From the May 2000 issue of Entrepreneur

How often have you said, "I'd like to start my own business, but..." and then rattled off a myriad of reasons why you just can't take that leap? There's no getting around the fact that the path to successful entrepreneurship is exciting, challenging-and littered with roadblocks. So we went looking for roadblock busters, solutions to the obstacles keeping you from starting your own business.

Roadblock: Fear Of Failure

Small businesses fail; what makes you think yours will be different? If you've done your planning, you'll be able to answer that question quickly and with certainty.

A thorough, well-thought-out business plan goes a long way toward building your confidence, says Susan K. Urbach, regional director of the Oklahoma Small Business Development Center in Oklahoma City. When you consider the elements of your operation and how they should function alone and together, you'll be starting on a more solid foundation. Part of this process means taking advantage of the variety of resources available to start-ups, such as the various SBA programs, entrepreneurship programs offered through colleges and universities, and local and state economic development opportunities.

"The most powerful tool for me has been educating myself on how businesses grow, what the life cycle of an entrepreneurial venture is, how to go out and access new types of capital and how to find free resources or people who are willing to work with you for little or no money," says David Gorman, 30, executive director and partner at SwimJim Inc., a children's swimming school and pool management company in New York City. Gorman freely admits he isn't a classic risk-taker. "I'm cautious, and being able to understand how things work has made me feel more capable, more confident that I'll succeed."

Never confuse confidence with blind optimism, though. "You need to be concerned about what you're going to do if [your business] doesn't work, especially if you are your only support," suggests Sara A. Boggs, 51, founder and president of Professional Software Consulting Inc. in Altamonte Springs, Florida. She advises coming up with worst-case scenarios and figuring out how you'll deal with them while you're still in the planning stages. "I knew there were companies I could work for as an employee if my business failed."

You may also be dealing with negative attitudes from friends and family. Consider what might be motivating them. In Boggs' case, her immediate supervisor didn't want her to leave, so he told her he didn't think she could make it on her own. "But when his boss found out what I was planning, he was very encouraging," she recalls.

Others may be giving you input based on their own insecurities. "Always look at who's telling you what," says Urbach. "If the person has been very successful in business, listen to them. But if they live from paycheck to paycheck just doing a job, put their opinion in context."

Roadblock: Loss Of Financial Security

Speaking of paychecks, yours may not be as much as you'd like, but you know it's steady income. Of course, that's just one way of looking at it. Think about this: When you're working for someone else, there's always a chance you'll lose your job and, consequently, your income; being self-employed means your income may fluctuate, but at least you won't get fired. Another point to deliberate is that, as an employee, you'll likely always have a cap on your earnings; as a business owner, however, there's no limit to what you can earn or how big your business can grow. "Don't be shortsighted; look at the long-term potential," Boggs says.

If it's going to take some time for your new venture to begin generating revenue, consider the path that Gorman is taking: Start your business on the side while keeping your current job. He has no plans to leave his corporate position right now. "I'd be leaving a company that's been around for 75 years, where my salary goes up every year and I have a fantastic career in front of me," he says. "Being responsible for your own income is frightening, but it's a great motivator."

Urbach suggests scaling down your lifestyle as much as possible well in advance of your start-up date. "Everybody wastes money," she says. "How much do you really need to live on?" Look for small, simple ways to cut back, such as brownbagging your lunch instead of eating out, or drinking water instead of splurging on soda; these things can add up quickly. Economizing for several months prior to opening your doors for business accomplishes two important things: First, you'll get accustomed to living with less money before you actually have to; and second, you'll be saving the cash you can then use for your business.

Finally, if you're going to make any major personal purchases that might require income verification, such as a home or vehicle, Boggs advises making them well ahead of quitting your job.

Roadblock: Replacing Benefits

Insurance, a retirement plan, paid holidays and paid vacations are the primary benefits you're probably getting now but will have to provide for yourself once you're on your own. And there may be other benefits, depending on how creative and generous your employer is, that you'll have to either replace or do without when you resign from your job.

