Promises To Keep
A new year is just around the corner, and with it comes the promise of getting your new business off the ground. To open the door to a prosperous 1999, successful entrepreneurs and business experts offer these 13 start-up resolutions:
1. Craft a thoughtful business plan. Creating a business plan may seem like a daunting task when you're doing it for the first time and champing at the bit to get your business started. But the good news is, there's plenty of help available. And once you start, you'll find it's not as complicated as you thought.
There are plenty of business consultants who'd be happy to help you develop a plan for a fee. But before going the consultant route, speak to your accountant, attorney or banker. Each of these professionals can teach you the rudiments of writing a business plan--and may do it for free or for only a small fee if you deal with them frequently. Additionally, many software programs that take you through each step of the process have appeared on the scene in recent years. Spend some time on the Internet checking out search engines like Snap, Infoseek or Altavista, and you'll find even more information than you need.
Once you've got a plan down on paper, don't treat it as gospel, advises Susan Weiss, 41, who is co-owner with Barbara Lang, 34, of Net Tango Inc., a Louisville, Kentucky-based Web site development company that was launched in 1996. Shortly after starting their company, the partners discovered their actual business was far from a mirror image of their business plan. "If you want to survive and prosper, revise your plan according to changing business conditions and knowledge acquired along the way," Weiss says. "Typically, business plans represent theoretical conditions--all the more reason it's important to adjust to real life market [situations]."
2. Make a total commitment to your business. Your level of success is directly proportional to the commitment you make to your business, say Weiss and Lang. Due to financial constraints, entrepreneurs often have no choice but to start on a part-time basis. The partners urge entrepreneurs to make a full-time commitment to their new businesses. "The more time you can give it, the better your chances of reaching profitability quickly," says Weiss.
3. Jump on opportunities. Luck plays a part in any new business, but timing is also important, according to Net Tango's founders. "The faster you can jump on hot market trends and give them everything you have, the better," says Weiss. (Find out what the hottest businesses and trends for 1999 are in next month's Entrepreneur.)
Timing is part instinct, part intuition and part intelligent market judgment. Weiss and Lang jumped on the Internet when interest in e-commerce was just taking off. "Being an early entrant paid off," says Weiss. "If we were to start out today, I doubt we would be as successful."
4. Assess your skills. Start-up entrepreneurs have to hit the ground running, so your skills must be razor sharp before you start. Before launching your business, ask yourself: Do I know everything I need to know to launch this business? What can I do to get myself up to speed in my weak areas?
"If you lack skills, go out and [get] them," Weiss says. Early on, Weiss and Lang realized it was important to concentrate on their respective strengths: Lang now handles the financial side of the business; Weiss is the marketing strategist.
Once you feel you have all the skills required to execute a successful launch, update your skills every six to 12 months to stay current.
5. Forge a unique identity. From the onset, you must [distinguish] yourself from your competition. Before you open your doors, ask yourself two powerful questions: What makes my company unique? Why would clients choose it over my competition? The answers to these telling questions will help separate you from the pack and help you establish a unique identity.
Once you've clearly identified your uniqueness, go all out to promote it. Then after your business is up and running, constantly sharpen that identity. Don't lose sight of what made you successful or get sidetracked by other ventures, the partners warn.
6. Create a short-term theme to focus your attention. Just as you created a unique identity, make it your business to start off concentrating on a critical theme, such as profitability or marketing and sales, and make that a priority for strengthening your business, advises Mary Sickel, a Lakeville, Minnesota, business consultant and coach. Themes for start-up companies should revolve around a critical function or aspect of running the business during the make-or-break-it first three years of your new venture. "The themes ought to be short, powerful, meaningful and easily remembered," Sickel says. "There shouldn't be any room for interpretation."
7. Make sure your finances are solid. Take careful stock of your finances before you start your business. As anxious as you are to get moving, make sure you've covered all your financial bases and you have enough funds to get you through the launch, plus an emergency fund for unexpected contingencies.
