things in running a business: ears and balls.” Surely he didn’t live in the Dr. Phil era.
Anyway, listen to your employees, customers and competitors. When the rubber meets the road, make the decision.
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In PA, we have things called the Small Business Development Centers. http://www.pasbdc.org/ They are a wonderful resource that provides free training and consulting to people starting or growing businesses. Many people just need to have a mentor to help them and the SBDC’s provide that. Completely free.
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I’m in the same place, and I think I’ve about talked myself out of it.
Retail is tough, and with the economy going the way it is I’d be very cautious. When I began to look at my market for my concept, I realized that it just isn’t a good idea right now. Maybe later.
I got to this realization by talking to as many people I knew and trusted, read a lot, sat and watched the competition, and crunched numbers (with worst case senario).
Everyone is giving great advice. Your success is in the details. Plan and cover every base, and if the tea leaves say it can work — then go for it, but be ready for the peaks and valleys. Stats show 50% fail in the first year, 95% within 5 years.
If you can, try to do it on the side while you are still getting a paycheck. If things start to rock, then you have an easier in.
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We put together a two year plan to transition. That way we can have the benefit of the salary income while getting the business up and going. Once it’s stable it’ll be easier to venture out. Of course moonlighting gets to be a real strain on free time!
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Hi the advice I give to my clients is:
Make sure you have a market for what you are selling. If your product/service doesnt make life for your client better, easier or sexier, give up, you are wasting your time.
Market the impact of your product, not the product itself.
Get as much advice as possible, there are many blogs and websites giving great advice.
Network, network, network! The old maxim of “its who you know, not what you know” has never been more true.
Also, do something you love, so it all feels like a great adventure. Trying to make something that you dont enjoy work is worse than being employed and stagnant..trust me, I have been there.
Lastly, the best book on the subject on small business development I have ever seen is “The E-myth Revisited” by Michael Gerber. That literally covers everything…you can pick up a copy for a few cents on Amazon.
Best of luck xx
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I’ve got three pieces of advice and one suggestion.
1. Figure out exactly why you want to do this. In general, this should be in a positive form, such as, you want to really help people do x, rather than you don’t want to be penniless. Then, every single decision you have to make, make it compared to this question of why you’re doing this. You may well have more methods of fulfilling this why in a lot of ways more than just doing a retail shop in one location.
2. You’ll make many mistakes. Many, many mistakes. Hell, if this is your first business, its bloody likely to fail. And that’s ok. Get over it. This one might not work out great, but the next one might. Think of it as a learning experience rather than a continual battle to stave off poverty and death or whatever. Be willing to take risks.
3. You can’t be afraid to take risks because you might make a mistake, starting from the risk of going into business for yourself. Most mistakes are reversible, don’t matter much in the long-term or their impact can be mitigated easily. Most things are easily reversible, even seemingly permanent things such as leaving a job or getting a divorce. Hell, you can even go back to the same job often times, cause it can take a while to find someone to replace you. Remember that you have options. Lots of options, including going back to your old job or industry. So start this new business with full commitment, and have some fun!
Check out http://www.stevepavlina.com if you haven’t already. Find books by retail moguls and read them to find out what they did and how they did. I’ve always found Dan Kennedy’s books to be to the point and full of information.
That said, I’d suggest you take a long hard look at your purpose for starting this business and consider whether opening up a retail shop is the best way to do it, for you and for your potential customers. Without discouraging you, retail is hard, hard work (compared to other ways of monetizing your services), my family’s owned two retail stores that I was a part of as a kid, one of them tanked and the other one we sold on for about or less than what we paid for it. It may still be the right choice for you, and I’d just like you consider whether it is very closely.
Others have offered great advice, too.
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Thanks for all the great recommendation, everyone. I’ve got a lot here to start working with. I’m in the beginning stages of building my business plan and just want to make sure I’m aware of all the other things I should be thinking of as I start working through this.
I’ve actually made use of my local SBDC before (for a very, very small home-based side business), so I’ll certainly be going back to them for some more assistance once my plan is a little more developed.
I’m trying to be as patient as I can about the whole process since, like Eric mentioned, now could be a rough time to try and start a retail business (though, in terms of finding space, prices are certainly moving in the right direction).
Thanks again for the advice and pointers to resources. I’ve got a lot of reading ahead of me.
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I just thought of something else.
The whole risk-taking thing is so central to starting a business. You’re always just throwing yourself out there, taking leaps of faith. Again, in many ways Get Rich Slowly has become a business for me, and that’s the direction I’m trying to steer it. But it scares me.
