Maybe you've just had a light-bulb moment, revealing an idea that will change life as we know it. Perhaps you have just been laid off from your job and don't want your livelihood in someone else's hands anymore. Or maybe you just want to take a shot at working for yourself for a while.
Whatever your reason for starting a business--and whatever type of business you're starting--there are some universal best practices for budding entrepreneurs. We've tapped the minds of business experts and successful business owners to share their secrets for success in the following 50 essential steps to startup.
What's the Big Idea?
1. Get a bright idea. When Jennifer Liu, 45, left her post as an executive with L'Oreal, she was intent on launching a business designing high-end chandeliers. However, when she went to show her designs at a gift show in Atlanta, the thing that lit up buyers' faces was a purse she had fashioned for fun out of a stuffed animal. By the 2006 show, she and partner Barbara Goodyear, 56, had launched Fuzzy Nation, a Lafayette, New Jersey, manufacturer and distributor of dog-inspired handbags and other accessories, which now fetches about $1.8 million a year. Liu says the key to coming up with a successful business idea was being flexible and open to people's reactions.
"You have to have either some experience with the idea or a way of finding out what you need to know about the type of business you want to start," says Bern Lefson, a management counselor at the Orange County, California, chapter of SCORE, a free business consulting organization staffed by volunteer veteran business owners and executives. The other ingredient for success, says Lefson, is passion. In addition to having others show interest in the idea, you have to be excited about it, he says, because you're going to be spending a significant amount of time and resources to develop it into a business.
2. Research your industry. Once you've got the idea in place, you need to figure out if there's a market for it, says Lefson. Every state has SCORE chapters and Small Business Development Centers, which offer a variety of resources and free access to knowledgeable business advisors. Also, consider the reference librarian at your local library your new best friend. Libraries usually either have business directories and databases on-site or can get access to them. These guides, which would otherwise require expensive subscriptions, can yield important data about market size and industry trends. Lefson adds that reference librarians or SBA resources can also help you uncover industry associations and trade publications that have the latest data on your market sector. Doing a bit of exploration on your favorite search engine can be helpful, too. Try searching the name of your industry along with "association" or "trade magazine."
Another great resource is other business owners who are doing what you want to do, especially if they're not direct competitors, says small-business expert Marcia Layton Turner, Entrepreneur columnist and author of The Unofficial Guide to Starting a Small Business. So go ahead: Ask a successful entrepreneur who's living your dream for advice.
3. Check out the competition. Those same industry resources can help you get a good understanding of your competitors and their strengths. When Jim Campbell, 44, launched third-party logistics company Bridge Logistics (bridgelogisticsinc.com) with his brother, Jeff, 37, and Paul Lanham, 37, he knew the Cincinnati business would be up against some industry behemoths, as companies like FedEx and UPS had been making inroads as comprehensive shipping and logistics providers. The trio decided to carve out a niche for themselves as the middlemen, acting as an external transportation department for their customers and representing fleets averaging 20 or more vehicles.
The key to success in beating the competition is to find what you do better and build on that, says Jim Campbell. "We are much smaller than those 800-pound gorillas, but we bring a more interpersonal level of communication and service to our customers. We're a very passionate team, and we're always looking for ways to be better."
4. Name that business. When considering business monikers, it's important to think of the long-term implications of the name, says Turner. Consider the ease of pronunciation and the different meanings.
Nick Nanton, attorney and managing partner of law firm Dicks & Nanton PA, says you need to search online to see if another company is using the name you want to use. If your online search comes up clear, he advises using an attorney or specialized service to run a trademark search, which he estimates will cost "between $500 and $2,000, depending on how involved it is." If no one has trademarked your name, doing so yourself will protect you from others cashing in on the brand you build.
5. Protect your idea. While you're getting started, you'll also need to ensure that your idea isn't swiped, especially if it's something unique. Liu didn't hesitate to take action when she found out a retailer was about to infringe on her ideas. "I sent a letter from my lawyer saying that we held many copyrights and patents, just FYI," she says. What would have been a devastating blow to her business actually ended up being an opportunity for her to sell her bags at that retailer.
