Planning

Entrepreneur: Do You Have What It Takes?

In an economy when so many fail, do you have what it takes to succeed?

I LIKE TO THINK that somewhere deep inside almost everyone, there is a potential entrepreneur. For entrepreneurs, survival becomes a very real challenge. Yet humans have survived millions of years, when so many other species haven't. We are an intelligent and adaptable group of fighters and survivors. While I believe that most people can be successful entrepreneurs if they truly want to, it's the want that stops them. They confuse it with can't. The truth is that you really can, but not without sacrifices and the right resources. At the end of the day, most people aren't willing to dig in and fight the long, hard battle to realize success.

Some say that starting a business in today's economy is harder than it's ever been. Some say otherwise. The facts are clear: Financial resources are plentiful to help a hopeful entrepreneur become successful. The market, however, is so saturated that getting a piece of those resources only comes to those who are willing to fight for it.

The first step is looking inside yourself and deciding if you are the type of person who shows the most common traits of successful entrepreneurs.

1. Are you motivated to get things done? Do you act before someone has to tell you to get going? These are very important traits for an entrepreneur, because you're the one at the helm. Not only do you have to be comfortable motivating yourself, but also motivating others. You're the boss now, so get used to it.

2. Are you easily intimidated? Do you tend to avoid competition? If so, you may want to reconsider starting a business. Intimidation and competition will fly at you from all directions and in all different forms. Other businesses, time, paperwork, changing conditions, money — they are all adversaries in your new endeavor and have real potential to make you fail.

3. Are you a good, open-minded listener? Part of being a good leader is being a good listener. We weren't born knowing everything, so part of being a successful entrepreneur is being able to listen and take advice from others. Quite frankly, you'd be foolish not to.

4. Do you know yourself well? Take an honest look at yourself. Having a solid understanding of your own strengths and weaknesses is probably the most important part of your pre-launch self-evaluation. When things get tough (and believe me, they will, at some point), you must have the will-power and self-discipline to overcome challenges, as well as the ability to assess risk and make decisions quickly in order to mitigate that risk.

5. Do you know what you're getting into? This question opens out into lots of related questions: Do you have the energy to push your business ahead ? Are your personal assets mostly positive (like your emotional or other support from family and friends, knowledge of the area of your proposed business, a business environment that at least is not hostile to your dream)? Is the type of business you picture realistic, given your abilities and the resources you can imagine tapping?

The bottom line here is that not everyone will start and run a business. Not exactly because they can't, per se, but because they won't. Some people just aren't willing to give it their all. The scariest part of it is that people who tell themselves that they will not give up, no matter what, sometimes end up giving up anyway because the struggles they face down the line are greater than they ever imagined.

Starting and running your own business can be a dream come true. At last, you can be yourself and run your own show. You don't have to share the wealth (unless you want to) and you can make all of your own decisions.

Keep these final thoughts in mind: starting a business is harder than you think it will be, but it's not impossible. Your mistakes are not failures — they're lessons. Learn from them and move on. People all over the world start successful businesses every single day. Are they better than you? Absolutely not! You have what it takes somewhere inside you to be successful; right now. So if you're ready for the challenge, reach down deep and don't let go until you've arrived where you want to be.

What Business is Best for You?

Every entrepreneur's first question is seldom the easiest. Here are some tips to help you decide and get you pointed in the right direction.

HERE'S A TRUE STORY. For the first three years of college, I was an international business and economics double-major. I was setting myself up to be a major player in the global business scene. My grades were stellar and it was looking like I'd land a great job right out of school. I had done extremely well in my summer internships and had proven myself to many leaders in the business circles I had ventured into.

There was one problem. Over the years, I had grown to loathe working in international business. Although I was still excelling, it was a matter of principle, not passion. In short, I grew to learn that international business was not the best choice for me to pursue, especially if I wanted to go into business for myself.

Making a career choice certainly requires honesty. Do you really want to be an investment banker? Lawyer? Doctor? Or do you actually want to be an art director, product designer, daycare owner, racecar driver, whatever? Look inside yourself and decide what you would really love to do for a living. I'm not going to lie to you and say that that's all you have to do — I don't buy that "If you can dream it, you can do it" boloney. But seriously, deciding what you truly want to do is the first step in starting the right business for you.