One thing that’s helped is to go back and re-read my piece on the power of yes. By learning to say yes to things that scare me (not stupid things, but things that make me nervous), I’m getting a lot of opportunities. In the past, when a news crew might have contacted me, I would have been to nervous to let them film. This time I was still nervous, but I did it anyhow.
The same applies in all sorts of daily ways when working with a business. You can’t say yes to everything, obviously, but you’ve got to learn to say yes to the things that you know are good (like TV appearances or hiring employees, etc.) and not worry about the possible downsides. If things go poorly, just remember that for next time.
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Having started my own successful(profitable) business I have a few ideas that might help.
1. Spend money on a good Accountant and Lawyer. They pay for themselves in no time. Just something as simple as having an accountant to remind you to pay your quarterly taxes will save you hundreds, if not thousands.
2. Budget for advertising. I’ve seen a lot of other businesses spend thousands of dollars just to open their store or business only to have no budget for advertising. Then they complain that they don’t have any customers. You have to advertise to get customers. Even if it’s free advertising.
3. Build your nestegg first. When you are starting a business, it is best to be able to focus on it full time. I run mine part time and it works, but it is a lot slower to grow and build thing that would help the business. Before you start your business, I suggest you have a full year of operating expenses, startup expenses, as well as a full year of your family budget set aside before you start. That sounds like overkill, but having a full year to make money gives you the freedom to make good long term decisions instead of short ones.
4. Take your business online, but don’t pay for a website from a local company. Paying a local company to build you a website and charge you by the hour will cost you hundreds or thousands of dollars to get a website that you could get with a wordpress installation and a free template. The real benefit of doing anything online is that you can reach people for less online than you can in the real world. So, don’t spend thousands before you get your first customer. Buy cheap hosting from dreamhost, setup a wordpress or zencart installation and get help from people online. Then you’re spending maybe $10/month for the first year instead of $100 /month.
There’s a lot more to tell, but I think this comment has got too long already.
Brian,
Ideastone LLC
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Tons of excellent comments here.
I’ll add one other thing: You don’t learn about business from a book.
I’d encourage you to actively get up and seek out experts. Do you know someone who’s running their own business? It doesn’t even have to be in the same domain. Take them out to lunch and ask them what kind of challenges you should expect.
Then ask them who else you should be talking to.
Finally, ask them if you can follow up with them in a couple weeks, once you’ve hashed out your plans more. Then follow up.
There are experts at your church, local college, or even on Craigslist. All of them would be happy to chat for free. Use their experience to get a reality check on your plan!
This all sounds so commonsense, but we seem to actively prevent ourselves from seeking advice from others. Asking others for help is one of the hardest things we can do — and the most valuable.
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Starting out retail straight up can be risky. It depends on what he is selling.
I would highly, highly recommend trying to sell whatever you are selling on the side. Build up a client base then make the jump.
I think it is very easy to underestimate or hard retail can be. Are you comfortable being open 7 days per week?
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Also the thing that kills a majority of new companies is CASH FLOW. You must understand… master… this concept. Cash flow is absolutely key.
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Having recently quit my cushy well paying corporate job to start my own business, I can say that in the end you don’t know what you don’t know.
Every day I learn how to refine what it is I do, and where I add value. You have to be very introspective when you start, and let your vision change for the business.
Also, don’t say yes to everything, and don’t say yes for money.
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I started a consultancy business about 10 years ago and have certainly done lots of very hard learning.
Looking back I’d say that there was some good advice and bad advice I’d been given.
1. Get some mentors who have succeeded at what you set out to do. No point in trying to make the same mistakes other people have.
2. Keep your costs down and maintain your standard of living, even when you earn lots of money – you will need these savings for rainy days.
3. Keep going at it. It’s not easy. I wanted to quit every 3 months for the first 5 years. I remember a mentor of mine saying, “it takes 5 years to become established and 8 years to start making money.” You got to stay in the game.
4. Relationships with clients is everything. Simple. No good relationships, no business.
5. Market, market, market, market…
And good luck…worth it in the long run.
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I don’t really have any advice, I just want to be in on the email loop because I too am wanting to quit my job and start my own landscaping business. I figure its still a few years out, and what I’m doing now to prepare is finishing up my horticulture degree, and my mother (who I want to go into business with) is going to go back to school for her trade (advertising) and minor in business. We figure the two of us together can make it work, she’ll handle the buisness end of things and I’ll handle the plant end of things. I’m eager to hear everyone else’s response to this question.
