A Critical Mistake 99% of New Home-Based Business Owners Make Before They Sign Up

There are many reasons why people either succeed or fail with a home-based business opportunity. However, there is one critical mistake that most people make before they sign up that will have a major impact on success or failure.

If you are involved in a home-based business you have experienced the recruitment process. You are invited to check out a home business through one of many ways including a hotel or home meeting, business presentation CD, phone presentation, or a one-on-one presentation.

The presentation, generally, is about the business and what it does to make life better for everyone using their products or services. A good presenter will show you how the business makes sense and the exciting opportunity that lies before you. By the time the presentation is over the opportunity sounds so good you can’t understand why anyone wouldn’t join and become a millionaire.

Hopefully, you have done your due diligence. You have checked out the company and its products to make sure they are what they say they are. You have experienced the products and services, believe in them and feel in time that you could develop a passion for them. And, finally, you feel confident you can go out and build a business with this company.

But wait! There’s something that is missing and it is the one critical step that must take place to make sure you have the best chance for success. You have to find out how qualified your potential sponsor is in leading, training and coaching you. How they answer your questions should be key to whether you join their team or not.

Here are critical questions you should ask:

· What kind of business building experience and training do you have?
· Tell me about the team you have built and how you did it
· Specifically, how do you build your business?
· What you do to teach your new business partners to do to ensure their success?
· How much time do you traditionally spend teaching and mentoring your new partners?
· Can I call and talk to several of your business partners to get a feel for your organization and how your work with them?
· How easy are you to contact? Will you be available when I need you?
· IMPORTANT: If your potential sponsor is new to the business, you need to ask these questions to his sponsor before signing up

Most people hardly ever ask these questions. They end up signing with inexperienced and non-mentoring business partners. The result, in most cases, is frustration and failure.

Having a sponsor with strong leadership and training experience mentor you through your first years in a home-based business is critical. Here’s why:

· Most people signing up for the home-based business opportunity have little or no business building experience
· Starting a business is tough work and a strong leader needs to be there to mentor the new business partner through the highs and lows
· You will need to develop a new set of skills: presentation, closing, training, mentoring, etc. including a proven step-by-step business building process or system
· To avoid many of the pitfalls many inexperienced associates fall into
· Help develop the right mindset to succeed

Unfortunately, most prospects are told this is an easy business to build. Anyone can do it! So, the new business partner comes in with false expectations. Only to learn, the hard way, that success comes with the price of hard work, education and commitment. For most, starting a home-based business is a huge challenge.

A sponsor must be honest. A recruit has to understand the benefits of being involved in the business, but counseled that there is much to learn and a long-term commitment to the business is required for success. The sponsor may ask for a one-year commitment with a minimum number of hours a week to work the business before signup takes place. The prospect needs to understand this is a serious business and to make serious money will require constant plugging in and participating over several years.

New partners may never have been involved in sales or recruitment, so, this is foreign territory. The sponsor must have the knowledge and experience to teach the basics and get the new business partner off to a solid beginning teaching a success system that is in place and being used by other business partners.

A leader will work directly with his new recruit to understand the business inside and out. He will teach solid fundamentals that will be the foundation the new partner will fall back to for the rest of his career. And, in turn, teach this system to his recruits, too.

Signing up with a proven experienced leader is a critical part of building a successful business. He will be your mentor, coach and trainer for you through thick and thin and lead you to success.

So, the next time you investigate a home-based business opportunity ask the critical questions that 99% of potential business partners never ask about leadership and training. It could make the difference between success and failure.

Browsing For Business – How to Run a Business With Web-Based Software

I stayed plenty busy on Saturday, December 19, 2009. Not only was I shuttling my five-year-old around town to his Christmas pageant rehearsal and his birthday party, I also wrote several blog posts and articles (including this one), reviewed my current bank account information, entered receipts into my checkbook register and my budget software, updated my business plan, created a survey form, and responded to about 10 e-mails. I never opened a single application besides my Firefox browser. I accessed all of my software through the Internet. My first all-day experience with web-based computing, also called “cloud” computing was a great success!

