3 Things You Must Do Before Starting a New BusinessSourceLink Admin
One of the things that makes entrepreneurship so amazing is that anyone can become a business owner. Starting a business doesn’t require a college degree, a ton of money or a lot of work experience. However, we don’t want to sugar coat it – not everyone is cut out for entrepreneurship and first-time business owners have to be prepared for the bumpy road ahead.
In our last blog, we met with business expert Judy Bumpus, client services manager of the Women’s Business Center of Kansas City, a free business center offering one-on-one counseling and training for entrepreneurs and small business owners. She shared some of the most common misconceptions first-time business owners have about starting a new business (you should read it).
We asked Judy for her biggest and most important advice on starting a business, and she did not hold back.
Note: Judy has been working alongside entrepreneurs and small business owners for more than 25 years, providing one-on-one counseling and training. She is the real deal. Take her advice to heart. Write it down. Memorize it. Share it.
Now, onto the advice.
Take a business or entrepreneur training class.
Take a business class or workshop before you start a business. (Our Missouri business calendar is a great place to start.)
Judy urges first-time business owners to take a business class, not just for education, but to shift their mindset from working at a business to working in a business.
“An entrepreneurship class starts to change the paradigm in your head. Being an entrepreneur is different than working at a regular business. You have to think very differently when it’s your business,” she says.
Part of the entrepreneurial mindset is always looking for new opportunities and innovations to improve or grow your business, being resourceful with what you already have, facing challenges with a fight and delegating tasks to appropriate professionals so you can focus on the business.
An added bonus of taking a business class is meeting fellow entrepreneurs and having real discussions.
“Group experience is invaluable for entrepreneurs. Sometimes it’s easy to dismiss advice from a facilitator, but hearing feedback from a fellow entrepreneur who is also in the class helps,” she says.
Start adding the entrepreneurs you meet to your support network of peers and advisors. Starting a business can be lonely and isolating so you’ll want a been-there, done-that group of friends to bounce ideas off of, learn from, or just commiserate with.
Create a business plan.
Yes, you really do need a business plan.
It doesn’t have to be a formal document, but whatever plans or strategies you have for your business in your head need to be written down so you can ensure you have a plan a, b and c for when your business faces new challenges. And if you’re planning on looking for funding from an outside party like a bank or investor, you will most definitely need a formal business plan so third parties can make an informed decision on whether or not they want to invest in your company. Businesses organized as a partnership need a well-drawn out business plan in case the relationship heads south or big changes come along the way.
Your business plan should identify key components like your competition, target market, sales projections and strategies.
“It helps entrepreneurs look at all of the issues and problems that can happen to the business allowing them to create backup plans if something fails or if the industry changes,” says Judy.
Words of warning: don’t follow the hype you hear on TV shows about startups and pitches.
“I hear startup entrepreneurs on TV say all the time, ‘I didn’t have a business plan, I just did it.’ And it always makes me cringe because a lot of people who ‘just did it’ have fall back resources when their plans fail,” she says. That’s why you have a business plan.
Conduct real research.
Understanding how much your business will cost to start and when your company will break even are legitimate concerns that you need real answers to before starting your business or pitching to investors. Knowing your cash flow and how projections work are integral to running a successful business. You can get this information by conducting research and collecting real data rather than generic predictions.
“A lot of the entrepreneurs we see don’t have fall back resources so when they are investing their money, energy and time, they need to negate their failure rate as much as they can. It doesn’t mean you won’t make mistakes but it allows you to make less mistakes if you have done the real research and not make up numbers,” says Judy.
Projections will only get you so far and are only projections – not the actual cost of doing business. Do your research by finding out exactly how much it will cost your company to reach significant milestones like rent a storefront and hire your first employee or even obtain liability insurance. Put in the work and literally call real estate and insurance companies for quotes, complete expense reports and calculate the cost of doing business.
- Take a business class or entrepreneurship training course. Go to the MOSourceLink calendar to find a business class near you.
- Create a business plan. We have several free guides to get you started or you can meet with a business counselor to help walk you through the steps of writing your own business plan.
- Conduct real research before starting a new business.
Take the next step
Remember you have MOSourceLink on your side ready to connect you with the resources you need to succeed. Give us a call at 866-870-6500 to speak with real folks who can help you take the next steps to starting your own business.