If, like so many others, you really don't know what you love to do (it may sound silly, but it's an extremely common problem for would-be entrepreneurs), think back about what you're good at. People usually like to do what they're good at. What did you achieve awards for as you were growing up? What were your hobbies? On what do you receive compliments from others?

Suppose someone on the street stopped you and said, "Listen, I've got more money than I know what to do with and I want to bankroll whatever business you want. I'll pay you more than you've ever dreamed to do it". What would you answer? What kind of business would you choose to start?

So let's say you can name a few dreams. As we all know, it's not quite as simple as dreaming and doing. The next step, of course, is to conduct research or rational brainstorming to test whether your dream is plausible or even possible. For instance, if you're fifty years old, I'm sorry — you're not going to be a professional basketball star. If you want to open a surf shop but live in the middle of the desert, I don't believe you'll be selling many surfboards there. Market testing is a very important aspect of deciding what kind of business is best for you.

So what happened in my story? I changed my major at the beginning of my senior year and, although I still earned minor degrees in international business and economics, my new major was in my true passion: writing. Although it was scary at first, I now know that I made the right choice, despite the risks. Why? Because I'm making a very good living doing what I love to do. I will always have my knowledge and insight into the global business and economic arenas, but I now use my passion and talents in my own business to write about what I know and to convey my knowledge to others, on my terms, and in my own voice. My father always said that if you love what you do, you'll never work a day in your life.

You know what? He was right.

S.G.

Five Boxes to CheckBeforeStarting a Business

You're not just a soon-to-be entrepreneur; you're also a person with a life. Don't screw it up by jumping the gun on your new business.

PEOPLE GET SO EXCITED when they feel like they've connected all of the intellectual dots and now have a complete idea about how to get their new business off the ground. Maybe they finally figured out the chemical composition of their new product, or finally just thought of the perfect name for their business.

Whatever the last piece of the puzzle was, don't let it excite you to the point where you get tunnel vision and lose sight of short-term goals. Before you go quitting your day job to start your new business, you need to ensure that you can check these five boxes so that you don't end up right back at your old desk.

[] Do you have enough money to live on while you start up? It might sound silly, but sometimes people get so wrapped up thinking about money for their new business that they forget to think about other important expenses that they will still be expected to pay, like rent, a mortgage, food, car, insurance, etc. Can you cover them while you're getting your business started? Experts say that having six months of living expenses saved up is a safe estimate, but the nature of our new business may require you to have more than that. Just make sure that you're not calling your living expenses start-up capital, or vice-versa.

[] Have you checked out your proposed location? Just because an idea is awesome doesn't mean that it's awesome for the location where you're starting a business. Snowshoe companies don't do well in Kuwait, gardeners for hire don't do well in Antarctica, and a used car parts shop in a rich neighborhood probably won't attract a single customer. The reasons why certain establishments don't survive in certain markets are countless. Sometimes, people find out the hard way by going out of business. Research other businesses like yours in the area in which you want to open, and see how they're doing.

[] Have you written a business and a marketing plan? Do you have any kind of plan at all? If so, is it good enough? Have you covered all of your bases? While part of writing a plan is organization and clarifying what you expect to do, the other major part is uncovering hidden issues or things you may not have thought of.

[] Test the water before you dive in. If you have your day job, try working as much as you can toward your new endeavor at night. This ties directly to Point Two above, in that you may be able to conduct a full market test through working at night and on the weekends while you still have your day job. If you can manage this for just a little while, it's a great way to maintain your life's security while testing whether or not your new endeavor will work.

[] Plan the transition. Brainstorming the strategy that takes you from where you are today to being an entrepreneur in the future will surely cause you to revise and revise your business plan. And that's good. No one, no matter how smart, can effectively plan the transition in one try. There are simply too many facets, including ones that you can't learn from books and that may be specific and unique to your personal life, to keep track of all at once. The biggest by far is your finances.

This can be daunting because not only do you have to consider your new business finances, but also your personal finances. Typically, things don't go as planned. You need to have contingency plans in place for your life's vitals like health, vehicle and home-owners insurance, child care, mortgage, etc.

Of course, not everyone who is trying to start a business is currently employed. However, the same general rules apply. Stabilize yourself before you try to start and stabilize a new business. If you have to work a job that you don't really enjoy for a short time, just to pay your bills and allow yourself to live while you start your own business at night or on the weekends, so be it. If you have enough money saved to start your own business without working a second job, that's even better. Just ensure that you don't run out of money before your new business can support you. Keep in mind that there's a big difference between your business being cash-flow positive and being able to support yourself.