Web-based computing simply means that instead of using software programs downloaded to your hard drive, you open your software applications through the Internet. You open your web browser, access the software’s location on the Internet, open the program, and start using your program. Like many computer users over the last 25 years, Microsoft defined my software user experience. If I needed to update a spreadsheet, I opened Microsoft Excel. I created my word processing documents in Word, and I would open Outlook to check my e-mail or calendar. I only used the Internet to look at news sites, shop online, or check my social profiles at LinkedIn or Facebook. Over the last several months, I have completely shifted my focus to use Microsoft products as little as I possibly can. I should have seen this advancement coming. We have watched much of our commerce move inside a web browser. Whether we have purchased books from Amazon.com or downloaded software directly from a website, we entrust an increasing amount of our commerce to web-based activity. Using web-based software for all computing is a very logical next step.

I am by no means anti-Microsoft. For many high-powered spreadsheet activities like I use at work, nothing works better than an Excel spreadsheet. I also need to use Excel in many cases, because Excel’s add-on programs allow greater data analysis and productivity. However, many people are not like me and do not work with 30 megabyte spreadsheets every day. Many people need little more than the basic features of the traditional Microsoft Office package. For these purposes, web-based software like Google Docs is more than enough to fulfill users’ needs.

Major software companies are quickly catching on. Google’s web-based application program is arguably the most popular web-based software, but other companies like Adobe (check out Adobe Buzzword) offer competing products. Even Microsoft is creating a web-based version of its Office software, which is a clear admission that computing is more about the Internet and less about shipping software CDs. Other companies, such as 37 Signals, offer a number of software solutions to handle a wide range of business problems.

In the last two months, I have learned that you can do the following business activities using web-based software.

  • Maintain your accounting books
  • Prepare business plan information
  • Share documents in a common team location
  • Prepare presentation graphics
  • Maintain your Customer Relationship Management (CRM) software
  • Pay your bills by scanning invoices

Here are five reasons why web-based software is quickly becoming a key part of business computing.

  • Mobile computing – When we look back at this period, Apple will be best known for creating a truly mobile computing environment. While BlackBerries were important as communication tools, the iPhone made a leap of several levels to a true handheld computer. Since smartphones have limited memory, any usable software needs to be based on a web-based platform.
  • Increased collaboration – the rise of the free agent workforce, the never-ending expansion of global commerce, and increasing numbers of virtual teams are creating demand for easier collaboration. In the past, we would have to e-mail documents or upload documents to the Internet using complicated procedures. We would never know if the version we were editing was the “live” or the “official” copy. Web-based software allows people around the world to access the same document at the same time. Editing and collaboration is becoming much simpler and more productive for a connected workforce.
  • Data security – Your first response may be, “How can using a web-based program be safer than accessing my hard drive?” What would happen if a technology company like Intuit (QuickBooks’ parent) or 37 Signals lost a significant customer data? The answer is the equivalent of Enron. These companies would collapse because the market would lose trust in their ability to secure confidential data. These companies maintain security levels far above what we can maintain on our home computers or small business networks.
  • Mac vs. PC switching – Darren Root, executive editor of the CPA Technology Advisor magazine, wrote a September 2009 blog post about how he lives a “double life” using Macs at home and PCs in his office. If your only need a web browser to access your programs, then the physical computer may not be as important in the future. You may not need an expensive computer if you only need to access a browser. The sudden popularity of netbook computers is somewhat related to the increased popularity of web-based software. If you can access your business software through the web, then a $300 netbook could support your business as well as a laptop that is two or three times as expensive.
  • Less need for IT support – Instead of hiring a full-time IT support staff for your unique hardware and software needs, you can rely on the software providers to monitor upgrades, solicit user feedback, and handle any software issues. Your reduced need for support personnel gives you more resources to improve your business.

So what software did I use on December 19? I used a variety of software that substitutes for much of the software we have downloaded to our computers for many years.

