Tag: small-business

Do You Have What It Takes to be a Small Business Owner?

Many Americans have a dream of owning a business. According to a survey conducted in 2022, more than 40% of Americans aspire to start or purchase their own businesses. This is a positive thing since small businesses are the backbone of the American economy. In fact, 99.9% of all US businesses are small. More than 33 million small businesses employ over 61.7 million workers, per the SBA’s Office of Advocacy. Yet less than 7% of Americans are small business owners.

If you are considering starting or buying a small business, you need to ask yourself if you have what it takes to become a small business owner. Several vital attributes are common to successful small business owners. Read through the following list and score yourself one point for each attribute that applies to you. The higher the score, the more prepared you are to be a business owner.

Attributes of Successful Business Owners:

  1. Is your spouse supportive of your plan? If you’re married, it’s crucial that your spouse is supportive of your decision to start a business. In the beginning, starting a business will consume a significant amount of your time and energy. Having a spouse who feels neglected or unheard can add unnecessary stress to an already challenging situation.
  2. Are you willing to put in long hours to get your business up and running? During the initial stages of your business, it is essential to focus on raising awareness about your company’s existence while catering to the needs of your early customers. In the beginning, you may be the sole member of your company and will need to work long hours both within and on the business.
  3. Do you have money to invest in starting your business? It’s important to remember that no lender will provide the entire amount required to start a new business. You need to save up a substantial amount of money to invest in yourself and your company. Generally, 15-25% of the total start-up costs are required.
  4. Is there other household income to support your family while you launch your business? Some business owners can start their business on a small scale while maintaining their full-time jobs. This is ideal, but it is only realistic for some people. You may have to give up your secure paycheck to start. It is helpful to have other sources of income to pay the bills until your business begins to generate sufficient revenues to make a profit. Other sources of income might include your spouse’s wages or salary, retirement, disability, investments, and rental income.
  5. Did you operate a lemon stand or paper route as a child? Having experience owning a business before can prove highly beneficial when taking on bigger and more complex ventures. The lessons learned from prior business ownership can help you better understand the importance of strategic planning, financial management, and effective communication with stakeholders. Additionally, you have gained valuable insights into building and maintaining successful relationships with clients, employees, and other partners in the business world. Overall, prior business ownership provides a wealth of knowledge and experience that can help you navigate the challenges of entrepreneurship with greater confidence and success.
  6. Do you have close relatives or friends who are business owners? Experienced business owners are typically happy to share their keys to success and the lessons learned from their mistakes.
  7. Have you worked for and been in close contact with the owner of a small business? If so, you may have witnessed their decision-making processes and experienced times when you disagreed with their decisions.
  8. Have you had management experience in any business? The responsibility of making decisions and guiding employees helps prepare you for owning and running your own business.
  9. Have you had various functional work experiences, such as accounting, finance, or marketing? In your own business, you will have the ultimate decision-making authority for every aspect. Having some experience in many different areas will help you be better prepared.
  10. Have you been frustrated by having your work-improvement suggestions rejected by those in management above you? Those who note inefficiencies and problems in the workplace are naturally inclined to want to run their own businesses and test their solutions.
  11. Are you a person of action rather than a dreamer? While the idea of owning a business appeals to many, it takes a great deal of hard work and determination to turn that dream into a reality. Unfortunately, only a small fraction of those who dream of business ownership are willing to put in the necessary effort and dedication to make it happen.
  12. Are you a risk taker? Starting a business is risky. It requires you to leave the comfort of a reliable, steady paycheck for the uncertain possibility of great success and satisfaction. But it also involves the possibility of failure.
  13. Do you enjoy working with other people? Owning your own business will force you to interact with many different groups of people, including employees, networking partners, lenders, business development leaders, and competitors.
  14. Are you able to delegate effectively? Running your own business will require you to let go of many tasks so that you can focus on the tasks that only you can do. You will have to train your employees and then trust them to do the tasks assigned without constantly looking over their shoulders.
  15. Do the employees you supervise in your current job respect you and work hard for you? It is important that your employees see you as the leader and take direction from you. This does not mean that you become a dictator. Listen to your employees and let them share their ideas. Ultimately, however, you will make the final decisions, and your employees have to respect that and follow your directives.
  16. Are you someone who can adapt to new situations easily and is comfortable with change? As soon as you start to feel relaxed, things will change. Change comes from many sources outside of your control, such as new competition, inflation, and new regulations. You must be flexible and adapt to changes you cannot control.

If you are seriously considering taking the plunge into business ownership, join me over the next few months as I continue to share what I learned as a business owner and a full-time small business consultant.

Why Do You Want to Own Your Own Business?

During my initial meeting with a new client, I generally ask about their motivation behind starting a business. In my experience of 17 years, I have come across various answers, ranging from “I have extensive knowledge about this industry and can perform better than my previous employers” to “My boss is reaping all the benefits of my hard work, and I feel it’s unjust.”

LivePlan conducted a survey in 2022 to explore why people start their own businesses. The survey results revealed the seven most common motivations behind entrepreneurship, shedding light on the factors driving individuals to take the leap into self-employment.

