By G. Timothy Leighton *
February 5, 2021 — Many people dream of being their own boss. Not only would you be in control of your own vision, but as an entrepreneur, you would have the opportunity to provide a product or service that is superior over others on the market. But how do you decide to give up the security of working for someone else, that your business can and will provide for you and your dependents, and most importantly, that you will succeed? You want the satisfaction, the freedom and the rewarding feeling that you did it all by yourself. But how do you know if it is a good idea to jump in?
1) Assess your personal characteristics for business. Not everyone is cut out to be a business owner. Launching a business from the ground up can take a tremendous amount of time, energy and self-discipline. Especially in the early stages, some businesses seem to run almost solely on dedication, perseverance and the owner’s own optimism. And there are very real financial hurdles to jump – turning a profit can take some time and both the business and its owner need to be provided for financially during that delicate start-up period.
Whether through online searches, visits to a local library or meetings with professional advisors, you should figure out the characteristics of successful business owners, both generally and in your specific field. Write them down. Ask yourself and your advisors the hard questions and assess yourself on each characteristic. Be sure you can conclude that you have a passing score.
2) Commit your assessment and plan to paper. After you determine that you have sufficient personal characteristics to pursue your dream, get concrete with the business elements. These include identifying your objectives, defining your business idea, researching and writing your business plan, devising a realistic budget, securing capital and determining your exit strategy.
3) Clarify your personal and career objectives. What are your reasons for wanting to start a business? What aspects of business ownership appeal to you most? In the long run, do you see your business as a side job that you run alone from your home, or do you envision yourself as an emerging CEO with a large staff and several bases of operation?
4) Identify and refine your business idea. What talents and skills do you have that are most marketable? How large or small is the market that exists for your intended service or product? What is the competitive framework? Is there an “unmet need” you could fulfill or some other way you could set your business apart from the competition?
5) Research your idea. Look on the internet or in reference materials at our excellent local libraries for trade or professional organizations in your selected field. Discuss your idea with others to obtain a better understanding of the positives and negatives of the job.
6) Determine funds needed for the business. Research start-up costs for computers, goods, equipment, daily operating expenses and any other aspect of your business. Factor in regular living expenses you will need to cover until your business can turn a profit. Put your budget on paper or a spreadsheet.
7) Test the concept. Talk to potential customers to determine interest in buying your product or service. Test several prices to determine what the market will bear for your business.
8) Develop a business plan. Sample business plans are available through various trade and professional organizations, and local colleges offer both courses and professors available for consulting. Reference books in libraries and online also can provide background for drafting a solid business plan.
9) Secure financing. Discuss needs for additional financing with your financial advisor. Be sure you have adequate financing committed before pulling the trigger.
10) Plan your exit. Decide what should happen to your business if you die too soon, hit your goals early, miss the goals altogether or any number of other “what-ifs”. While failure may not be an option, consider various scenarios for passing or selling your business to others, safety nets, and other alternatives. Stay tuned for future articles in which we will discuss business succession.
Henry Ford is reported to have said that the longest journey begins with a single step. It is great to plan, yet once you start your business, your real work begins. Set yourself up for success by making a plan, challenging it and regularly comparing your actual experience back to your plan. It can be a wonderfully satisfying experience. Click here for ways to schedule your appointment to discuss your goals with Attorney Tim Leighton.
* Tim Leighton of Leighton Legal Group, LLC is an experienced lawyer based in Bloomington, Illinois who helps business Clients build their enterprises and plan for continuation after it is time to close the business or sell the business to someone else.