Starting a New Business on Your Own
Starting your own
business can be a very exciting endeavor. It
allows you great freedom and opportunity to
explore and develop your own business idea. You
must decide what kind of business you want to
start. It is also important to examine yourself
and decide what you want from the business. Keep
in mind that starting a business requires careful
thought and planning. Many aspects of the business
must be considered including legal issues,
financing, marketing concerns, employee relations,
accounting procedures, equipment purchases, and
location. Research, preparation, organization,
and planning are critical in a start-up venture to
minimize risk and enhance your chance for success.
You might ask, “How do I know what kind of business to
start?” or “How are businesses formed?” Business ideas emerge in many ways.
- Finding and meeting an unfulfilled market need
Building a business on an existing customer relationship
Spinning off a business based on your experience and knowledge
Capitalizing on a new invention or technology
Growing a part-time business or hobby into a full time
Consider the following approach:
Research your business idea (doing a business
plan is a good place to begin)
Develop a strategy
Determine your marketing approach
Address key operational issues
Make your own decisions, but get advice from appropriate
Successfully starting your own business can
provide a sense of accomplishment and satisfaction in knowing you did it
yourself. However, if the business fails, you must assume all the
liabilities and emotional strain that goes with it. There are many
misconceptions surrounding owning one’s own business. Consider the following
I will be my own boss.
Being your own boss does not mean you can play golf or go fishing anytime
you want. Reality is, the business and your customers become your boss and
can demand 50-65 hours per week.
I can get rich overnight.
Small business and free enterprise provides a great opportunity to build
wealth; however, it will take time. Studies indicate that more than a
third of small businesses that grow significantly, do so after ten or more
years of existence.
expect immediate income from my business.
This is not likely. Generally, it takes 6-12 months before a new business
can start to pay the owner a decent salary. You should have a cash reserve
or savings to provide financial support for you and your family during the
I can start my business with
little or no money. Poor capitalization
is one of the major causes of business failure. Lack of capital results in
negative cash flow which can result in poor business decisions and serious
I will incorporate and use other
people’s money. Many books and articles
have been written about OPM (other people’s money). It is difficult to
borrow your way to wealth as a new business. The corporate shield probably
will not protect you in case of failure. Most banks today will require
you to personally guarantee the corporate loans for start-up businesses.
Consequently, all your assets may be at risk.