  1. To pursue their passion. Starting a business to pursue your passion is often cited as a top reason. Mark Twain reportedly said, “Find a job you love, and you will never have to work a day in your life.” If you can earn a livelihood by following your passion, then you will likely find your work fulfilling. However, there are a few things you should keep in mind:
    A. Your passion may be a better side hustle than a full-time business, particularly in the beginning.
    B. You may find less joy in doing the hobby or skill you loved when you have to do it to pay the bills.
  2. To create generational wealth. Creating generational wealth has become a popular term nowadays as people understand that successful business owners can pass down a thriving business to their children. However, it’s essential to keep in mind that this is a rare occurrence. Many children do not wish to follow in their parents’ footsteps, and only 20% of the time do children take over the family business. Furthermore, most family businesses rarely survive to the third or fourth generation due to the younger generations’ lack of preparation or passion.
  3. To support the community and help others. Supporting your community can be achieved by creating job opportunities and earning a significant profit, which then can be shared with those in need. Starting a business can be a great way to achieve this noble goal. However, success is crucial to fulfill this mission. Therefore, running your business according to best business practices is essential.
  4. To turn a side gig into a full-fledged business. This reason is similar to the first one, but it is different in that your side gig may not necessarily be your passion. Your side project may have started because you noticed a need that you could meet. For example, you may have realized that many houses in your neighborhood, including your own, desperately needed power washing. So, you bought a power washer and started washing houses for a fee when you weren’t working your regular job. Over time, your side hustle may grow to the point
    where you could do it full-time. Many of my clients are starting a side job with the goal of developing it into their full-time businesses.
  5. To challenge the status quo. Some of my clients are frustrated with their bosses who keep doing things “the same old way.” They have observed that certain tasks could be accomplished more efficiently, employees could be given more authority, and customer support policies could be improved. However, they do not feel there is an atmosphere at the workplace to challenge their bosses to change. As a result, they are considering starting their own businesses to put their ideas into practice.
  6. To achieve better family life balance and flexibility. In my area, many people travel long distances to work in either the nation’s capital or my state’s capital. They spend several hours commuting on highways, in addition to the time they put in at their jobs. However, they often believe that their quality of life would improve if they could work locally and have more control over their schedules. Whether this balance is achievable depends on the type of business they choose.
    A. Starting and growing a business requires a lot of hard work and dedication, and many business owners put in long hours to establish their businesses. For government contractors, consultants, marketers, and salespeople, networking and building professional relationships are especially important during the early stages of their businesses.
    B. Retail shops, restaurants, and hospitality businesses are typically busiest on weekends, evenings, and holidays. However, these businesses do offer owners the opportunity to take time off during the weekdays. This option can be a good choice if you would like to travel during the off-season or have a few days off mid-week.
  7. To be the boss. According to a recent survey, almost half of the participants (47%) expressed their desire to become entrepreneurs and be their own boss. For some people, the idea of being in charge of one’s own business also comes with a sense that other people respect you. However, it also entails the crucial responsibility of effectively managing and developing the enterprise.

While there are many compelling reasons to start a business, such as being your own boss, pursuing your passion, or achieving financial independence, these reasons alone are not enough to ensure success. To set yourself up for success, you will need to do your due diligence, develop a comprehensive business plan, and gain a deep understanding of your target market and industry trends. You must also be equipped with the necessary skills to manage business operations effectively and lead and motivate employees. Only with a combination of these factors can you increase your chances of building a thriving and sustainable business.

Six Questions to Ask Yourself Before Starting a Small Business

Are you one of the millions of Americans considering opening a business? Before taking the plunge into business ownership, ask yourself these questions and answer them as honestly as possible.

Am I comfortable taking risks? Risk is an inherent part of starting a business. If you’re considering leaving your current job to start your business, you’ll be giving up a steady income. There’s also the risk of depending on your business to provide for your family’s needs. If you’re uncomfortable with risk, starting a business may not be the right choice for you.

Do I have money to invest in starting a business? Financial planning is a crucial aspect of starting a business. We often meet with people who don’t have any cash to invest in starting a business and expect to be able to borrow 100% of the startup costs. This is not a realistic expectation. A lender will expect the business owner to have 10- 20% of the startup funding needed. If you don’t have the capital to invest but you really desire to start a business, consider options that require little or no investment. Such enterprises include consulting services or virtual services you can do from home using only your computer.

Do I have time to devote to running a business? All businesses require time to work both in and on the business. Many business owners tell us that they work 40 or more hours in their businesses each week and work another 10 – 20 hours on the business. Working on the business includes marketing and networking efforts to find customers, invoicing, bill paying, scheduling, and many other necessary tasks that do not generate revenue.

Am I comfortable making decisions? A business owner makes many important decisions every day. These decisions include which jobs you want to bid on, the proper price to charge for your services, how you will market your services, and whether you should hire (or fire) an employee. If you are hesitant to make these decisions, business ownership may not fit your personality.

Do I have the expertise to do the work and run the business? We often encounter individuals lacking the skills to perform the tasks required to start their desired company. They plan to hire the appropriate individuals to complete the job. For instance, a non-chef may open a restaurant with the intention of employing a talented chef. This approach may prove successful until the hired chef departs for another position. Prospective business owners need to have some training and experience in the services they will offer so they can do the work themselves when necessary. They also need to be capable of recognizing when an employee is not doing the job properly or well.

Does my family support my decision? Running a business is hard work. It requires working long hours and committing family financial resources to succeed. You need the support of those in your immediate family. You should reconsider if those closest to you do not support your decision.

If you answered yes to these six questions, you may be ready to move forward with starting your own business. This series of blogs will give you more valuable information that you need to be well-prepared for success.