You can't be too prudent about finances, says Richard Worth, 49, who has launched six successful businesses and is now in the early stages of getting his seventh company, Cool Fruits Inc., a Naples, Florida-based natural fruit snack company, off the ground. In the course of running a business, it's easy to lose sight of the numbers, says Worth. "Many entrepreneurs see [financial management] as a boring detail and put it off; [some even] delegate it to others," he explains. But that can backfire when you discover you're not doing as well as you had imagined and you can't pay your bills. Worth advises entrepreneurs to be proactive and monitor their company's finances often, preferably weekly in the beginning. "Reporting must be accurate and timely," he says. "You must compare results against your business plan so you can adjust your projections [accordingly]."
8. Don't believe everything you hear. "There's nothing wrong with asking for advice," Worth explains, "but the smart business owner learns to evaluate that advice to make smart decisions." Don't assume that an outside advisor, accountant or attorney is providing the best advice, Worth cautions. Like a patient getting second and third opinions before agreeing to surgery, get several opinions from informed sources. "The better the quality of the advice," Worth says, "the easier it is to make good decisions."
9. Avoid the quick buck. Worth warns against being seduced by easy formulas that purportedly beef up sales or capture a greater market share. "The easy way is never the best way if the quality of your product or service is compromised," he says. Ultimately, high-quality products and excellent service win out. This ought to be a guiding commandment for the life of your company, says Worth, but it's critical in the start-up years.
There's always a temptation to cut corners when the opportunity presents itself, Worth admits. It could be an opportunity to buy cheaper raw materials or to reduce the price of your product in order to broaden your market reach. "As difficult as it can be, don't allow outside sales and marketing forces to change or cheapen your perception of your product in order to generate easy sales," says Worth. "Avoid bargain routes. Don't trade short-term gains for long-term pains."
10. Don't skimp on essentials. Start-up companies must carefully monitor their expenditures. But by the same token, they can't skimp on the state-of-the-art equipment that's necessary to get their companies off to a solid start. To stay competitive, it's important to have high-quality, even cutting-edge, equipment and supplies, Worth insists.
Make a list of essential equipment needed, and then try to find the best possible prices. You can purchase supplies outright, lease or, better yet, purchase new equipment at a heavy discount through mail order or the Internet.
Whatever you buy, make sure it meets market demands. "Today, change is a given. Technology that's out there today is already obsolete," says Worth. And while you might not need the latest computer, you should be on top of market requirements so you can upgrade when necessary.
11. Recover from mistakes and setbacks quickly. For first-time business owners, mishaps can be devastating. But you have to learn to get over problems and move on, otherwise your business will inevitably be weakened. "Every business owner makes mistakes," says Worth. "The idea is to learn from them so you don't make them again."
Just as important as quickly recovering from mistakes is solving problems and dealing with emergencies before they get out of hand. "The faster you can put out fires and get on with your business," says Worth, "the faster you'll be able to forge ahead."
12. Run lean and mean. Are you sure you'll need an office in the best part of town and a full-time salesperson to sell your products? Why not run your business out of your home or garage, or take an unpretentious office in a low-rent industrial area?
What about employees? If you're fortunate enough to get a great start, resist the temptation to beef up your staff, warns Bob Gemmell, 42, president and CEO of Digital Wireless Corp., a Norcross, Georgia, company that designs and manufacturers wireless data modem products. He urges entrepreneurs to "manage headcount carefully" and apply the brakes when necessary.
"You'll be better off hiring prudently and [stretching] your existing resources," Gemmell says, "rather than adding more people than you actually need."
13. Explore new markets. A decade ago, new companies had no choice but to sell their products or services regionally. Thanks to technology and a global marketplace, the entire world is now your potential market. A well-constructed Web site is the first step to promoting and selling your products throughout the United States and maybe internationally as well. In a global marketplace, Gemmell considers the search for new markets a critical resolution for 1999. "We intend to aggressively market our products internationally," he says. Not only is expansion a priority, but Gemmell has also set definite expansion goals. He urges new entrepreneurs to follow suit.
Bob Weinstein is the author of 10 books and is a frequent contributor to national magazines.
Cool Fruits Inc., fax: (941) 591-4327
Digital Wireless Corp., (770) 564-5540, fax: (770) 564-5541
Net Tango Inc., (502) 412-0412, http://www.nettango.com
Visionary Growth Resources, (612) 898-1775, firstname.lastname@example.org