Still Learning

If nothing else, the past year and a half of being my own boss have been quite the learning experience. And the learning never stops.

The key question is, would I recommend self-employment to others? And what are the most important things to understand about starting a business?

First, the recommendation part. If you want to start your own business for the following reasons, forget it right now!

• Not being "tied down" to a 9-5 job. Sorry, but if you start a business you'll be tied down for 12-15 hours a day. Forget about it if you think your life will be easier just because you are self-employed.
• My chance to do what I "love" full-time. Strike two. Yes, you might get to do what you love for part of each day, but you also have to be an accountant, salesperson, marketing manager, janitor, office manager, etc., whether you like it or not.
• Getting rich quick. Did you know most businesses fail? And that by fail, it means financially bankrupt? Going into business may have a long-range potential for wealth, but almost nobody gets there quickly, but it takes years of hard work, dedication, and resilience.

If you aren't afraid of working hard for long hours, failing over and over again, competing, learning, and living on practically nothing for a couple of years, maybe, if you are lucky, you can succeed in your own business.

Even if you think you meet all of those qualities listed above, there's still the critical decision of what business you want to open. There are lots of businesses that seem successful on the outside, but are barely scraping by because competition kills their profit margins. There are other businesses that seemed like a good idea, but when they built it, nobody came.

But mostly, there are many failed businesses that just didn't have enough up-front capital to allow them to survive until enough customers find them and make them profitable.

I was reading about franchising awhile back, and read a story about Subway restaurants. That's about the most affordable of all the fast-food franchises, so there have been lots of budding entrepreneurs opening a Subway. The majority of Subway stores do generate some level of profit - sounds good, doesn't it?

But the story I was reading revealed the problem. One Subway store with an owner-manager quite often barely clears enough profit to provide a minimal living to that owner-manager. Where the Subway franchisees begin to make a decent profit is through owning several stores, with volume the key to success. But the trap is that a single owner who sank his life savings into that single Subway store gets stuck working long hours in the store for low rewards, and can't afford to do the expansion needed for true success. So he ends up selling the store, usually for less than he has invested, to one of the multi-store franchisees.

Before going into business, you have to have a plan. A written plan that outlines what kind of business you are opening, what makes it unique and therefore attractive to your target market, how it will be financed, how it will be advertised and marketed, and how you will survive during that first year or two when the business is struggling to get itself established.

The holy grail of business is finding that fresh, new, unique concept that nobody else has tried, and opening to find it is wildly popular among the target customer base. Most people can't find it, so the next best thing is to find a need in your community that either is poorly met or not met at all by local businesses, find enough capital to make it successful, and pour everything you have into making it work.

There's so much more I could write, but I've already written so much I risk reader boredom. Besides, I've got work to do.