Begin by determining the benefits you actually need, and which ones are the special bonuses. In nearly all cases, you'll be mainly concerned with life, health and disability insurance. Buying such coverage yourself may seem expensive, but Gorman realized "it's actually quite reasonable" when he weighed the cost against the risk. Be sure the cost of essential benefits is included in your financial forecast.

Boggs points out that if you're earning more by being self-employed than you were as an employee, you can afford to spend more on benefits.

If you've been on the job with your employer for a significant length of time, Urbach suggests taking a look at your plan to see whether you're eligible to continue any of your benefits after you leave the company. Then shop around. Benefit providers that once ignored small companies are now eager to compete for your business.

You'll find providers on the Internet, as well as through agents, trade associations and government-sponsored programs designed to help small businesses. Don't assume that the first price you're quoted is what you'll end up paying, or that you can't negotiate various points of a benefits package. For instance, Gorman was able to arrange a payment plan for some of his insurance policies that matches his company's seasonal cash flow.

You might want to think about purchasing insurance products, such as disability, before you quit your job. A good example is when Boggs knew she would need disability coverage but didn't secure it before she started her company. Afterward, she found the disability option difficult to get because she didn't have any "proven income" to insure. Discuss your plans with your insurance agent, and check the policy to make absolutely certain it'll cover you after you start your company.

Roadblock: Staffing Your New Company

Barely a day passes without the business media harping on the low unemployment rate and how hard it is to find and keep good people. Will you be able to adequately staff your new venture?

The short answer is yes . . . with creativity and diligence. "You need to think outside the box," says Urbach. "The typical employment 'box' is a person who's fully qualified and ready to work 40 hours per week. Instead, you should first define what you really need; then consider alternatives to that traditional full-time person, such as part-timers or outsourcing."

Urbach says good part-timers can be found "on either end of the work spectrum-those who are young and going to school, or those who are more mature and still have a great deal to offer but don't want to work full time." Another potential group of employees: mothers who want challenging jobs but need flexible hours so they're only working when their children are in school.

If you do need that full-time, highly experienced individual, offer him or her a stake in your company as an incentive to work for you. (Think of all the Home Depot employees who've become millionaires through their employee stock purchase plan!) There are a number of ways to approach this, and you may want to protect yourself with a buy-sell agreement should the employee leave the company. "Don't do this on your own with a self-help book," says Urbach. "Spend the money to have an attorney advise you."

Get creative when you're looking for people. Don't just place an ad in the daily newspaper; find other ways to reach prospective employees, such as networking, advertising on the Web or using your state's job-placement service and school-placement offices. Vocational schools aren't merely a source for employees; they may also be able to customize training programs for you.

And don't overlook people who are already working. Even if you can't offer them more money, you may be able to entice them in other ways. "So many people like their salary but hate their job situation," says Urbach. "It's worth money to people to have a good place to work."

Gorman's young company can't afford to pay competitive wages; instead, he offers workers more autonomy in their jobs. He also gives certain employees additional responsibilities and corresponding authority, which makes their work more satisfying. And he makes it clear that employees who hang in there through the early days will have plenty of opportunities for advancement as the company grows-and it certainly will, because Gorman isn't about to let any roadblocks stop him.

An Alternative: Buying an Existing Business

Starting a Step Ahead

If you're not up to the task of tackling roadblocks head-on, consider going around them by buying an existing business instead of starting a new one. Of course, you probably won't find the exact business you would have started, but you'll be able to make changes to the company you buy once you've taken it over. And buying a business instead of starting one means you'll have an operation that's already staffed; an existing customer base and, therefore, cash flow; a proven track record; a relationship with insurance companies and other benefit providers; and established deals with suppliers.

Businesses go up for sale for a variety of reasons. Sometimes they're not doing well and the owner wants out. But in many cases, the companies are profitable and up for sale because the owner wants to retire or has passed away, or the entrepreneur simply wants to start something new.

A key drawback to buying an existing business is that it typically takes more cash than starting from scratch. Also, when you buy a company's assets, you may get stuck with at least some of its liabilities. But you'll have the opportunity to study the operation, negotiate the terms of the deal and avoid a wide range of start-up challenges on your path to business ownership.

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