Easy Steps to Success
By: Gary A Clark
Large companies are downsizing.
Reengineering is all too common. Many people are seriously considering
starting their own business, so as not to become victims of the all
too uncertain corporate world. The purpose of this article is to help you do
A new small business is
started every 11-seconds throughout the U.S. Many fail because
of poor planning, but you can improve your odds of success by learning
from the mistakes of others. (Read number 11 first for one of my big
mistakes in the early days.) Here are "success steps" that are
based on many "real-life" lessons of success and failures.
1. Learn all that you can
You might know a lot about your product or service but you might not
be knowledgeable about the practical aspects of starting and operating a
business. Be honest when assessing your knowledge and take
advantage of available information as well as the various support
organizations such as the SBA (800 827 5722, or on the internet at
http://www.sbaonline.gov) or your local
SCORE chapter. Learn from others mistakes!
2. Ask for assistance
That is what we are here for. You cannot be an expert on
everything. We're not, but we have the people who are experts on their
individual practices. Get assistance early from as many sources
as possible. Talk to your attorney,
accountant and banker. Get them to become professional members of the
incubator with you, so that they can join you online as part of your
Board of Directors. Talk to your friends, family and your
competition. There is only one stupid question, and that's
the one you don't seek an answer for.
3. Plan, re-plan, and plan everything, then work that plan
A major reason for business failure is lack of planning. Fail to plan
and you plan to fail.
Prepare a strategic plan for your business that clearly defines
your mission, your present situation, your strategies, and where you
want to be in the next three to five years. This plan will be your
roadmap to effective decision making.
Before you start operations, make certain you are protected from a
legal and insurance point of view. Select a business legal structure
(talk to your attorney) and develop a insurance program (talk with an
independent insurance agent) that is best for your type of business.
Take NO chances!
5. Avoid hiring employees at the start.
But make sure that your business plan says you will. This is not
always possible but put it off for as long a possible. Outsource your
requirements. This incubator is your best resource for
outsourced expertise, and as a member, most of the services are
already available to you as part of your membership. Where else
can you get a Contingency Planner /coach and instructor for $250.00 salary?
Look at temporary help agencies for secretarial or general office work
if you need someone. Look to contracting agencies for IT
professionals. The legal complexities of hiring and maintaining
employees (even one!) can be daunting and take up a lot of your time.
6. Purchase a computer and learn to use it.
Operating your business without a computer will put you at an
immediate disadvantage. They are simply too valuable as a time-saving
tool. Don't be overwhelmed at the apparent complexity of a computer,
once you begin they are quite easy to use. Furthermore you will want a
computer to take advantage of the internet and this sites training
courses - the most exciting development of recent times for
send a message anywhere in the world with no long distance charges)
and research (The world wide web or WWW is an amazing business
information source for every topic imaginable -
learn how to use
it profitably. )
7. Don't give up when the journey gets a little rough.
There will be good times and bad. Be persistent and stubborn - view
any setback as a learning experience and an opportunity for additional
success. That's where the support of the Incubator comes into play.
We walk you through the difficult times, and help your nurture new
ideas in our brainstorming sessions. Then twice monthly, we have
a online chat meeting where we air out the problems and discuss
alternative actions with you.
8. If you don't have a visual image of you being successful, get
Keep your goals in mind and expect that you will achieve them. Don't
lose sight of your goal ... keep pushing. Write the goal down
and post it above your desk, where you see it every day. It
sounds trite, but it works. Remember this, Microsoft was started
in a garage by a college dropout. Yahoo and many other well
known services were products of an incubator program much like this
9. Don't delay acting on a good idea.
Even a great idea is worthless if you don't do something with it.
Windows was an idea born out of the frustration of trying to navigate
a computer system. Get frustrated and write down your wish list
of things you want to see changed, then change them, and sell the
results as a business. You say you don't have any good
ideas? Carry a journal and write down everything. At the
end of 6 weeks, see how many you really had, that had you not written
them down, would have been forgotten.
10. Act successful
Even if you are down to your last
dollar, walk, talk, act like you are successful. You are
en entrepreneur. Very few people have the tenacity, the
intestinal fortitude or the talent to be an entrepreneur, so you are
one of the few who can do it. Will it be easy? No.
But it does get easier, and look at the ride you're on. This is
E-ticket all the way.
11. Know what each hour is
Here is where the at home worker gets
into real trouble. You forget that you are working. So
does your spouse. It is easy to pick up the kids, run to the
store, start dinner or baby-sit. After all you are home - right?
Ok, well here is where we are going to stop this right here and now.
Ready? Get a pencil and paper and write down the following.
Calculate the monthly expenses you are
going to, or are incurring. (Phone, electricity, etc. - your
business share) Take that number times 12. Lets say that this
amounts to $500 a month or $7200 a year.
OK, now calculate what you want to make
a year. Pick a number that is commensurate with what you feel
you are worth, if you were being paid by someone else. Lets say
for this illustration that is $40,000 a year or $3,335 a month.
Now, do you have an employee or an outside contractor you pay, such as
an accountant, bookkeeper, attorney? Add their monthly fee in.
Lets say the is $2800 for a round number of $50,000 (I expect your
numbers will be higher then this, but you will get the idea)
$50,000 is your hard costs. (Yes
you have to pay yourself, or else don't go into business) Add another
$5,000 for misc. cost, for a total of $55,000. This is the nut
you have to crack each year. Bottom line. Now take that
number and multiply it by 3. $165,000 is roughly what you have
to have in GROSS sales in order for you to set aside $55,000 and pay
your household expenses. Gross sales, less commissions, less
expenses, = net income, which is the part you get paid from.
Take $165,000 and divide it by 244,
which is the average work days in a year. This should come to
about $675.00 a day. Divide that number by 10, which is what you
will average in daily hours, which leaves you with $67.50 per hour.
This is your hourly rate.
If you are not making this each and every hour you are working, then
you will not make your nut for the month.
Now tell me. How many day care
centers charge you $67.50 an hour for taking care of Junior.
That hour trip to the store, just cost you $67.50 plus the cost of
Do you get the picture?
I sat down with my wife one day and
went through this same exercise. After that date, never did she
ask me to go to the store again. Not once has there been an
argument over picking up my daughter. She knows the numbers and
so do I. So when ever I plan something, I always ask myself, can
I afford the $67.50 a hour to do this? (my actual number is
closer to $90.00 but each persons number will be different.)