At a Loss?
Apply now to be an Entrepreneur 360™ company. Let us tell the world your success story. Get Started »
All the newspapers scream that another company has laid off thousands of workers. You never thought it could happen, but suddenly, there you are-one of those thousands.
Your first impulse: panic. What will happen now? To your family, your future? Maybe you're angry, or even relieved. Whatever your reaction, it's perfectly natural to be unsettled. We like to believe we have control over our lives, and when that control is taken away, we're uncertain and insecure. But if you've ever dreamed of running your own business, now is the time to take control and do it. Here are four steps to prime you for a business of your own:
1. Turn Rejection Into Motivation.
Did your former employers appreciate your talents and work ethic? Probably not. Don't stew in anger or self-pity. Show them what you're made of.
Once, in an important meeting, I announced I'd sell 100,000 books in one year. Someone let out a short, high-pitched laugh. That laugh echoed in my mind every time I picked up the phone. The larger the company I was trying to sell to, the louder the laugh would resonate, and the harder I'd try to make the sale. I sold 100,000 books in eight months.
Read our RoadBlock Busters article to determine what's stopping you from starting a business and what you can do about it.
2. Embrace Change.
The secret of change is to focus on the new path, not on the comfort of a worn trail. The new path is often where you'll find the most fertile ground. Of course, you can expect to encounter adversity, but, as the Roman philosopher Seneca said, "Adversity introduces a man to himself." Instead of thinking about all you've lost, focus on the possibilities ahead.
3. Design Your Life.
Success is the ability to design the life you want to live. Now's your chance to do something you're passionate about. What do you care about more than anything else? What would make you look forward to going to work each day? A passionate love of your product or service will drive you on your new path.
4. Develop a Strategy.
Having a clear purpose, setting realistic goals and thinking strategically can help you get past even the greatest adversity in the battle for success.
Author Caroline Schroeder once said, "Some people change their ways when they see the light; others when they feel the heat." In the heat of a layoff, you can die or live. The only way to live is to make a change. Why not make it the start of your own business?
A perfect business is whatever's perfect for you.
So you'd like to start your own business, but you're not sure what kind of business to start. How do you get an idea? Begin by assessing yourself.
Get out a piece of paper and list five to seven things you enjoy doing and are good at-anything from "I'm good at computer spreadsheets" to "I love kids." Then list five to seven things you dislike doing or aren't good at. Next, ask yourself, "If there were three to five products or services that would make my personal life better, what would they be?" Ask the same question about your work life. Then consider what you liked and disliked about your former job. Finally, ask yourself what you expect to gain by starting a business. (Are you looking for lots of money? Freedom to set your hours? A chance to express your creativity?)
When you're done, look at your notes and try to find a pattern. Is there a need for a business doing one of the things you like or are good at?
You need to look outside as well as inside to come up with a good idea. Books, magazines, newspapers and Web sites are excellent sources of ideas. In addition to business magazines, look at other types of publications for trends that could suggest good business ideas.
Need more ideas? Our Start-Up Kits offer market overviews of some of today's hottest businesses.
Get opinions from other people. Ask your friends and neighbors what products or services would make their lives easier. Think about your neighborhood and the neighborhoods where your friends and family live and work. Chances are, you'll find a need for a product or service you could provide. For example, one office worker noticed there were very few restaurants near his office park, so it was hard for employees to find food on their lunch hours. He started a company delivering restaurant food to offices in the area.
When you've got what you think is a great idea, carefully assess its potential in your city. Note what kinds of businesses already exist in your area and what kinds of people live there. You may have a fantastic idea for an upscale catering business, for example, but if most residents in your city are retired people on a budget, you won't find many customers.
As you ponder your business idea, keep in mind that you don't have to reinvent the wheel. Starting a successful business is a matter not of coming up with something completely new, but of asking, "How can I do something better?" or "How can I do it differently than the other person?" By assessing your abilities and your market, you'll be able to answer that question profitably.
"Look Inside" is adapted from Start Your Own Business: The Only Start-Up Book You'll Ever Need (Entrepreneur Press) by Rieva Lesonsky and the staff of Entrepreneur magazine.
10 Steps to Start-Up
Bringing your idea to life
Now that you know the kind of business that'll suit you, your mind's probably racing in a hundred different directions. Focus: Here's a step-by-step plan of action.
Step 1: Find Your Audience.
Narrow your focus by asking yourself who your clients are. How old are they? Are they male or female? Where do they live, shop and play? What do they like, and what do they value?
Step 2: Make a Name for Yourself.
Consider your target customers when choosing a name for the business. If your audience's priority is looking cool, a stodgy name won't do.
Once you've found some names you like, test them. A name that's difficult to pronounce may rob you of word-of-mouth referrals. Likewise, a hard-to-spell name will defeat efforts to find your business in the phone book. Also investigate the availability of trademarks and Web site domains for whatever name you choose.
Step 3: Choose a Structure.
Your business structure affects your taxes, how you raise money, even how much paperwork you need to do. The types of business structures are:
- Sole proprietorships, which have one owner.
- Partnerships, which have two or more owners.
- Corporations, which provide liability and debt protection for owners.
