How to Start Your Own Business

Chapter 1 • Introduction

inspire. To tell you the things you don’t know and remind you of the things

you do. Some will tell you that the path you’re about to embark on is a perilous one, but it’s not. However, it’s not without its curves, speed bumps and

detours. Starting Your Own Business helps prepare you as you go. You’ll

learn what to expect at each step along the way. It’s like a map pointing out

the best routes to take. A wise person once said, “Forewarned is forearmed.” So consider this book part of your arsenal.

Earlier editions of this book contained a quiz to see if you were cut out to be

an entrepreneur. But I decided to eliminate it. Tests don’t tell you whether

you’re ready to be an entrepreneur—your gut tells you. If you weren’t ready,

you wouldn’t have bought this book. Some people mistakenly believe you have

to be born an entrepreneur to succeed—you don’t. You can learn what it takes.

That’s what this book is all about.

Starting Your Own Business takes you step by step through the startup

journey, from how to get an idea for a business to finally opening the doors to

your new venture. Along the way, we provide lots of forms, work sheets and

checklists you can actually use in your business as well as to make sure you’re

on the right track.

Since business ideas, trends and strategies constantly change, we’ve made

a number of changes in Starting Your Own Business as well. We’ve updated and

revised (or expanded) every chapter and added a lot of new ones too. Since I

believe the startup phase of a business lasts about three years, we take you

beyond just opening your doors. In addition, the business resources are all

new. And I’ve asked some of the business experts and gurus who write for

Entrepreneur magazine to share their insights and expertise with you here.

We’ve also added quotes. I love quotes. When I’m looking for inspiration, I

often read quote books. They not only inspire me, but sometimes I learn from

reading them. I’ve decided to share my joy of quotes with you. Sprinkled

throughout this edition, you’ll find quotes from successful entrepreneurs and

other experts. I’m certain their wisdom will inspire you as much as it does me.

The book is also filled with five different types of helpful tip boxes (also

all new):

Aha!

Here you will find

helpful information or ideas

you may not

have thought

of before.

Save

Look for this box to

provide valuable ways

you can save money

during startup.

Starting Your Own Business!

Starting Your Own Business is not as mysterious as some would have you

believe (for more on this, see Chapter 3) nor as frightening or risky as legend

would have it. But it’s a journey that is better not taken alone. With Starting

Your Own Business as your companion, you’ll be a wiser traveler on the road

to business ownership. So what are you waiting for? As an ancient Chinese

philosopher once sagely said, “Every journey…must begin with a singles.

Chapter 2 • Taking The Plunge

2.2

THE ENTREPRENEURIAL PERSONALITY

Every year, hundreds of thousands of people start their own businesses. But

while most succeed (yes, that’s the truth), many do fail. Why? One of the common causes of startup failure is lack of preparation.

People come to the entrepreneurial path from different directions.

Increasingly, some start fresh out of college or after a stint at home raising

their kids or simply because the idea of actually retiring is abhorrent to them.

Most, though, come to entrepreneurship straight out of the work force.

Quitting a full-time job to start a business

isn’t something to be taken lightly. You

should be sure now is the right time to get

started. First, you need to ask yourself

some questions: Do I have enough money?

If you have a family, are they ready for this?

Is there a need for a product or service like

mine? Parts 1, 2 and 3 of this book will help

you answer those questions.

Full Steam Ahead

Many successful entrepreneurs say a

sense of urgency that made starting their

businesses not just a desire but a necessity was their driving force. One entrepreneur’s advice: “You’ll know the time is right

when you can honestly say ‘I’ll put my

house, jewelry and other personal collateral on the line to attain the startup money I

need for the long-term rewards I deserve.’”

Now, I’m not recommending you put up your home (though more than a few

entrepreneurs started that way). But that willingness to risk everything likely

means you’re ready to start now.

What motivates potential entrepreneurs to stop daydreaming about business ownership and actually do something about it? While many people think

one single incident—such as getting fired or being passed over for a promotion—is the impetus for becoming your own boss, most experts agree it’s usually a series of frustrations that leads to entrepreneurship.

A fundamental desire to control their own destinies ranks very high on most

entrepreneurs’ lists of reasons for starting their own businesses. This need is so

strong that entrepreneurs will risk family, future and careers to be their own

boss. Unable to feel truly fulfilled working for someone else, these individuals

cannot be happy following someone else’s plan or taking orders from a boss.

But opportunity comes in many guises. It might be when potential

Starting Your Own Business • Chapter 2

• 2.3

• start calling you, or perhaps a business in your area is failing and you know

• you can make it work. Or maybe you feel as if you’re underemployed (working

• below your potential salary level or your skill level) or not putting your skills

• and talents to their best use. Perhaps there’s a need for the product or service you want to provide. Or you’ve simply figured out a better or a new way to

• do something.

• Reality Check

• Once you’ve made the decision to break away, there are several things you

• should do before taking the next step. Conducting thorough market research is

• a must. Make sure you have enough cash—not only for the business, but to sustain your life—and discuss the decision with your family. (You’ll find out more

• about all these steps in Parts 1, 2 and 3 of

• this book.)

• Remember, the rewards of small-business ownership are not instantaneous. You

• must be determined, patient, persistent and

• willing to make sacrifices to ensure those

• rewards eventually do come.

• You’ll need to prepare for the responsibilities that come with business ownership.

• When things go wrong, the buck stops with

• you. You won’t have the luxury of going home

• at 5 o’clock while the boss stays all night to

• fix a chaotic situation. Someone whose only

• desire is to get rich quick probably won’t last

• long owning his or her own business.

• Through surveys and research, we know

• that successful entrepreneurs share some

• common personality traits, the most important of which is confidence. They possess confidence not only in themselves, but

• also in their ability to sell their ideas, set up a business and trust their intuition

• along the way. Small business is fiercely competitive, and it’s the business owners with confidence who survive.

• YOUR STRENGTHS AND WEAKNESSES

• It’s rare that one person possesses all the qualities needed to be successful

• in business. Everyone has strong suits and weak points. What’s important is

• to understand your strengths and weaknesses. To do this, you need to evaluate

• the major achievements in your personal and professional life and the skills

• you used to accomplish them. The following steps can help:

• ▲ Create a personal resume. Compose a resume that lists your professional and time.