Seven things you need to know to start a business

DFN: Sound advice to consider BEFORE launching your business.

7 things you need to know to start a business
Originally published October 11, 2009 at 12:36 p.m.

At one time or another, you likely considered launching your own business. You either followed your dream or remained put for this reason or that.

As the economy recovers at the tail end of recession, now is as good a time as any to start a business, some experts say.

“A good business idea would take care of itself,” said Joe Humphreys, associate director of the University of Houston-Victoria’s Small Business Development Center. “If you cater to the market that has money, they have money whether the economy is good or not. If the business is a good idea, it’s a good idea.”

To push your idea from brainchild to fruition, consider the following advice.

7 things you need to know to start a business

1) Your business idea should stem from a personal passion. What excites you? To take risk and to endure the bumps of business, you need resolve, Humphreys said. Most business owners say you’ll never work harder than you do for yourself. Will your idea prompt
long-lasting passion?

2) Seek a mentor, Victoria Mayor Will Armstrong, a 50-year
businessman, suggests. Talk to people who have been there, done that. “There are so many things you can’t possibly know when just starting out,” Armstrong said. “That’s an advantage. If you knew everything, you might not start.”

3) Write a business plan, said David Sather, president and founder of Victoria’s Sather Financial Group. “Do a thorough business plan, and not just a flimsy three- or four-page plan,” Sather said. “Any entrepreneur truly needs to evaluate the strengths, weaknesses, opportunities and threats to any business idea before they devote considerable time and money to that endeavor.” As the maxim suggests: If you fail to plan, plan to fail.

4) Research your potential customers. While much of this will be included in your business plan, it can’t be stressed enough. Find a specific need and fill it. “You have to know your customer,” said Tricia Lumpkin, owner of the Carriage House. “Your customer base will make you.” Before offering a product or service, first learn who needs or wants what you can offer. Sather said, “Go intern for someone first. I would go work for someone who is successful in that area so you can learn the ropes.”

5) Once you believe your business idea is sound, ensure your finances are in order, Armstrong said. “Debt kills,” Sather added. “Borrowing can work great when times are good. Borrowing can send you into bankruptcy in a hurry when things turn down and you cannot service your debt.” Amass a war chest that will carry you through the inevitable lean times. If you can start a business with cash, great. If you need to borrow, hope for the best and plan for the worst.

6) Prepare to work long, hard hours. “Prepare to sacrifice,” Lumpkin said. Some people envision their own business as an escape of sorts from the responsibilities of remaining an employee. All entrepreneurs know, however, that becoming the boss means you also become the janitor, secretary, mailroom boy and plumber.

7) Learn accounting, or at least how to navigate software such as Quick Books. Many new business owners fail to track income, expenses and accounts receivable, Humphreys said. “You’ve got to know what your sales and liabilities are,” he said. “You need to track the financial health of your business. You want to study your finances daily and weekly, and then monthly trends start to form.” If you don’t know where your money goes or comes from, you might as well kiss it goodbye.



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