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1. Get the right professionals to help you.
I am a business law attorney. When I have clients who come to me that are about to start a new business, I help them with many of the practical aspects of running a business, i.e., what to do with a lease, how/when to get new employees, basic entity structure, review of a business plan, etc.
There are great attorneys out there who can help you make your business thrive. Don’t be tempted by short-term savings to use a low-cost internet service to set you up with a business entity. They provide no education for a first-time entrepreneur on what you are supposed to do to run your new entity properly. This ends up getting countless new business owners in trouble.
Get an accountant. They will save you money on taxes, and give you great advice.
Attorneys and accountants know what has worked and what hasn’t for their past clients. You can learn from others mistakes instead of your own.
2. Network. Pick three networking groups and commit yourself to them. Spend time to build relationships and trust amongst those people. Not only will talking about your business with these new groups of people help you focus your own ideas, you’ll (hopefully) make great contacts for down the road.
3. Don’t try to prepare for everything. Something will always be out of your control. Be ready for it. Learn to adapt and to be ready to change your plans in response to whatever life may throw at you. (This does not mean you should undercapitalize your business, however. Sufficient funding is key to ensure enough time for success.)
Good luck!
(Please note that although I am an attorney, I am not your attorney and this comment does not create an attorney-client relationship.)
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Some really great, specific advice here already. I would agree with Neil and strongly encourage Mike (and all aspiring entrepreneurs) to read The E-Myth – and please read it before you have your entrepreneurial seizure!
http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1213372285&sr=8-1
Here are some really good small business blogs that will help you maintain the proper perspective on what you’re trying to accomplish with your business:
http://forum.belmont.edu/cornwall/
http://www.smallbiztrends.com/
http://blog.timberry.com/
http://www.usnews.com/blogs/risky-business/index.html
Although a Business Banker by day, I’m now moonlighting as an entrepreneur at night as I help my wife build her new small business. Please let me know if you have any financial questions that I may be able to help with, especially from the Banker side of the desk. Good luck.
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Don’t be a pyro. This article fit my boss to a tee, and I can tell you first hand that it’s not a good environment to work in, and it will drive your employees away.
http://money.cnn.com/magazines/fsb/fsb_archive/2007/07/01/100123041/index.htm
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the first thing i would do, if you have never done it before, is get a job in retail. part-time, a couple of days a week, whatever you can swing.
preferably in a store about the size, particularly employee-wise, that you want to open, with a comparable demographic of clientèle.
this will do many things for you.
first of all, it will confirm that you can work in that environment. retail is extremely trying both mentally and physically. it is rarely rewarding, unless you are selling product that yr customers are constantly very enthusiastic about. most people save their enthusiasm for their loved ones and not the people trying to add additional items to their sale.
also, this will let you get a feel for yr sales skills and see how comfortable you are with it, how good you are at it, and hone those skills.
secondly, interacting with yr co-workers and managers will teach you a lot about how you want things to be handled in yr store. if you are lucky enough to have an effective manager, you can pick his or her brain about management style, payroll, etc. whatever they are willing to speak with you about.
good luck!
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I have to agree with what Ramit said; you will learn a lot more from business owners than you will in books or school.
Having opened a business that quickly failed due to excessive debt, unforseen costs, and a lack of understanding how bad borrowing money hurt me, I would make a couple of recommendations. (Read My Story on my blog)
1. Start your business small, with cash. Add employees as the need presents itself. If possible, keep your day job until you reach a point the business can support you. (Not sure what type of business you are looking at so I don’t know if that is a reasonable option).
2. Don’t risk everything on a business you have never operated. Risk is important and appropriate for any business venture; however, putting everything on the line for something you have never operated before is just stupid.
3. Lots of cash; everything really does cost twice as much and take twice as long. Be prepared.
I am in the process of starting up another business, just about three years after my restaurant failed. This time I’m doing it right, taking my time and doing it all with cash. Taking my time doesn’t mean I’m not working; it still requires 12 to 14 hour work days. Good luck!
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I second The E-Myth Revisited as an easy-to-read landscape view of what to expect and great philosophies about life and work about how to succeed in both.
I’ll add How to Start, Run & Stay in Business: The Nuts and Bolts Guide to Turning Your Business Dream into a Reality, for a more practical, but still basic, step-by-step guide on quickly covering all the “business-end of business” basics.