  • Gmail – E-mail, calendar, task, and contacts (free), which replaced Microsoft Outlook.
  • Google Apps – Anything MS Office can do (also called Google Docs, free).
  • PlanHQ – Business planning software. The version I use costs $9/month, but larger business will spend closer to $30/month. Palo Alto Software, the maker of Business Plan Pro, told me last week that they are planning web-based introductions of their very popular Business Plan Pro software. I use Business Plan Pro for my clients’ formal business plans, but I maintain my own business plan on PlanHQ.
  • Highrise – 37 Signals product for customer relationship management (about $30/month). o QuickBooks Online – Online version of the accounting software leader ($9.95/month).
  • Dave Ramsey’s My Total Money Makeover personal finance site – For about $6/month, my wife and I use Dave Ramsey’s on-line personal budgeting software instead of a program like Quicken or an Excel spreadsheet.

I pay approximately $25 per month for my firm’s information technology costs. Not only can I save the cost of a full-time IT support person, but I also access my work from my laptop, netbook, smartphone, or a computer halfway around the world and have the exact same data and format in front of me. I am convinced that we will only see increased activity in this type of technology to reduce costs and increase flexibility. As demands for employee flexibility and employer mobility become more prevalent, operating our businesses inside of a browser will become more natural and more necessary.

Flexibility and value are key success factors in today’s business environment By utilizing web-based software to run your business, you are able to run your business from any location and on any computer. Instead of working in the technology maze of traditional business, you will have more time and resources to work on your business and achieve your goals.

How to Become Successful in Any Network Marketing, MLM Business

THE SECRET TO NETWORK MARKETING SUCCESS

If you are like most people that are involved in the increasing popular network marketing or MLM, then you probably experience some sort of frustration or are on the verge of quitting. But the good news is that it is perfectly OK. Believe it or not, everyone from the top producer poster boy of your company to someone in the lowest level has experienced that. So you are not alone. Maybe you have gone to the trainings over and over, read the industry related books, and listened to the personal development CDs, and with no avail, are not making any progress at all. Well those things are great and very critical for your success, but there are some ingredients that are most likely never mentioned or brought up to your attention before getting started. Before I continue to share my top 4 recipes, I wanted to tell you what network marketing is and what it isn’t.

Network marketing is not: sales (as the core), convincing or begging people about the business, or managing people, a get rich quick program, a business you can do with little time, a business you can be successful at by just by sitting down at home making phone calls or getting online, not a job with a have-to mentality.

Network marketing is: a people business, earning while learning, positioning your self to be a leader to attract and create other leaders, a personal development course with a compensation plan, eagerness to learn, a filtering business, a business that requires time and effort which is proportionate to your progress, a business that requires you to THINK and ACT as a business person with their responsibilities, a business that demands responsibility, time management, and a high level of self motivation and commitment. Now with that mention, here are the fabulous, FIVE ingredients for your MLM Success that are a MUST!

First and foremost, before you continue to do anything else at all, you have to have your “why” down. What is your “why?” It’s basically your reason for doing the business, your vision, or your overall goal(s). Without a goal, it’s like basketball players running around the court with nowhere to shoot at all. If there are no goals, then you can’t score, and most importantly, you can’t win. So write 3 of them down, whether it’s to retire your family, pay off bills, spend more time with your kids, or travel the world. Write them down and place them in a high visibility place where you are mostly going to be at such as the visor of your car, your refrigerator, taped to your bathroom mirror, etc. This will be your testimonial reminder! You must be convicted with your vision!! So once you have your “why” down you must have a “by when” meaning the time frame. Your vision has to be aligned with a realistic time line that you set for your self and the level of work you are committed to. Earning a million dollars in 5 months in the business is almost impossible and probably not feasible so come up with something that measures up to what you are committed to.

Second, know the business inside and out because with wisdom comes confidence. Don’t get into in too much dept with the technicality part because you are not a technician or salesman. Know at least the top 20 questions of your business by heart as well as the compensation plan, and how to give an effective presentation plan. A good acronym to help is A-B-C (Advantages, Benefits, Compensation ). Never lie or exaggerate about the business! The last thing you want to do is lose a potential prospect by not knowing the basic information or them finding out that you lied to them, as well as giving a false expectation. A prospect will never want to do business if you are uncertain and not confident about the business. One of the most important issues here is to go over how this business could benefit them and their quality of their life, and what they could earn with the amount of work and commitment they are willing to give, so understand the comp plan and tailor it into their need and wants. If you don’t have the technical information in hand, tell them you will get it and follow up with them. Besides industry related material you must learn from the philosophy of your successful upline and personal development and leadership related materials. If you didn’t like reading before, then you must get in that habit! The more your business grows, the more you grow; the more you grow, the more your business grows.

