Starting a business . . . Why just having a good idea is not enough
Tuesday, July 27, 2010
Posted by: Matthew Montoya
Starting a business . . . Why just having a good idea is not enough Published: Wednesday, July 21, 2010, 5:00 AM
By Gretchen Skok DiSanto
The word "entrepreneur” makes most people conjure up visions of someone like Donald Trump. In reality, the majority of entrepreneurs are the local businesses in neighborhoods and cities all across the country. They represent a huge sector of the economy.
According to the U.S. Small Business Administration website, small businesses:
• Represent 99.7 percent of all employer firms.
• Employ just over half of all private sector employees.
• Pay 44 percent of the total U.S. private payroll.
• Have generated 64 percent of net new jobs over the past 15 years.
Resources like the Entrepreneurship Academy at Lakeland Community College provide local small businesses, or those just starting out, with the steps they need to take to have the best chance at success.
What is an entrepreneur?
An entrepreneur, according to Wikipedia, is a person who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome.
What kind of preliminary research should you do before starting a small business?
You first need to look at yourself and determine if you are the type of person who will thrive at being your own boss. Entrepreneurs enjoy being involved in all aspects of the business. Starting your own venture enables you to escape the politics, red tape and bureaucracy of a large company.
Next, research your business idea on the market. That market research must indicate that there is a need and a want for your product and/or service.
It doesn't matter how good great-Grandma's cookie recipe is if there is no market for it. A business that doesn't satisfy a need will very probably fail.
Also look for signs of growth. If you enter a market where demand is decreasing, you won't survive long. Entrepreneurs need to live and breathe their markets. Learn everything you can about being in the business landscape.
What does the Lakeland Community College Entrepreneurship Academy do to foster entrepreneurship?
Since many small businesses start out as a one- or two-person venture, they need to acquire a working knowledge of many subjects. Accounting, human resources, sales, marketing, and public relations are just a few of the many issues that entrepreneurs face. The EA is designed so that a busy small business owner can take a step back, learn from local experts, and put the knowledge into a strategic plan.
Successful businesses plan for the future, and the EA helps entrepreneurs build the foundation for that planning. Like the saying goes, if you fail to plan, you plan to fail.
What are the benefits of being an entrepreneur?
The professional rewards of starting a company and succeeding are obviously very great. To be able to build something out of nothing requires a tremendous amount of work. The personal and professional satisfaction in achieving it makes the effort worth it.
Of course being an entrepreneur also means that you may see significant economic returns.
Should you start a business right out of college? Why or why not?
You should start a business when you are mentally ready and when you have enough evidence that there is a market for your product or service. This may mean that you start your business in high school, during college, after college, or even after retirement.
Who hasn't thought to him or herself, "I could have invented that!” Timing is everything, so if your idea meets a need you should consider what it takes to bring it to the market before someone else beats you to it.
What's the first thing you should do legally?
You need to determine a structure for your company. Will it be a sole proprietorship, an LLC or limited liability company, a C corporation, or some other structure? This decision requires advice from an accountant or an attorney in order to limit your liability. An attorney can help you review contracts, employee policies, and other legal business matters.
What kind of knowledge and/or experiences is it good to have before you start a business?
You should already have significant knowledge about the industry you intend to enter.
You'll only hold yourself back if you need to take a lot of time to understand the industry, needs and trends.
You'll need passion, persistence, energy, creativity, intuition, confidence, market awareness, and a hard work ethic. Embrace the fact that you don't and won't know everything so always approach your business with a lifelong learning attitude.
Is it a good idea to go into business with family members? Why or why not?
There are many successful family operated businesses. There are also many businesses that have failed because family members can't get along or compromise on critical business decisions.
The key to a successful business relationship with either a family member or a friend/partner is communication. If you can effectively communicate with your family, then you have a really good chance of making the business work.
However, just because it is a family or friend, don't assume it will always go smooth. Have formal agreements that spell out in detail who does what, when and where. For more information, visit www.lakelandcc.edu/ea