Are you fed up with the daily grind and are you ready to become your own boss? I remember when I realized being a small business owner would be my next career. I had the job I always wanted, but I was getting headaches on the way to work in the morning. I knew I was capable of doing so something more that would allow me to make a difference and where I would also make money. So, I used every spare moment to start planning to become my own boss.
The skills needed to be successful in the midst of the new economy puts tremendous pressure on today’s entrepreneurs. But now is still a great time to start a small business. Your skills, network, discipline, niche focus, optimism and ability to be coachable will determine whether your new business is a success or failure. I have developed the Emerson Planning System with six things to consider when you are ready to become your own boss.
1. Develop a Life Plan Before You Ever Write a Business Plan
Regardless of your business idea, you must first figure out what you want out of life. By developing a life plan, it will enable you to build a business that aligns with your life goals.
Too many people start businesses that are not good for them and their families. Your life plan should outline your financial, personal, learning and retirement goals. For example, you need to know up front how much money you need to make in order to to be happy. The goals you outline in your life plan will play a role in just about every decision you make as you are starting your business. Decisions relating to how you structure your business must be addressed:
- Will you try to pursue angel or venture funding?
- Do you want to have one great boutique or a chain of them?
- Will you take on a partner?
All of these decisions must be measured against your big picture goals for your life.
2. Getting Your Finances Ready to Become an Entrepreneur
The money to start your business will come from your right or left pocket. Your ability to save has everything to do with your ability to become your own boss. Before you jump out there and quit your job, I suggest planning at least 12 months in advance. You should try to save 20%-40% of every paycheck. If you don’t already do so, you should start living by a budget and look for ways to cut your expenses. Track your family expenses for a month and you’ll quickly recognize all the ways you and your family waste money. In the beginning, you are your business’ credit. You should work towards having a 750 or higher credit score. You also need to eliminate as much debt as possible. Starting a business while carrying a bunch of credit card debt will put a lot of pressure on you. It’s best to be debt free so you can go without a paycheck for a year or two before you’ll be able to pay yourself.
3. Examine the Skills You Need to Run Your Business
Think long and hard about the business you want to start. You should look at what skills you have and what skills you need to run your business. Be honest when making your list of skills. If you are not sure about your strengths, ask three people close you to what they think are your best skills—you might be surprised by their responses. You should try to work for a business like the one you plan to start, so you can learn the ropes. You may need to learn basic computer skills such as Excel, Access or Powerpoint. Or you might also need to learn accounting software or Adobe Photoshop or the latest social networking sites such as Facebook, LinkedIn, and Twitter. You might also need to learn WordPress so that you can set up your website or blog without being held captive by a web developer. You more stills you have the less you will need to purchase from others.
4. Are You Ready to Work From Home?
To keep your startup expenses low you should consider working from home. Your spare bedroom, basement, or kitchen table will do just fine as an office until you can afford professional office space. Consider yourself a spare room tycoon. One of the key considerations in working from home is – can you handle it? It takes real discipline to work from home. Can you stay focused on your work without letting your thoughts defeat you? Earlier this year, I wrote a blog post: Are You Fit to Work From Home? It has a few tips for evaluating whether working from home could be for you.
5. Who’s Buying and Why?
The most important questions about your business are: Who are your customers, and why will they buy from you? In other words, what is your signature move or secret sauce? There are lots of people who sell widgets. Why are your widgets special? The new economy is all about niche marketing. You really can niche to get rich as a small business. I suggest you develop a marketing plan before the business plan to make sure there is a viable market for your product or service. It will also give you a sense of accomplishment and the courage to tackle the rest of the business plan. However, If you can’t answer these questions then you need to go back to the drawing board and come up with another business idea.
6. Your Business Plan is Your Roadmap for Success
You must plan for success; it will not just happen to you. You need to write a business plan to run your business. It is very helpful to think through how you are going to operate your business including getting sales, what happens when a sale is made and how many sales you will generate each quarter and year. Don’t be one of those business owners who spends more time working on your logo than you spend working on your business plan. I suggest starting out with business plan software. Then, you should enroll in a business plan class at a Small Business Development Center (SBDC) or community college to finish the business plan.
Typically, you need to interact with a human so you can ask questions and get the help you need to finish your business plan. You can also check out B Plans for hundreds of sample business plans that you can review for free. A business plan is your hypothesis of what you think is going to happen in your business. It will change once you get open for business. You should use your business plan to run your business, in fact, it should be reviewed and updated every 2-3 months to make sure your business is on the right track.
Are there any other steps that should be considered when starting a small business?
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Melinda Emerson, known as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist whose mission is to end small business failure. Her firm MFE Consulting, LLC specializes in small business start-up, social media marketing and business development. She hosts #Smallbizchat weekly on Twitter for emerging entrepreneurs. Melinda also publishes a blog, Succeed as Your Own Boss. Her first book Become Your Own Boss in 12 Months was released in March 2010 by Adams Media.
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