Nanton advises keeping records of the development of your idea and investing in the proper registrations and protections as you ramp up. "Get all the protections you can," he says, referring to patents, copyrights and trademarks. That will prevent others from stealing your intellectual property.
6. Organize wisely. When deciding on the legal form of your business, you have a number of options: sole proprietorship, partnership, limited liability company (LLC), Subchapter C corporation (C corp) and Subchapter S corporation (S corp). It's important to choose the right form of organization for the long-term goals of your business. Sole proprietorships make no distinction between the individual and the business and usually just require you to register a fictitious name. However, they also offer no protection of personal assets, as S corps, C corps and LLCs do. An S corp, like a C corp, often offers tax advantages, but allows no more than 100 shareholders, says Nanton, so you can't take it public. The formation of a business can be changed later on, but it's better to consult with your attorney or accountant to determine the best form at the outset.
7. Take three. Ask business owners you respect to recommend your startup's three best friends: a good accountant, a good attorney and a good banker, says Lefson. Consult these professionals frequently as you start your business to ensure you're getting started on the right foot. Your accountant can help you examine the financial health of your business and set up systems for bookkeeping and recordkeeping for taxes. Your attorney can help you draft and review contracts, as well as abide by relevant local and state laws. A good banker can help you explore financial resources. Each of these individuals may be a source for business referrals, says Lefson, so keep them apprised of your progress and growth by sending them notes, news clippings and press releases about your business on a regular basis.
8. Insure yourself. When Leslie Lancry, 40, launched Language Stars (languagestars.com), a $4.5 million children's foreign language school in Chicago, it seemed as though every time she turned around, there was another insurance bill.
From workers' compensation and automobile insurance to liability and health insurance, business owners need to understand the insurance requirements in their states, says Lefson. Contact your state insurance board to find out the particulars. Then ask your colleagues, attorney or accountant for the name of a good insurance agent to make sure you are protecting yourself against loss and liability.
Setting up Shop
9. Locate. Many entrepreneurs start their businesses at home to save money. When Evan Blaustein, 36, launched Mimoco, a Boston manufacturer of designer USB drives, with his wife, C�cile, 36, they kept operations at home until they had five employees working out of their house--and a baby on the way. "When you're starting a company, your personal life is your work life, so we chose an office a mile from the house, with a day-care center nearby," says Blaustein, who pro-jects 2008 sales of $8 million. Because Mimoco doesn't have a lot of inbound client traffic, it didn't need a posh space. Blaustein chose a location right next to the train tracks, even though passing trains are loud enough to interrupt phone conversations. He says, "We had to find a place we could afford and that could expand with us."
10. Learn about laws and licenses. Zoning laws can cause head-aches if you don't understand them, says Lefson. Launching a homebased business in an area that doesn't allow them or renting space that isn't zoned for what you do can end up costing you money in fines and relocation costs, he says. Check with your municipality about what your area does and doesn't allow. While you're at town hall, find out about any business licenses or permits you will need to operate within the law, because each municipality has different requirements.
11. Negotiate a lease. Once you've found the location that you dreamed of, the owner is going to want you to sign a lease. Nanton and his partner, J.W. Dicks, caution that you should allow as little personal liability as possible. Try to reduce a 12-month guarantee to six months, says Dicks, adding, "You have more flexibility when there's a lot of office space for rent in the area." It's a good idea to have your attorney review the lease before you sign it. In addition, take photographs of the property's condition before you occupy it to prove what condition it was in when you moved in. Take more pictures when you vacate, just in case there are questions about any damage done.
12. Furnish your office. No business should blow its startup funding on brand-new mahogany desks and granite counters in the employee break area. However, for some types of businesses--law practices, consulting firms, financial planning firms and so on--it's important to look prosperous to your clients, says Turner. She suggests pinching pennies on office furnishings by searching used office furniture dealers, furniture listings on Craigslist, in your newspaper's classifieds or on eBay. Call local auction companies to see if they're auctioning or liquidating furniture from companies that are downsizing or closing.