Third, have an effective and an easy-to-duplicate system in handy. SYSTEM stands for Save Yourself Time Energy Money. Have a system in place that is proven to work and that is easy to remember for the most common scenarios such as 3 way calling with your sponsor, what to say before and after the presentation, what to say over the phone to gather customers, how to close, and what to say to the following business prospects that are family, friends, associates, leads, and strangers you just met, how to present to someone that lives a distance away. If you master those scenarios you are certainly on your way to success! Scripts are very effective as well so ask your organization and sponsor to obtain them. Keep in mind it must be duplicable.

Fourth, understand psychology! If you haven’t notice yet, this business is not about the products. If it was, you would be a salesman and selling is the antithesis for this type of business. Every top producer understands the core of this business which is people. This is what will set you apart from the rest of the people in your industry. It’s a people business and when it comes to people, you’re dealing with a lot of psychology and relationships! What I mean is being able to understand the nature of people. If you are not a people person then you are going to struggle in this people. You need to be able to meet people’s needs and wants. Bottom line! The only way to do that is to connect with people by listening to them. (That’s why we have 2 ears and 1 mouth so we should listen twice as much) Some prospects will have an objective but the underlying messages in all of them are 2 things: Can I do this? Can I count on someone to help me do this? With that said, you need to position yourself to be a leader! (Notice how all top producers are leaders? Not a coincidence) and people need to be able to know, like, and trust you! Once you have that, you have their business!

The first 3 I mentioned is very essential to your success but doesn’t guarantee your success. It will only increase your effectiveness of closing on prospects. The fifth and last thing I want to mention is the LAW OF NUMBERS. You will eventually hit a point where your list of 100 warm prospects is completely exhausted! So what’s next? The LAW OF NUMBERS simply states that the higher you increase your volume of people you present the business to, the faster you will build your organization. If you don’t think you are building your business the way you want, reevaluate the amount of people you are talking to about the business. You can’t be successful when you are only mentioning the business to 2 people a week! Don’t wait for people to come to you go out and find them. Attend local business mixers or networking events in the area, get involved with an activity group, events, go to the mall, the dogpark, or restaurants, where many people are present. It’s simply a number’s game. You can’t grow your business if people don’t know what your business is all about. Find out information on viral marketing, purchasing leads, create flyers, sizzle cards, leave information in restaurants, do newspapers ads and magazine ads. A rule of thumb to live by is that you will gain a 1% of people you expose as a business partner. Out of that 1%, 1% of them will be your hard charging ace in the business. Most network marketing business requires at least 3 successful legs. Here is a mathematical example to earn that:

1000 exposed = 10 will sign up = 1 will be a serious leader and blow your organization up.

Repeat this 3 times and you are almost guaranteed to be on your way to the top!

With 3000 people, that’s a little bit over 8 people a day!!

Now remember, the whole point of this is to find 3 quality leaders in your business. Many will do the business or even drop out but they aren’t necessarily quality kinds of people. You are not here to manage or babysit your organization because will be quite a drain on you. You should spend 85% of your business recruiting or as I say, spend 1 minute on a hundred people than 100 minutes on 1 person! Network Marketing is simply a filtering business not a convincing business!

As a bonus, I just wanted to bring up some additional statistical information that will certainly help and is worth knowing. Use stats in your favor:

90% of business partners will drop out within their first 90 days so it’s very important to get them qualified and get their list of top MVPs with 30 minutes of being in the business! Some say within 48 hours but think about it: when you start or open any business you want to start making money ASAP, not in a couple of days. If they do decide to drop out, you at least have their top 10 in your hands!!80% of your business is due to the combined effort of 20% of your business partners. No does not necessarily mean No. It means it may not be their time. Over 50% of people will sign up during their 5TH exposure. Anything after that, it’s usually best to not bring it up again. I certainly hope this information will open up new levels of thinking and transformation to bring you success!! May you prosper in your business and achieve the life you and your family deserve!

