Last week we talked about finding a job. There was not room to discuss the alternative of starting your own business. Many unemployed had years of experience when their jobs were eliminated. Many young people have skills they could use to start their own businesses. Some of us want to make our own decisions.
The subject is too difficult to cover in 800 words. So let’s hit some high points. My first business was purchased through a business broker. The business price was very low because it was losing money. Hours of individual labor, selling outdated merchandise, cutting unnecessary overtime, increasing advertising, hiring a sales person, adding services not previously offered and personal contact with every client turned the business into a moneymaker within three years. When it grew to two locations both were sold to separate individuals and it was time for the next business.
Buying a business can be good if you see unnecessary overhead, markets not yet tapped and are willing to work for next to nothing for several years. Vending machine companies, parking lot sweeping services, restaurants (be careful with food and beverage) and beauty salons are listed in most brokerage advertisements.
Many people start businesses on the side while having a job. This is an excellent way to get started. The big advantage is it will be something you enjoy. It is easier to work when you would do the job for free and it has minimum startup expenses. There are so many options, it is a matter of paying attention. One person I know was interested in decorating and did it for friends free of charge. This eventually led to a staging business. Find what you like and make it a business.
Many people start by purchasing a franchise. Franchises have the advantage of a proven business plan, reputable suppliers and group advertising. If you have problems adapting to working for yourself, they stand ready to coach and provide training for you and your staff. The downside is the cost and generally the need to own more than one location to make a good living. It is not unusual to find a franchise owner having more than five locations. When you get to multiple locations there is more money and an accompanying number of headaches. But for good organizers this is an excellent way to earn a living. If you fancy yourself in the food/beverage/retail business, without experience, a franchise would be an excellent way to get started.
Find a mentor or five. You know people who are successful in business, people who have many contacts, people who are good with money and people with uncommon common sense. Invite them to lunch, explain your goals, and ask them to be a mentor. Most people will be pleased you trust them and value their expertise. When things get tough, it is great to have a number of people giving you options. I’ve had my two major mentors for more than 30 years.
Location, location, location. Yes, it is important. Don’t fall into the trap of thinking you will be so good people will find you. After you are established you will have repeat customers, but don’t expect anybody to be looking for you and your good idea initially.
Learn the difference between investing and spending money. This may be the major problem I’ve seen with the people I advised on new businesses. Every dollar you spend needs to make you money. I’ve seen people spend a great deal of money on furniture and scrimp on advertising. This is where a mentor can be invaluable.
The economy is slowing again. Despite the words from the media that things are getting better, they are wrong. There will be more businesses going broke, more businesses cutting hours and more businesses doing more with less people. The only true safety you have is working for yourself. It is not for everybody, but if you want to be the director of your future, look into it.