13. Consider equipment investments. When Molly Fuller, 32, co-founded Hands On Gourmet Co. in San Francisco, she was lucky that her boy-friend and business partner, Stephen Gibbs, 42, was a chef and had most of the equipment they needed for their culinary event planning company. As the pair and their partner, Anne McCarten-Gibbs, 45, grew the company, they purchased pieces as they needed them for events, making do with what they had until they earned the money to purchase new pieces. That helped the company bootstrap itself and remain debt-free. Hands On expects $1.5 million in sales this year.
14. Use signage. Use your location to promote your business. Lancry uses each of her seven Language Stars locations to display bright signage that includes her company's logo, phone number, website and tagline so it's clearly visible from the street. "While most of our business is word-of-mouth," she says, "we do get calls from people who saw the signs."
15. Make financial projections. In the beginning, making financial projections required poring over Bridge Logistics' numbers again and again, refining and readjusting, says Campbell. By the second year, he and his partners were more in tune with the rhythms of the business and knew how to more accurately predict their revenue and expenses for the coming year. This year, that sales projection totals $10 million.
Make sure your projections are in line with industry standards, especially if you're looking for funding, says Cheryl Cheng, director of marketing at VC firm BlueRun Ventures. "You don't have to have your financials completely buttoned up. But we want to see that you understand the market. If you haven't even read [industry research and analysis] reports and your numbers are a third or three times the size of everyone else's, then there's a problem."
16. Budget. The leaner you're running, the more your business needs a budget listing various expenditures and how much will be allotted to each, explains Turner.
Cheng wants to see companies that have "cut the fat." What's out: catered lunches and fat expense accounts. What's in: financial discipline.
17. Prep for the tax man. Lefson emphasizes the importance of understanding the taxes you'll need to pay and keeping proper records. At Portland, Oregon, toy store Piccolo Mondo Toys LLC, owners Michelle, 38, and Merrick Smith, 48, dodged the sales tax bullet--Oregon doesn't have one--but they keep records of the million-dollar company's income and expenses through their point-of-sale program and paper files.
18. Find funds. Bootstrapping is great, but it will often only get you so far. When Jeff Smith, 45, and his wife, Carolyn Duryea, 45, wanted to expand Hourglass, their successful wine business in St. Helena, California, they decided to bring in partners Richard Chilton, 50, and Mike Clark, 48, whose buy-in funds would be used to purchase more property and build a winery on the premises. Up until that time, Hourglass' wines had been processed and bottled at another wine maker.
Taking on additional partners is one way to find funds. Venture capital is another. Cheng says venture capitalists are looking for businesses with growth potential and an exit strategy, so equity in the company can be extracted. Both of these options require that you give up ownership in the company, though.
Debt financing can come in the form of credit cards: Liliana Somma, 32, of the School of Dance and Music in Hermosa Beach, California, financed a $30,000 dance floor on credit cards that she paid off within a year. This year, she projects sales of $1.8 million.
And remember that all-important banker? Lefson says that he or she can be invaluable in helping your business arrange loans or lines of credit.
19. Make a plan. Whatever type of money you try to obtain, you are going to need a business plan, says Lefson. The plan will include explanations of what your business is, who your employees and key management personnel are, financial projections, and expected sales and marketing activities. It may also include a growth plan and other elements. SCORE and most SBDCs offer counseling to help entrepreneurs craft their business plans. "All lenders and investors are going to want to see a business plan that gives them assurances they will be repaid," Lefson says. A business plan can also act as a touchstone, keeping your business on course.
20. Ask for the cash. If you want to attract money from other people, having a clear plan is essential. Where many entrepreneurs fail is by not asking for enough money, points out Cheng. "We want to make sure that we put enough into the company to get them to their next milestone," she says. "The worst thing you could do is give them enough to get halfway there. Then they will need to devote resources to raising more money when they haven't really accomplished anything yet."