You might also like, from the Rich Dad series, Before You Quit Your Job.
Finally, I have to add what is in my opinion one of the greatest self-help books of all time, Think and Grow Rich by Napoleon Hill, (which I summarize on my blog to modernize the language a bit).
The crux of Think and Grow Rich is that you must start with a burning desire to do that thing, whatever it is. You have to believe with all your heart that your product or service is very useful to, or will be very desired by, your target market AND that you are the best person to bring it to them.
Everyone thinks of great products/services we’d all like to see but don’t care enough about most of those ideas to develop them. Unless you have a fire under your belly about your product/service, it will be very hard to succeed. You have to be the best salesperson for your stuff, which you can only do if you truly believe in it.
And, you have to, on the one hand, never give up on your dream; but, on the other hand, be willing to let your dream evolve as circumstances, especially supply and demand, change. So, be persistent but also be flexible. Most people don’t succeed in their first, second, or even third business ventures. That’s all grist for the mill! I think when you hit upon your “big idea,” you’ll be more excited about success than terrified of failure.
This is my third time around and that’s exactly how I feel (whereas I felt more fear than excitement in my 2 prior ventures). I just have that amazing feeling of certainty deep down in my gut — mostly b/c I really believe in what I’m doing — and that certainty seems to magically make things happen for me that never did before.
Good luck, Mike and Jessica!
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My advice is to go for it. It sounds like you have done your research and now is the time to try it.
I would suggest contacting your local SCORE organization. SCORE is made up of business people that are willing to help people.
Join or form a mastermind group of people that have similar interests.
Put out in the universe that your business is going to be successful.
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I strongly suggest taking classes at a local community or tech school. Often times they’ll have real buisness people come in to teach a class, so you can pick their brains.
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Wow, lots of great comments and advice.
I do have to say that looking to books for answers is a mistake. Many are written by academics, not people who have done it. One exception is E-Myth Revisited. This will help build something that can grow without taking over your life. I also liked Ready, Fire, Aim by Michael Masterson. Just worry about phase 1 and ignore the rest of the book right now.
Some of the free resources are hit or miss. I’ve had both good and bad luck with SCORE. It just depends on who you talk to and their experience level.
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@Eric-Don’t let the statistics scare you. They are misleading as they don’t take into consideration you experience, the type of business, the industry, or how you set up the business. The main reason for failure is inexperience. If you have industry/business experience the statistic flips to 90% success.
Also, it doesn’t take into consideration the many successful businesses that are closed because the owner dies, retires, or just gets worn out. This is why it pays to build a business, not just a job. Instead of closing it, you can sell.
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i was a middle-management type for a corporate retail chain for several years. while this is far from running one’s own business, it allowed me to master the concepts of staying within a supplied budget for things like overhead, labor hours, and losses (yes, people will steal stuff- even employees). if you can balance that plus unexpected stuff like the store alarm going off at 4am and paying for a police visit, you’re off to a good start.
managing people is a developed skill- if you have it, your employees may or may not like you. if you don’t have it, you won’t have employees to speak of for long. my hubby worked for a small business for a while- the wife of the owner was a tyrant and she caused very high employee turnover.
know and understand labor laws. abovementioned small business is no longer because the state department of workforce development sued them out of existence. they did not understand labor laws and violated nearly all of them, if that’s possible…
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I haven’t read through everyone’s responses, so maybe this was already mentioned .. but here are a couple things that stood out to me:
** How does he KNOW he’ll love working retail? Has he ever worked a normal retail job and had the experience of what it’s like to deal with that type of customer dynamic? If not, then I’d suggest a part time retail job before he takes the leap to his own store. I remember a story of a couple who always dreamed of owning their own pizza joint, but found out they hated making pizza only after they had invested their life savings and were in debt for the business. If they had actually worked in a pizza joint first, they would have saved themselves some major heartache.
** He mentioned working “six 12-hour days” — that’d be nice, huh? When you own a business it’s more like seven 18-hour days. Be ready for it. It can easily take over every waking minute of your life unless you first set boundries before you even begin.
** He might also want to consider keeping the full time job while he’s dealing with all the preliminary planning stages. It’s going to take a while to find a space, write a business plan, secure funding and inventory and get the space ready for opening day. Might as well have a steady stream of income during those long months of planning.