Why Are You Waiting to Start Your Business?

For most first-time entrepreneurs, there is a considerable lag of time between thinking about starting a business and actually taking the first steps toward turning a business idea into reality. This time is usually spent rationalizing inaction — that is, thinking about all the reasons that now is not the ideal time for a startup. For the most part, these justifications fall into one or more categories:

  • Lack of Time
  • Lack of Money
  • Lack of Product or Service Idea
  • Concerns About Security
  • Concerns About Personality, Knowledge and Skills
  • Not Knowing Where to Start

 While these are all valid concerns, none are factors beyond your own control. As one management expert once said, an entrepreneur “…doesn’t see risks; he sees only factors he can control to his advantage.” Each and every excuse you can think of to resist taking the plunge into entrepreneurship is just that — an excuse. If you are serious about working for yourself and building your idea into a successful company, there is a way to start on that road immediately. Working obstacles into opportunities is a basic skill of successful entrepreneurs, and now is a good time to start honing those habits.

Time

Lack of time is a common reason for delaying the startup of a business idea. For some, there just isn’t any time today to work on the business idea. For others, the thought of taking months, or even a year, to start a business seems overwhelming and too far off. Instead, many potential entrepreneurs put off planning their business idea until they will have enough time. The problem is that life has a funny way of never leaving us with enough time to do everything we need to do! The trick to getting started with your business idea now is to organize your time effectively.

Many potential entrepreneurs have a great business idea or two but can’t find the time to develop these ideas into an actual business. This is particularly true for those who work full-time for someone else and have significant personal and family obligations. The reality is that with a little effective time management and commitment you can find at least a few hours per week to work on your startup. Many of you are thinking, “Sure, I could find a few hours a week, but it would take a year to get my business off the ground at that rate!”

So what???

The year will pass whether you work on your business idea or not, but by scheduling just 3 hours per week, you will have put in nearly ONE FULL MONTH of work hours by the end of that year! For most business ideas, a full month of work is enough time to complete just about everything that needs to be done to launch!

The trick to getting started on your business idea with limited time available is to organize your time and responsibilities effectively. Use a daily planner to schedule all of your current commitments, along with time dedicated to your startup. Plan for which part of your startup you will work on during each work session, including clear objectives. That is, identify the specific tasks you will accomplish during each startup session and hold yourself accountable for getting those tasks completed on schedule.

Try using a 90-day planning strategy for managing long-term goals. For most people, it is difficult to accurately predict how much can be accomplished within a full year from today. It is far easier to estimate what can realistically be accomplished within a 90-day window. If you can spare 3 hours per week to work on your business, a 90-day plan would include the work you think you could accomplish in one full workweek (3 hours x 12.5 weeks = 37.5 hours).

Just remember, time will go by whether or not you move forward with your business idea. Don’t wait any longer for your independence — get started today!

Money

Lack of money is, by far, the most common argument for not starting a business. Obviously, business ideas vary in the amount of capital required to successfully launch, but most can be modified and bootstrapped into manageable startup costs. Most first-time entrepreneurs develop an “order of magnitude” estimate of how much they think they need to start their business, based on nothing more than general ideas of what the big things should cost. Without detailed research and planning of your business idea, there is no way to gauge whether the cost of startup is too much. In addition, it is far easier to raise the capital you do need once you have thoroughly planned all aspects of your idea. A well-thought out idea and accurate financial projections will convince potential family and friend investors, and perhaps the SBA, that you are serious about succeeding.

Even if you work through your idea and find that you are unable to finance the full startup, you will find it much easier to modify and bootstrap your idea into smaller, less costly niches that you can ultimately grow into the company you imagine. You can start out part-time, barter with other small business owners for needed goods and services, or pick up side consulting gigs to increase income during the early stages. The internet provides significant opportunities for free marketing — it takes a little more time and effort than paid advertising, but can be extremely effective over the long run in building your brand and customer base. Once you know where you need to spend money to get your business off the ground, it is far easier to find the places to bootstrap.