Power of the People
21. Hire right. Blaustein knew it was time to hire Mimoco's first employee when the holiday season was upon him and it wasn't possible for him to do what needed to be done. He hired an employee to help with managing orders. "She burned out after the first six weeks," he recalls. "I was sad to see her go, but she got me through the holidays." Next time around, he took careful stock of the personality traits he wanted for the position. His next hire was a former record-shop employee with a creative streak that fit Blaustein's personality and vision. That same employee has been with him nearly three years now.
22. Create specific job descriptions. Blaustein may have done better from the get-go if he had created job descriptions for his first employee. "The job description needs to be specific," he advises, because people do better when they have a sense of purpose in the workplace. The job description should include responsibilities as well as criteria by which the employee will be reviewed. Once you have a description of the job you need to fill, you can ask more direct and relevant questions to find out if this person has the skills, temperament and attitude you're seeking.
23. Outsource. Sometimes outsourcing lets you access resources and talent you couldn't afford otherwise. Hourglass launched on a piece of property that founder Jeff Smith's family owned. From the begining, Smith and his wife outsourced almost everything in the company. The grapes were tended and harvested by a separate company. The wine was processed and bottled at a nearby winery. Smith says building the winery on his property initially would have cost millions, but he was able to produce his wine for several years for a fraction of that cost. Now, carrying no debt, the company projects sales of $2 million this year.
24. Consult the best. Similarly, the use of consultants can give you access to top-level talent that you couldn't afford to hire full time, says Turner.
Fuller agrees: She works with a marketing consultant to handle all marketing communications-related activities and has recently finished an engagement with a CRM consultant. She also works with a business coach who helps her set and accomplish specific business-related goals. In each case, she's been able to save money by not hiring a full-time staff member while still reaping the rewards of having access to a seasoned professional.
25. Source your stuff. Before she opened Piccolo Mondo's doors, Michelle Smith pored over trade magazines, visited trade shows and conducted many Google searches to find suppliers. She also called several manufacturing representatives who deal with smaller toy companies. Gathering information from many different sources allowed her to handpick the product mix she would carry.
Instead of searching for an agent to handle factory-finding, handbag maven Liu, who speaks fluent Chinese, took the search for an overseas manufacturer into her own hands. She got on the phone, then got on a plane and visited factories in China, conversing with reps from prospective providers until she found one who was willing to deal with her small initial runs.
26. Offer employee benefits. TheSuperGroup, an Atlanta creative agency, covered health insurance premiums starting with its first employee. Now the $3 million company's 12 employees receive paid health, vision and dental insurance, as well as an annual company retreat and an hour break each day (in addition to lunch) to do something creative outside of their jobs. "In our industry, we sell our talent," says Chris Wallace, 28, who co-owns the company with Gabe Aldridge, 34, and Brad Lewis, 37. "We need to do everything we possibly can to attract and keep the right people."
Since its founding in 2002, the company has only fired one person and no one has ever quit, says Wallace. Part of the benefits that TheSuperGroup offers is its office culture: Once the business started making money, the founders invested in a cool office, complete with a big-screen TV and classic games like Battlezone and Tron. Senior employees also enjoy profit-sharing perks, says Wallace.
27. Pay up. In the beginning, Wallace says that he, Aldridge and Lewis drew straws to see who would have to learn Quickbooks and manage payroll. Lewis lost and had been the keeper of paychecks until last year, when the trio decided that his time would be better spent on management issues instead of cutting paychecks. They recently hired a payroll firm, which decreases their liability. Most payroll firms ensure that taxes are paid in a timely manner, eliminating the possibility of liability due to missed tax payments. That wasn't an issue for TheSuperGroup, but it's one less thing the partners have to do themselves, says Wallace. "It gets to a point where you say, 'I think we could make more money if you took the time you put toward payroll and put it to other things.' That's the time to let go of the reins."
