1. How do I deal with problems?
Business is a chain of decisions. A good business person has to be able to make decisions. You don’t always have to be perfect: the teams that make the World Series can win two and lose two, but they then win the critial next game to be at 60% for the season. The same is true in business: mistakes will be made, but you have to be right more than wrong, and on critical issues, you have to be right most of the time. So if you don’t have the ability to deal with problems and make decisions, either pick a partner who does, or work for someone else who has that ability.
2. Am I a good judge of people?
A good business person starts by selecting the right people. As Jim Collins says in Good to Great, you pick the right people to put on the bus, and then they will tell you what direction the bus should go. If I’m not willing or unable to be very focused on getting others who will work well in my business, then maybe I should see who has a business that I could help if I were on their team.
This goes beyond selecting good employees. It goes to selecting good customers and good vendors. If you have something to sell and only need to sell it to someone once, then maybe customer relations isn’t important. But, most businesses grow based on long term relationships and referrals. Seek customers who need you as much as you need them.
Seek vendors who want long term relationships, as well, so that as you start out or if things get tough, they will extend accommodations to you to assure your business remains strong and healthy.
3. Am I passionate about what I want to do?
There are hot dog vendors and cupcake makers that are awesomely successful. They are passionate about their products and have developed a "core concept" to make their customers just as passionate. For example, "the best deal on two dogs and a drink in America, for just $4."
Or, "our cupcakes are the most beautifully decorated in the world, and they taste as good as they look."
Whether you want to make something, sell something or provide a service, be sure you are passionate about what you want to do — that you really enjoy and want to do just that and become the best in the world at doing it. If you love doing it, if you have that passion and dessire, you will become the best at it. If you are only good at something, but not passionate about it, problems and time will overtake you. The worst thing you can do is to be fairly good at something you don’t like. Others will make you do it forever, and you’ll hate it. Instead, pick something you love and pursue it.
4. Am I capable of starting a business?
Every business requires certain basic abilites:
- the ability to provide skill or expertise related to a product or service
- demand for the product or service
an unmet supply for that demand
In addition, businesses that are going to really succeed require:
- a great deal of effort and focus
- the desire to be the best
- a good business plan
- a good marketing plan
- ability to react to change
Consider the above when deciding whether you could run your own business.
5. What should my business plan contain?
A good business plan should include all of the following:
- a crystal clear definition of the products or services to be provided
- a summary of the competing product or servides in the marketplace
- an analysis of the competition
- a definition of how I will differ from the competition
- a projection of revenue and expenses, by month, for the first several year, with parallel numbers for a best case and worst case scenarios
A business plan has to be custom fit to a particular business. For example, a manufacturer’s plan would include significant detail and analysis relating to the cost of space, labor, raw materials and utilites. A medical clinic might focus on the cost of labor and analysis of the payment schedules of various provider plans. If in doubt, provide additional detail. This helps avoid costly mistakes and provides possible alternative solutions when changes must occur.
6. Can I make more money by engaging in a "cash" business?
Some people pay taxes only out of fear of getting caught cheating. These people spend more time trying to figure out ways not to get caught than how to make money. The best business stragegy should be to pay the most taxes. That means you’ve made the most money! There is a difference between tax avoidance and tax evasion. Avoidance means paying the least amount of taxes you are legally obliged to pay. Evasion, on the other hand, is illegal, criminal and can result in loss of property or liberty. Beyond that, IRS has and does use the means to catch many of the cheaters.
7. How much can I stretch the truth when selling my products?
Dave, was a very successful sales manager at a large automotive group. He held the same short weekly meeting with his staff, asking them, "what is the most important thing a sales person can do?" They’d answer, "tell the truth." And Dave would say, "why?" And they’d answer, "because then you never have to remember what you said."
Dave’s salespeople weren’t just good, they were outstanding. Why? Because they defied the conventional wisdom that says all car salespeople lie. As a result, they got more referral business and repeat business than anyone in their industry. Always tell the truth and so will you!
8. What kind of advisors will I need to get into business?
Unless you personally have the skills in these fields, you will probably need:
- a good CPA or accountant, preferably fimiliar with the industry you intend to enter
- a good lawyer who specializes in business work
- a banker who is familiar with the type of business you intend to form
- an business insurance expert who is familiar with the risks associated with your business
- others who may be needed to mentor you in the area you seek to enter
Amazingly enough, many people who could be your competition are more than willing to help you get started. Just be careful that they are sending you the right direction.
9. How do I know what type of entity to form?
You should discuss this with your lawyer, but any good business lawyer will also bring the others on your team into that discussion, relying heavily upon what the accountant may add as far as tax and accounting considerations. Most businesses want some form of limited liability entity, and there are now a number to choose from. Setup varies from state to state. Sometimes cost can enter into the decision.
10. How do I get the licenses and permits I need to operate within the law?
Here’s where getting an experienced team of experts helping you really pays off. There are often federal, state, county and local regulations that may apply to a business. Working with people who have worked with others do what you intend to do will help you uncover all the necessary licenses and permits you will need and often will result in a quicker route toward getting up and running. Often states, counties and large communities have economic development boards that assist people to assure they get the proper permits.