Of the companies included in the 2008 Inc. 5000, 87% were funded, at least in part, by the owners themselves. The median amount of capital spent to launch these companies was $25,000 — that means half of those 5000 successful companies were started with less than 25K. A bootstrapped startup of $5,000 or less is very common, and most people can raise 5K with a little motivation. Cut your spending, sell some stuff on eBay, do some side jobs, whatever it takes, there is always a way to get started without a major outside investment. By starting your business with an eye toward conserving cash, you will develop a culture of financial responsibility that will ensure your business’s long-term growth and success.

Friends and family are the second most popular source of funding for startups (after self-funding). In order to protect and separate the business and personal relationship, it is important to follow basic business principles in making deals with those close to you. Negotiate all the terms, set a clear repayment schedule, and memorialize your agreement in writing. There are companies available who will service your family and friends loans, for a fee, which can be a great option if you and your lender would prefer an intermediary to handle any potential problems or disputes regarding the investment.

Another new avenue to raising capital for your startup is through social lending websites. These sites allow you to post your request for loans along with a description of the purpose and the interest rate you are willing to pay. Interested users pledge their own funds toward your loan in increments from $50 to your full requested amount. You repay these lenders through the website. This can be a great option if you have limited access to your own capital. Peer-to-peer lending is gaining in popularity, which also means there are some kinks to work out. Be sure to check into any lending site you consider before you commit.

Bank loans are very difficult to secure for startups. Generally, the only way to use the bank’s cash for startup is to personally guarantee the loan, usually with collateral. The SBA offers a number of excellent startup financing programs which require a full formal business plan and good personal credit. Of course, these loans take a significant amount of time and effort to secure, so if your startup expenses are relatively low, you may be better off scraping together your own cash and looking to friends and family for the rest.

Angel investors and venture capitalists are often touted as the ideal route to funding a startup. The reality is that very few companies are funded at startup through either Angels or VCs, the competition is very stiff, and you must be willing to give up significant control and ownership, in most cases. Generally, both Angels and VCs are looking for quick and enormous returns on their investments and are far more inclined to be second round investors — on board after the R&D and grunt work is complete, and all that is needed is cash to send the company to the stars. The process for most VCs is long and tedious, and very few of those seeking capital actually get funded. If you are selected, you will give up most of your ownership stake in your business and be expected to heed the advice of the professionals that come with the money. However, if your idea is one that fits the VC profile, destined for overwhelming success, you will likely be willing to make those trade-offs for the cash your company needs to succeed.

Whatever your startup plans, there is a way to get started, with or without outside financing. It is critically important that you work through your business idea in detail, including all planning and financial projections, before you reject your idea because of lack of money. The more you plan, the better able you are to see ways to bootstrap by starting smaller, cutting expenses, and exploiting opportunities that will allow your business to get off the ground.

Idea

Many potential entrepreneurs are excited by the idea of starting a business, but do not have a particular product or service in mind on which to base a business. Currently, the most popular advice is to select something you are “passionate” about, and build a business around that. The theory behind this advice is that you will be more dedicated and committed to a business that involves something that you love. The flipside of this advice is that involving yourself in that activity 60 hours per week may take some of the joy away — a pastime that was a great escape from the grind suddenly becomes the grind. For some, this choice is obvious, and you have probably considered turning your hobby into a business for a long time. For others, especially if you are still unsure about what business idea you should pursue, the chances are that you don’t have a passion that you want to turn in to a business. This is not an indication that you should not become an entrepreneur. In fact, many extremely successful entrepreneurs couldn’t care less what type of business they are in, as long as they can control the factors that make it successful!

If you fall into the “whatever business will work” category, your first order of business is to identify needs that must be filled, or new needs that can be created. How do you do this? Pay attention! Everywhere you go, everything you do, keep an eye out for problems people have and brainstorm potential solutions. Keep a pad of paper with you and write down every idea you come up with. The reality is that just about everyone could come up with at least ten business ideas right now if desperate enough. Think about what you are good at, jobs you think you would enjoy, things your friends and neighbors complain about, improvements on products or services that could save time or money. Consider the market you are most interested in targeting — what do they do? How can it be done better? What product or service do they need that they don’t even know they need yet? Include ridiculous and impossible ideas. The act of writing down even outrageous ideas can enhance creativity and out-of-the-box thinking, eventually leading you to a business idea that is viable and fits you.