28. Motivate employees. Campbell says the key to keeping employees motivated is to know what's important to them. For many of the employees at Bridge Logistics, it was money. So Campbell offers them financial incentives based on new business and customer satisfaction.
Somma uses other types of incentives for her 40-some employees, who are mainly dance and music instructors. To get them to read more and understand the business, she may give a gift card. The instructor who missed the fewest classes was rewarded with two tickets to Hawaii. "If you use these kinds of surprise incentives," she says, "people want to go the extra mile and do their jobs better."
29. Fire quickly. On the flip side, Somma adds that if you have a bad apple in the bunch, you should take steps to remove him or her quickly. She says many people wait too long to fire someone who isn't working out. She usually has a few conversations with the person to let him or her know that performance isn't up to snuff and to try to work it out. But if that doesn't work, she will terminate the employment.
Dicks says it's important to understand the employment laws in your state so you can remain within the law when you are terminating someone's employment. Firing an employee may also trigger an unemployment compensation expense. You can learn more about unemployment insurance and related issues through your state's Department of Labor.
Getting the Word Out
30. Brand it. As you begin to develop your brand, Turner advises asking: Who is your target audience? Why will they buy from you? What makes your company's products or services superior to what's currently on the market? What are your company's competitive advantages? Questions like these will help you determine if you're the high-end, high-service provider or the less expensive, high-volume provider, for example. "If you take the time to think through how to make your business stand out in a good way among your target audience," says Fuller, "you'll be heads and shoulders above the competition."
31. Target your audience. Liu refocused her entire business based on the feedback of one trade show, so it's no surprise that she is a big advocate of hitting industry shows and conferences, either as an exhibitor or an attendee, to gather information.
Michelle Smith's toy store is located in a multicultural community, so she has built her business around that concept. She features a different country each month, importing toys related to and directly from that country. Her target audience of affluent, well-traveled parents doesn't mind that she avoids price promotions in favor of building a more upscale brand, delivering toys from various countries that can't be found in many Portland shops.
32. Promote according to plan. Having a set marketing plan can help you avoid wasting money. When you don't have a plan, it's easy to jump at every opportunity that comes along. That kind of scattershot approach won't work as well as coming up with a steady, measured plan for getting your message out to your target audience, says Lefson. Look at all the opportunities available to you: public relations, advertising, direct mail, online promotions, events and the like. Examine their reach and the quality of the audience they will hit, then choose the best bets.
33. Set a marketing budget. The rule of thumb is that small businesses should spend between 4 percent and 10 percent of gross sales on marketing each year, with newer companies spending more on the high end of that range, explains Turner. In the beginning, you need to do some legwork to understand the best ways to reach your audience, then crunch numbers to figure out how much you need to spend.
34. Work your network. One of the best ways to attract business is to get involved in places where potential customers and referral sources are likely to be and spread the word about your business, explains Campbell. Your local chamber of commerce, business associations, national trade associations or even alumni groups can be places to meet prospects.
Going online and participating in social networking groups, message boards and other places where people in your industry are connecting in meaningful and productive ways is another networking method, says Turner.
35. Generate buzz. The wine industry is very viral, and Jeff Smith took advantage of that fact to get people talking about Hourglass wines. He held tastings with writers from publications like Wine Enthusiast, Wine Spectator and others to generate publicity. He made sure his wine was in Tra Vigne restaurant in St. Helena, a hub for oenophiles interested in trying new vintages. The "new" factor helped him get attention, he says. After that, he had to find more creative ways to get attention: He hosted tasting events, which allowed him to reach out to more customers who would talk about his wine to others.
36. Connect online. As the co-owner of an interactive marketing agency, Wallace knows the importance of a good website. He and his colleagues devote a great deal of time to building the site, keeping it updated and optimizing it for search engines. "We want to make sure that when someone types in 'Atlanta' and 'digital agency,' we come up," he says. "That's someone who's already interested in what we do."
Michelle Smith uses the internet to frequent message boards for toy retailers. Such online networking yielded information-sharing that has saved her money and brought about connections with other toy-store owners in the Pacific Northwest, who get together for dinner from time to time.
