Steps you can take to minimize risk and maximize success
With the New Year upon us, it is a time of reflection. We look back on our achievements and shortcomings from the past year. Most of us have a desire to make changes and set goals for the New Year. Many people will decide 2017 is the year to pursue their passion and turn it into a business.
Before you take the plunge, quit your job, and dive into an entrepreneurial endeavor of any magnitude, take time to reflect on, and explore, key issues to make sure that your business idea is feasible and needed in the marketplace. Here are some important issues to consider and steps you can take.
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Minimize your risks. A great way to begin building a business is to do it while you still have the security of a steady paycheck, benefits, and paid time off.
Create a schedule you can follow. Start by considering how much time you can devote to your business idea while still working. Then create a schedule. Starting a business will be difficult and time-consuming. Write down a list of all the activities and commitments you have in your life, with the amounts of time you devote to each during a week. This will help you to see if you truly have the time to devote to starting a business while working your current job. If you still want to move forward after reviewing this, see where you can feasibly cut out or change time within your current schedule to devote to further exploring and developing your business idea. Make an action plan with achievable goals for the day, week, or month. Without goals, milestones, and a plan to achieve your goals, it is very easy to slip into a very unproductive mode. That may create a sense of discouragement or defeat.
Start saving money. Realistically, you are going to need some form of sustainable income before your business is able to be that sole source of income for you. One way to achieve this is by taking the time, while you still have a steady paycheck coming in, to do your research, evaluate your ideas and skills, and assess your personal finances.
Obtain a personal credit report from any of the major credit-reporting agencies to get a current snapshot of where you stand. Check to be sure that everything on the report is valid and begin correcting anything that may be wrong, since this takes time to correct.
Review your personal finances and budget. What can you cut in order to save? Be prepared. You will need money of your own to invest in your business. Most lenders like to see an owner’s investment of 10 percent to 20 percent in cash, assets, collateral, or a combination of all. So while you have the money coming in, start buckling down. Create a budget to start saving.
Get connected. Take the time to assess your skills and how they will be used in your business. You likely possess at least some of the necessary skills to make your business happen, but if you don’t, you’re faced with a tough decision. Spend time learning a new skill or outsource to someone else who can help. Obtain advice from industry experts, find mentors, join industry-related networking groups, and focus on getting connected with those in your industry.
Research your competitors and the market. Decide what it is that will set you apart from the competition. Think about what the “need or problem” is that your business will solve. Fortune Magazine found that, “The No. 1 reason most businesses fail is a lack of market need for their product (this was cited by more than 42 percent of the failed companies). This really highlights the need to fully validate your idea and get honest feedback from potential customers before you start building, creating, and spending money.
Get organized. To help you sort out all these areas and turn your idea into a reality, it’s helpful to use tools to organize your thoughts and plans. This could include calendars, timelines, research tools, and whatever else you can come up with to effectively manage your time and ideas.
Develop a business plan. Business plans are “living documents,” which will continue to evolve as you develop your concept, start your business, analyze your growth, and work to achieve your goals. It’s about being prepared with a plan, planning for the unexpected, and developing your business concept and execution for both startup and beyond. Most people are overwhelmed by all they need for a business plan. Therefore, it’s best to break it down into sections to become much more manageable. Your plan is just one of many useful tools you can utilize to be sure you are considering and planning for the essential key areas within your business. Business plans provide a business “roadmap,” a way to convey your concepts to others, and are a “must-have” item to obtain almost any kind of funding from financial institutions, investors, or government/nonprofit grants. You can find a business-plan template on the U.S. Small Business Administration website at https://www.sba.gov/tools/business-plan/1.
Tap local resources. You can also feel confident in knowing that there is a bounty of resources and mentors available to you right here in Central New York. Most of them offer free and confidential counseling services to new or existing businesses. These resources include the Small Business Development Center (SBDC) at Onondaga Community College (OCC), SCORE, WISE Women’s Business Center, South Side Innovation Center (SSIC), CenterState CEO, the Tech Garden, and more.
So, after considering the key issues laid out in this article, if you find your business is feasible, needed, and properly planned, take the leap and make your dream a reality in 2017.
Keyona Kelly is a business advisor at the SBDC, located at OCC. Contact her at k.r.kelly@sunyocc.edu