If you have trouble getting started, surf the web for lists of business ideas, scan startup magazines at the grocery store, and talk to your friends and neighbors about your desire to start your own business. There are many, many business ideas that can be developed into successful companies. If you are determined to work for yourself, finding the right business idea is a minor obstacle. Of course, it’s hard to argue with “doing what you love” — just remember that the reality of owning your own business requires the bulk of your focus to be on the business side. Most successful entrepreneurs will tell you that the right set of business skills can make any business idea enjoyable and profitable. As long as you are willing to put in the time and commitment to learn everything you can about your business, you will succeed.

Security

Many potential entrepreneurs who are on the fence about whether to launch their own business are concerned about the perceived lack of security and high risk involved in going out on their own. There is a common belief that working for others is more secure than working for yourself because of the “guaranteed” paycheck. As the recent economy is showing us, working for others is no guarantee of job security! One in ten of your peers are currently unemployed, and the job market is going to get worse before it gets better.

Working for yourself is often considered “risky” by non-entrepreneurs, but most business owners don’t see it that way. Instead, entrepreneurs see every factor as within their control and as an opportunity to build their business into a successful company. With your own business, you are in complete control of the direction of your business, you decide how and when to market, you manage all the finances, and you make the final decisions about every aspect of growing and developing your idea. While it’s true that any failures are your responsibility, business ownership tends to drive entrepreneurs to pay closer attention to the details and factors that drive success or failure, and have far more incentive to pick themselves up when they slip and try again.

The primary factors in reducing the risk in any startup are good planning, efficient marketing, and solid financial management. Good planning does not mean throwing together a basic business plan using a ready-made outline. Rather, you need to completely flesh out your business idea, considering all relevant factors from your business name to target market to expenses. Efficient marketing begins with a complete understanding of who you are trying to reach and how your product or service will grab their attention.

With the ever-changing marketplace, it is more important than ever to research and understand the various marketing options available and establish procedures for ensuring your business is getting the best return for your marketing dollar. Financial management of the business is often a struggle for new entrepreneurs. Owning a business is all about turning a profit, regardless of the type of business you choose. It is critical for new business owners to select the right accounting system (not necessarily the most popular) that will allow you to accurately evaluate the financial health of your startup, and to understand the basics of evaluating the numbers on a regular basis.

If you are working a full-time job now and are reticent to give up that steady paycheck, consider starting your business part-time. As mentioned in the earlier, working on your idea just three hours per week for one year is equivalent to taking one full work month to focus on your startup. In addition, starting your business while still employed eases the financial pressures inherent in startups. By tightening up your personal expenses, many entrepreneurs may be able to launch their business without any outside investment. At a minimum, completing all of your business planning while working will make it clear whether working for yourself will be successful enough to support you financially and how much capital you will need on hand to survive those first few months.

One side note — some potential entrepreneurs worry that if they start a business and it fails, then all of their personal assets (house, savings, etc.) will be at risk. The primary avenue for protecting yourself from that possibility is to organize your business as an LLC or corporation and to make the effort to keep your business compliant. Basically, this entails keeping all personal and business records completely separate, filing all required paperwork and fees with the state on time, and maintaining accurate records of your business entity. In addition, new business owners should avoid providing a personal guarantee to any lenders or suppliers, if possible. Business failure does not necessarily mean a devastation of your personal assets as long as you plan from the start to protect and separate your business and personal worlds.

The slow economy and tight job market make this an excellent time to start up your own business. By planning your company conservatively enough to survive this economy, you will develop a culture of careful spending, efficient marketing, and consistent oversight that will prepare your company for explosive growth once the economy bounces back.

Personality, Knowledge & Skills

Some potential entrepreneurs worry that they do not have the right personality, knowledge, or skills to successfully launch and run their own business. While certain traits are generally associated with the entrepreneurial spirit, there is nothing magic about owning a business — anyone with the desire can learn what they need to know.