Fuller uses Google Analytics to see how many people are coming to handsongourmet.com and what search terms and links get them there.
37. Place an ad. Sometimes buzz and networking can only get you so far before you need to increase your exposure to your audience, says Turner. Buying advertising in print, broadcast, outdoor or online media can help you do that.
But don't just write a check and be done with it--there are often creative perks you can work out with the media. In Fuller's case, she is paying for half the cost of an ad in a regional glossy magazine and trading the other half of the cost for the company's services at an event sponsored by the magazine. It's a win-win: She gets half off the ad, plus she gets to showcase Hands On Gourmet to a cross section of the magazine's advertisers who may be pro-spective customers.
Managing Customer Relationships
38. Sell well. Understanding your business' sales needs is critical to adequate staffing, says Lefson. Some companies require sales representatives on staff, while others work through distribution companies or independent manufacturers' reps, who are essentially salespeople for hire representing a number of different product lines in an industry. Others only require in-house salespeople who manage phone or internet orders or in-bound traffic.
39. Set up customer service. Instead of having one person sell to the customer and another service the account, Bridge Logistics has one person handle both. "In a lot of companies, you have one person out on the street developing business, and the customer calls someone else when they need support," says Campbell. "In those situations, there tends to be a lack of ownership."
Michelle Smith clearly posts her policies for her retail customers: full refund if returned with a receipt within 30 days, store credit for items returned after that time or without a receipt. In addition, she serves her customers by offering convenient services like wish lists, where young customers can identify their most-coveted gifts in time for birthdays, holidays or other gifting occasions.
40. Manage your customer data. Even with more than 2,600 students, Somma wants to keep a small-studio feel with individualized attention. She does that with a database that houses information on her students' classes, needs and preferences. When an issue comes up in a class or a student has a special need, she enters it into the database. "If a 9-year-old in the Thursday 4:15 class is having trouble with a step, I know about it, because it's in the computer," she says.
Fuller hired a CRM consultant to help maximize her use of CRM portal Salesforce.com, saving time and allowing her to communicate more effectively and efficiently with her customers. Says Fuller, "The mail-merge functionality she showed us was worth every penny of her fee."
41. Go with the cash flow. Of the myriad setbacks that startups must overcome, cash-flow crunches are probably the most common. Michelle Smith has been able to renegotiate terms with some of her suppliers to accept payment days after the traditional net-30. "Some have special terms or pricing at toy shows, and some will basically float you money the first year just to get in the store," she says, so negotiate your terms individually with vendors to preserve your cash as long as possible.
According to VC maven Cheng, having detailed cash-flow and expense projections will also help you avoid getting caught short.
42. Collect what you're due. At the same time, you need to stay on top of collections. Be sure that if you're extending credit, you review the terms with your attorney, says Nanton. You can often save money if you work up a draft of what you want to say and let the attorney doctor that, he says. Websites such as nolo.com offer good advice for getting started. Work with your bank and accountant to put measures into place to protect your business from losses due to credit card charge-backs, bounced checks and any other unexpected payment issues. Lefson says a good collection agency can also be an important ally. Find one by asking around or by contacting the Association of Credit and Collection Professionals.
43. Protect from theft. Having good checks and balances on the accounts staves off the risks of an employee helping himself or herself to the checkbook. At Piccolo Mondo, Merrick Smith is the bookkeeper. On the floor, Michelle tries to keep employees engaged with customers to ensure that the occasional sticky-fingered visitor doesn't have much of an opportunity to walk off with any items. Small items are placed near the register and more expensive items are placed on high shelves so it's noticeable when someone reaches for them, she says. The founders are also looking into new video surveillance cameras for the store to keep more of an eye on things.
44. Manage time to avoid burnout. While entrepreneurship isn't eating up all of Fuller's life, it is "nibbling at my toes," she admits. However, now that she has a strong staff, she finds more time for herself.
