How to Think About Starting a Business

I have met people who were motivated to open a business for a number of reasons. Some saw a way to earn more money, others wanted to be the decision-maker (the boss) and not have to answer to anyone. There are the people who followed a passion, people who inherited a business and people who started a business to do what they truly wanted to do. If some of these scenarios resonate with why you’re thinking of starting a business, or if you have some other reasons of your own, read on!

Having started a business from scratch 18 years ago that led me to meet and consult with hundreds of other entrepreneurs, here are four BLUFs (bottom line up front) to think about when it comes to starting a small business.

BLUF 1: Know the Money You Need

You need money to launch a business, sustain a business and pay your bills for six months. To determine how much you need to launch, create a list of every expense you have to start. To sustain a business, you need a 12-month plan that lists every operating expense and the ways you plan to earn revenue to pay for those expenses. Finally, you still need to pay your bills while you’re pursuing this venture, and that will likely come from your savings.

I have advised on business plans for around 75 aspiring entrepreneurs, and only a handful of them opened a business. The reason was because they couldn’t make the numbers work – the expenses were too high, or they couldn’t figure out how to generate enough revenue.

Knowing the money you need does two things:

• It makes your dream to open the business viable.
• It prevents you from losing your savings if the business is not viable.

BLUF 2: Choose a Network (or two)

Being a business owner is a solo pursuit in many ways. Even when you have employees, you are still the sole decision-maker and the person 100% responsible for everything. This is why it’s important to have a network or two so you can stay connected with others in that same experience.

A chamber of commerce or other business organization is an easy network to choose. So is a trade association that connects to your business. The networks you choose initially may change over time as your business needs evolve, but the value in having a network remains. Benefiting from the knowledge and experiences of other people puts you on the fast-track to growing.

Michael Hughes is an expert on networking and has a free ebook you might find helpful if you’re new to the networking space.

BLUF 3: Know Your Strengths and Your Non-Strengths

One of my clients was a consulting agency that helped match people with franchise opportunities. A key element of what made a successful franchisee was that the individual was very self-aware. In other words, they knew what they were good at, and they knew areas where they struggled.

Make a list of what you do well or already have (i.e. sales, organization, knowledge, money) and what you don’t do well or don’t already have (i.e. social media, the ability to see things through to completion, outgoing personality, money). Be honest in this assessment because you want to lead with your strengths and build on your weaknesses to build a viable business.

I get hired when a business or organization sees that I can bring a value to them that they cannot generate on their own. It’s the same reason I outsource my bookkeeping – a professional can do it faster and more accurately, which allows me to spend that time on growing my business.

BLUF 4: Have a Strategy

Strategy is the foundation of my Think Like a Pro keynote. The premise is that when golf pros compete in a tournament, they don’t just show up on day one of the event, pick a club out of the bag and guess at where to hit it. They have been to the course in advance and built a strategy to play each hole to their strengths. Businesses should be doing the same thing – building a strategy to their strengths.

It’s much easier to get where you want to go when you have a bit of a roadmap to guide you. It eliminates guessing and keeps you focused on the results you want. This mindset is crucial because guessing and being unfocused leads to frustration and reactionary decisions which usually end up costing you time and money.
Know where you want to go and how you think you might get there. Your plan can change over time, but your commitment to following the strategy should be consistent.

Preparation is Key

Becoming a business owner is about adopting a rewarding lifestyle. To ensure that happens, do a little prep work. The learning element of entrepreneurship never changes – there are always new things to know that can help you build a better business. Why not start that way from the beginning?

Jennifer offers consulting services for new and established businesses. You can contact her directly at [email protected].

You can also buy her book, Forward Thinking For Your Business, from Amazon US, Amazon Canada, or by contacting Jennifer directly. (Bulk orders are available).