Good luck
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I am heading towards my own business, but not quite there yet so I really don’t have any of my own advice from lessons learned to give. However, one thing I keep in mind especially when naysayers try to give me advice is the quote by Rumi, “When setting out on a journey, do not seek advice from someone who has never left home.” So seek the advice of people who have been there and done that like everyone else says and do not listen to someone who has never had his own business. Also, beware of those who have had their own business and failed and are now very discouraging. They are NOT you.
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You have loads of good advice here, but as a business owner as well I thought I’d give you my perspective.
1. Before anything else get a good business attorney and accountant – make sure they are able to be completely upfront with you. Mine come right out and tell me when I’m being an idiot and that is priceless.
2. You’ve already made a great choice in contacting your SBDC. Mine helped us step by step with a business plan and offered several training seminars on everything from employee relations to financials. They usually offer grants and financial aid to small businesses. If they’ve already helped you with your business plan you are a step ahead in the financing process.
3. When times get bad, and they will-I promise, have a network of people you can go to for advice (not money) – this group could include your attorney, accountant, family members or friends with business experience, your spiritual leader, your banker. Do not isolate yourself. All of these people are vested in your success and if they are really good “success” to them doesn’t necessarily mean a successful business. They’ll have your general well-being in mind, and will keep you sane.
4. Don’t trust anybody. I don’t care if your best friend wants to be a customer or your brother wants to work for you. Get contracts in writing just so everything is clear. Give all your employees a handbook with policy clearly lined out. We’ve been taken advantage of by some very surprising people. Naivety can be the kiss of death in the business world. – it’s disappointing but true.
5. Resources I’ve used include Quickbooks – very nice for financials and it even has point of sale software. Inc.com and magazine is a great information source.
6. Finally, to repeat what many others have said here, make sure it’s something that you really like to do. Starting a business is extremely hard work and highly frustrating at times. If you aren’t motivated by your work these things will overwhelm you. And you will have to sacrifice time with your family to make it work – accept it.
Good luck to you and all the other soon-to-be entreprenuers. I wish you the very best!
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One thing that I would mention is talking to a small business owner that is in retail, but not a direct competitor. Ask him if you can come shadow him for a few months to learn the ins and outs of the business. At that point they will probably let you come and work and let you in essence run the business.
I did this with a franchise that I was looking to buy. I went to the owner in a neighboring town and let him know I was interested in seeing how the business works and he let me come work with him in the evenings. Soon, I could see if it was really a good fit for me or not. Turns out that I lost motivation really quickly because it wasn’t my cup of tea.
Some business owners might tell you no, but most don’t have a problem letting you learn from them. In fact, my experience is that they want to help and can even get you going with finance and referring you to attorneys and accountants.
Hands on experience is by far the best solution.
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I’m going to be leaving the world of legal assistant and open my own drive-thru coffee and donut place somewhere in the Delaware/Maryland shore area within the next 5 years. I’ve been told the best thing to do is get a (for now) part time job in a Dunkin Donuts type place and to learn to like to live on donuts and coffee for a while.
Thank you everybody for your input!
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I don’t know if this has been said, but try and leave your current job on good terms. If for some reason the new business doesn’t work out, or you find yourself missing your old job, returning to your previous employer might not be out of the question.
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1. Find an attorney or CPA (or both) that have experience with start-ups. Ask for referrals to find one that you can trust. They will give you advice on how to organize your business (corporation vs. LLC)
2. Find a banker – if you plan on borrowing for your business, look for someone who specializes in SBA lending.
3. Create a complete business plan (there are lots of templates online for this) – including pro forma financials. If you don’t have financial benchmarks, how will you measure success?
4. Be fearless. Only those who are willing to risk a lot will be rewarded accordingly.
OR, you could have your current employer pay for a MBA, learn everything you need to be successful (HR, accounting, marketing, ops mgmt, finance, etc), and work it as a side business until you earn enough to go it alone (getting a MBA a great way to learn your management strengths and weaknesses and will allow you a perfect incubator while getting your business off the ground – you may even find someone that you can play nice with to partner up with you).
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There’s some good advice here. As a small business owner I want to add a few more thoughts:
Expect a huge pay cut. Your company is giving you some perks that you’re not aware of like the software to do your job, the electricity for lights, stamps for the outgoing mail, the support you get from other coworkers, etc.
Even if you factor in 30% extra money for your startup (what some authorities say is the percentage by which most businesses are underfunded) be prepared for lean times.
Did I mention the pay cut?
Just don’t be disappointed if you do all of your research, start the business, and discover that the life is not for you. In our country the idea of being your own boss is overly hyped. Don’t believe that it is the only way out of your current state of burn out.
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