Somma has had the same experience, warning that, "You have to give up your tendency to want to control everything." She started training other instructors to teach students and maintain the fun tone in class so she could spend more time with her newborn son.
"When you're starting a new business, you do need to stay focused on it, but you can't do that 24/7 forever," says Turner. You need to tear yourself away from the business once in a while to avoid burnout, which can cause you to lose your enthusiasm overall. Taking a timeout can also refresh your thinking and make you more effective.
45. Avert disaster. Fires, floods, hurricanes, earthquakes, tornadoes: The evening news is filled with enough talk of disasters to make it clear that they can happen anytime, in virtually any place. Lefson says it's critical to protect yourself--first, with proper insurance for disasters to ensure you'll be reimbursed for loss of equipment, supplies and other assets. Keep backups of important paper and electronic files in alternative locations, as well. Backing up your data through a remote backup service such as iBackup.com or Mozy.com makes it possible for you to restore data if computers and on-site backup systems are destroyed.
46. Grow up. With enough research, promotion and effort, your business will begin to grow. The key is to know how big you want to get. Cheng says venture capitalists are going to want businesses that can grow big relatively quickly--or grow to fill a specific niche and be sold to a bigger company relatively quickly.
However, not all businesses fit that mold. Campbell says he and his partners don't want to be the next FedEx. "Once you get that big, you lose the personal relationships with customers and carriers, and your efficiency goes down," he says. "That's why [quality control] companies make millions. We want to remain lean and mean." It's up to you to decide how big you want your business to be.
47. Lay the foundation. Somma realized that if she wanted to grow her business, she wouldn't be able to teach every child who came in the door. So she began creating systems for everything from registration to bookkeeping to instruction. The more systems she had in place, she reasoned, the easier it would be to teach other people to do the jobs that needed to be done. The key was to keep the fun, motivational aspect that she brought to her classes. She created training models to help instructors learn her brand of instruction.
Liu grew in a different way: When she was given the opportunity to work with her biggest competitor, she licensed her product lines to it. Now, in the entrepreneurial version of the old adage "if you can't beat 'em, join 'em," she collects revenue on handbags that are manufactured and distributed by her biggest business threat.
48. Choose your opportunities. At Mimoco, one of Blaustein's biggest challenges is choosing the right opportunities for growth. With a bootstrapped company, he doesn't have endless resources to invest in manufacturing new product lines. The company, which creates limited editions of its USB drives, struggles between maintaining its boutique appeal and trying to reach a mass audience on a shoestring budget.
Wallace and company were all set to purchase a new building after being in business for a year, but cold feet saved their business. "We were still not sure where the next check was coming from," he says. "It would have sunk us." Turner advises looking for opportunities that will stretch your business, but not put it in peril.
49. Avoid too-fast growth. Slow growth can be frustrating, but the biggest challenge that Lancry ever had to overcome was growing too fast. Growth outpaced Lancry's ability to source good native-speaking teachers locally, and she didn't want the quality of instruction to suffer. "We learned within the first year that our unique curriculum is only as strong as the teachers who deliver it," she says. So she and her team worked on creating a global recruitment program that reaches out to various countries to find the best instructors aroudn the world.
Too-fast growth is a case-by-case issue, says Cheng. While they generally defer to the management team of the companies in which they invest, when she and her team see one of their companies struggling to manage their growth, they may intervene with assistance and advice, examining every area of the company, looking at cash flow and product development. They'll provide advice and counseling to help the company smooth things out and discover ways to grow in a more strategic manner.
50. Live your dream. Taking on the demands of a startup requires a mind-boggling mix of smarts, flexibility, stamina, endurance, tenacity and humor. But at the end of the day, experts and entrepreneurs all agree on one thing: It's worth it. "We started so we could work at a place that was ideal," says Wallace. "We try to extend that philosophy to all our employees. And we try not to make the office synonymous with pain and suffering. I genuinely����� feel like most people feel privileged to work here, and so do we."
Gwen Moran is co-author of The Complete Idiot's Guide to Business Plans. Reach her at email@example.com.