It's important to stay on top of your personal finances during the transition period from employee to entrepreneur. While no one wants to think about it, in case your endeavor doesn't make it, you don't want to have to look for a new job while trying to put your personal life back together, too. But if you can check these five key boxes before you make your moves, you'll have far better odds of succeeding.

I've Got a Great Idea! What Next?

What to do with great business and product ideas.

IT'S A PROBLEM no one ever expects to have. Everyone who sits around trying to think of a good business or product idea never considers what to do once they have one. When the light bulb flashes, inventors and soon-to-be entrepreneurs get a look of sheer excitement because they're sure that they've finally thought of the idea that will make them a ton of money. Soon, however, they realize that while they do have a great idea, what they don't have is a plan or task list to get their product launched or their business idea to the next level. Often, they don't even know what the next level is. If you've been in this boat, don't be discouraged. Most people are, or have been in it too.

Depending on whether you're basing your new business on a tangible product, a service, or an intellectual property, the second step (after thinking of the idea) is to decide if you need to protect it with a patent, trademark, copyright, or any combination of them. A seasonal cherry pie road stand probably doesn't need protection, but suppose that stand is so successful that you want to take it to the next stage. Your hand-painted logo may need trademark protection if you plan to upsize your operation.

If you live in the US, the United States Patent and Trademark Office (USPTO) website will give you all the information and services you need to protect your product, service or idea. Similar offices do the same things in other countries. Once your idea is protected, you can get started planning and acquiring financing.

Not everyone with a great idea, however, wants to start a business. Writers don't write books because they want to start a publishing company, after all. Many people, after coming up with a great idea, want to put it on the open market, sell it, come up with another great idea, and repeat the entire process.

It can be tricky selling something on the open market, especially to large corporations. They have entire staffs of people whose jobs it is to write the best contracts or negotiate the best deals on behalf of the company so that, above all else, the company comes out on top in its purchases.

If this is your strategy, after making contact with the corporation, secure a fully executed non-disclosure agreement from them. The point of contact for this should be a duly authorized officer who can bind the company to the terms and conditions of your non-disclosure and acknowledge the presence of your copyright protection. We recommend that you secure this acknowledgement with two steps: the executed nondisclosure agreement, and a signature of acceptance on a letter you draft that requests their acknowledgment of certain specific points (e.g., copyright) that are important to you.

If they accept your terms, they will ask you to sign a contract. Although you may think you understand the terms stated in the contract, you would be wise to have legal representation of your own look it over before you sign it.

Once the legalities are taken care of, the hard part is generally over. No matter how excited you are about it, the safety and security of your great idea should be solidly protected.

That applies to you equally if your strategy is to develop rather than sell your idea. While it remains yours, do watch out for unfair use, piracy, copying, and so forth. Even with the protection of patent, trademark or copyright law, it does not mean your rights could be innocently or otherwise infringed upon by others. So always be alert to potential threats to your great new idea.

Choosing the Best Type of Business

When conceptualizing a new venture, entrepreneurs must consider which type of business will suit it best. Start your business the right way by addressing this first.

YOU PAY BILLS EVERY month to businesses like Jack's Garage, Tax Prep LLC, and Green Utility Corporation. Each of these businesses has a unique corporate structure. When you set up yours, you need to pick the best type of business structure to suit your great idea.

Whether you set up your business as a sole proprietorship, partnership, limited liability company (LLC), S-Corporation, or C-Corporation, it is vital to understand not only the filing and paperwork requirements, but also the different tax implications and liability impacts that each type of business structure entails.

Sole proprietorships: Commonly, owner-operated small businesses are set up as sole proprietorships due to the simplicity of the filings and regulation, as well as the single-layer tax impact on the revenues of the business. This type of ownership also allows you, the owner, to be your own boss. However, you should be extremely cautious if you set up either as a sole proprietor or in a general partnership. Both types of business structures allow for all of the liabilities of the business to be shared with the individual owners on a personal level. Unlimited liability can be scary. Just remember to hope for the best but plan for the worst. Don't choose a business structure based on the ease and convenience of setting it up.