- Limited liability companies, which combine aspects of corporations and partnerships.
To help you pick a structure, speak to an attorney who's knowledgeable about your industry. Also, ask other entrepreneurs for their advice.
Step 4: Plan Ahead.
A business plan helps you solidify your thoughts about your business. You also need a business plan when applying for loans or other financing. Your plan should contain seven sections: Executive Summary, Business Description, Marketing Strategies, Competitive Analysis, Design and Development Plan, Operations and Management Plan, and Financial Factors.
Step 5: Get Permission.
Starting a business involves obtaining myriad licenses and permits. Some take longer than others to get, so don't procrastinate. And although the paperwork may seem tough now, it's easier to get licenses before you open your doors than later, when you may face substantial fines or penalties.
Depending on your industry and business structure, you may need some or all of the following: fictitious business name, city or county business license, health department permit, liquor license, fire department permit or sign permit.
Step 6: Get Money.
Look close to home when you first search for business financing. Savings, mortgage or retirement accounts may be prime sources. Perhaps friends or family can help. Just make sure you aren't putting too much at risk.
If your business will realize a high rate of return, also consider venture capital investments, angel financing and loan guarantees from the SBA.
Step 7: Keep the Books.
An accountant or a software program can help you track expenses, accounts payable and receivable, inventory, payroll and taxes. You'll also need to create cash-flow statements and balance sheets for use with your business plan.
Step 8: Set Up Shop.
Find a business location convenient to your clients. Study traffic patterns and neighborhoods before signing a lease. Or consider starting off your business at home to save money.
In addition to furnishings and a computer, your business needs stationery. Consider hiring a designer to create a logo for your business cards and letterhead. Your Web site should match or complement those designs.
Step 9: Hire.
Most businesses eventually need employees. Begin by writing a job description, then use it to compose a help wanted ad.
Have job seekers fill out applications to help you compare their qualifications. Check their references. Plan interview questions in advance, and take notes on the answers.
Instead of hiring full-time employees, look into college student interns or temps for short-term projects.
Set employee policies from the start, for legal reasons. Written policies are best. Consider attendance, discipline, dress code, payment and overtime.
Step 10: Make Yourself Known.
Determine the best ways to reach customers-cable TV, radio, magazine and newspaper ads; fliers; word-of-mouth; direct mail; or public relations. Once you've pooled your ideas, write a marketing plan to help you evaluate which strategies work.
STRAIGHT TO THE SOURCE
You don't have to pound the pavement to get entrepreneurial help. This should do nicely.
- SBA, (800) U-ASK-SBA
- SCORE (Service Corps of Retired Executives), (800) 634-0245
- Association of Small Business Development Centers (SBDCs), (703) 764-9850
- Minority Business Development Agency, (202) 482-5061
- National Business Incubation Association, (614) 593-4331
- Need money? Go to www.microenterpriseworks.org for a list of organizations that provide microloans.
"10 Steps to Start-Up" is adapted from Start Your Own Business: The Only Start-Up Book You'll Ever Need (Entrepreneur Press) by Rieva Lesonsky and the staff of Entrepreneur magazine.
A Call For Backup
Need a business with support? Try a franchise on for size.
If the thought of starting your business from scratch seems overwhelming, buying a franchise can be an excellent alternative. A common saying about franchising is that it puts you in business "for yourself, but not by yourself." So what does that mean? As a franchisee, you pay an initial fee and ongoing royalties to a franchisor. In return, you receive the right to use the company's trademark, initial training and ongoing support, and the franchise's system of doing business.
A growing number of former corporate employees are choosing the franchise option to ease the transition to entrepreneurship. If in your prior job you were used to delegating tasks, doing everything yourself as an entrepreneur can be jarring. Buying a franchise can offer the support you need to make the switch.
How do you choose the right franchise? Start by investigating industries that interest you, then analyze your geographic area to see whether there's a market for that type of business. Contact all the franchise companies in those industries and ask them for information. (For details on nearly 1,000 franchisors, check out Franchise Zone.)
Don't rely solely on a company's promotional materials, however. Read magazines, newspapers and articles on the Internet about the company. Does it seem to be well-run and well-respected? Check with the Better Business Bureau and consumer or franchise regulators in your state to see whether there are complaints against the company. (Visit the Federal Trade Commission's Web site for information about investigating a franchise.)
Still interested? Contact the company and ask for a copy of its Uniform Franchise Offering Circular. Among other things, this document contains an extensive description of the company, its programs and costs, any litigation against it, and contractual obligations for you and the franchisor. You, your attorney and your accountant should all review the UFOC thoroughly.
An important part of the UFOC is its listing of current and former franchisees, including contact information. Contact several-in both categories-and interview them about what it's like to be part of this franchise system. Was the franchisor's training program helpful? Have there been any unexpected problems? What's a typical day like? Are profits as expected? Volunteer to work at a franchisee's location to see what it's really like.
When the research is done, your choice often comes down to gut instinct. That's why chatting with franchisees and getting a feel for the business are so important.
"A Call For Backup" is adapted from Start Your Own Business: The Only Start-Up Book You'll Ever Need (Entrepreneur Press) by Rieva Lesonsky and the staff of Entrepreneur magazine.