The personality traits that non-entrepreneurs generally associate with entrepreneurs are that they are extreme risk-takers, are very outgoing, have no fear of failure, and have a high tolerance for uncertainty. While it seems, at first consideration, that these traits might be required for taking the chance on your own startup, they are not. All different types of people have successful companies, the trick is to use your own traits to your advantage. If you do not see yourself as a risk-taker, you are likely to put more time and effort into planning each facet of your business idea, researching and comparing options to find the best avenue to reach your business goals. If you are an introvert, you can choose a business model that allows you to work independently, add key personnel to handle public appearances, and practice your networking skills in smaller, controlled environments.

A healthy fear of failure is an excellent motivator, as long as you don’t allow yourself knee-jerk reactions to setbacks. For many successful entrepreneurs, the fear of failure translates into the drive to succeed. Changing your mind about how you channel your fears can be a critical factor in the success of your business idea. A low tolerance for uncertainty is often reflected, again, in careful planning as well as close attention to the financial management of the startup. In reality, some of these presumed “entrepreneurial traits” can be a real disadvantage to a new business owner. If you have no fear of risk or failure, you are far more likely to take uncalculated risks that are far more likely to put your success in jeopardy.

Most business responsibilities fall into two broad categories — operations and business. Operations refers to what your business actually does — makes and delivers pizza, trains construction managers, publishes a sports magazine, etc. The business side refers to the tasks that must be handled for all businesses — accounting, marketing, customer service, etc. Entrepreneurs tend to be very strong in one area or the other, but often not both. Those who choose a business idea because it is something they are passionate about usually have the operations under control but worry about handling the business side of the equation. Even if you are “doing what you love,” the whole point of business ownership is to turn a profit. It is critical to understand how to handle the money and to equip yourself with the right tools to make financial management of your startup as accurate and straightforward as possible.

In addition to basic accounting skills, an entrepreneur must be familiar with research and planning, marketing, and dealing with customers and, in most cases, employees. None of these skills are particularly difficult, but those with little or no experience will need to take the time to understand and master these areas in order to drive their business to success. For those who have a particular business idea but have limited knowledge of the actual operations, you can take classes, work in the industry to learn the ropes, or hire key personnel with the experience your business needs. Whatever skills you lack to successfully startup your dream business, a little time and dedicated effort can get you where you need to be.

Where to Start?

Congratulations! You have eliminated all the usual excuses for not getting started on your new business…..now what? Figuring out where to start in developing your business idea is a major stumbling block for most first-time entrepreneurs. The available advice is all over the place and often lists “business requirements” without telling you how, when, or why to do them. Simply registering your business and posting a website is not enough, and the available fill-in-the-blank business plan templates do not tell you how to dig into the details of your startup or what you should be looking for.

For every business idea, the first order of business is to actually plan your business. Merely writing down your business idea and throwing together unjustified numbers for projected financials is not a plan. Rather, you need to thoroughly define your product, identify your target market and how to reach them, determine all legal requirements, and develop solid, justifiable financial projections before you can decide whether your business idea is viable. In addition, you need to develop a complete marketing plan, from the role, design, and SEO of your website (yes, your business must have a website!) to the best routes for reaching your market through paid advertising to the role of networking in developing your business.

Quite a bit of effort goes in to a well-developed plan, but the experience will leave you completely prepared for managing your business once it is up, running, and making money. Your well-developed plan will provide you a roadmap for where your business is going and how to get there. In addition, if you will need outside investment to launch your startup, all of this research will easily develop into your formal business plan and will clearly show that you have done your homework and know your business inside and out.

With your completed plan, you will know whether you can finance the startup yourself or will need outside investment. If you can fund it yourself, the next steps are to execute the plan and open for business! Then, your responsibilities shift to the actual operations, managing employees, overseeing the financials, and planning for growth.  

There is a lot to starting your own business, but the independence and flexibility that comes with entrepreneurship is well worth the effort. The process is not as complex as it seems, and the keys to success are easy to remember — Planning, Marketing and Financial Management. If you begin your business with these factors in mind, you will greatly reduce your risk and greatly increase your odds of success.