To be or not to be... your own boss
... or how to avoid some of the pitfalls of going into business for yourself.
 |
 |
If being your own boss is your heart's desire, then you might be thinking about starting your own business. Although most people fail at business, I firmly believe that those who came up short could have succeeded if only they had made some better choices or had a little more determination. No one can give you determination, but if you've got it, then by all means become your own boss. Making better choices, on the other hand, is sometimes a matter of getting a little good advice at the right time. Unless you are like my teenage stepdaughter, who needs to "make her own mistakes," then read on for a few of my ideas.
Getting started on your business journey involves three basic steps, and these don't include such terms as funding, tax statements, forms, contacts or even a business plan. Those things are all important to your overall success, but they are not the very first considerations you need to think about. The three steps really amount to a series of questions that you need to ask yourself about: 1. Product, 2. Environment, and 3. Implementation. Only you can answer them properly, and the answers that you come up with are crucial.
Step One - Product
I use the word "product" to mean anything you produce for sale, including services, so these rules apply even if you are planning to provide a service. You may already know the type of business you want to get into, and what product you want to bring to market. This is the step where you need to get a handle on the profitability of your venture. Let's face it: a business without profit is simply a hobby. Some people say, "do what you love and the money will follow." You should approach that idea carefully - while true, it is also fraught with financial danger. At some point you still have to pay the mortgage company, or worse, explain to your spouse that, while you have been fulfilling yourself and are happy with your chosen profession, you can't pay the bills.
So how do you find out if your product is going to be profitable? One way would be simply to go into business and see what happens. This approach produces 100% reliable answers, of course, but it's risky, time-consuming, and expensive. Another approach would be to pay for extensive market research and analysis. This is less risky, but still time-consuming and expensive, and the results may not be 100% accurate. Is there a third way to get a general working knowledge of the profit potential and marketability of your product, without spending a lot of time and money? My recommendation is that you do your own thorough research on your product and future competition. Make yourself answer these questions, in detail:
- Who will you sell your product to?
- How much will customers pay for this product?
- What quality level does the consumer expect from your product, and how much will it cost for you to provide it? Producing low quality costs money because the customer will be unhappy with your product and stop buying it. On the other hand, producing quality far above what the customer can use or appreciate costs money but doesn't allow you to charge more for the product.
- Who is your competition, if any, and how much do they charge for their product?
- Can you provide what the competition provides, but cheaper, better, or both?
- How much profit can you make from each unit sold? Will you be able to sell enough units to make a comfortable living?
Here's where the "do what you love" part comes in: if you find that your venture will not be profitable enough, you don't have to give up on it. Instead, change your approach. Find a way to make it profitable. Can you raise the quality of your product in order to charge more than the competition? Can you change the product itself to something along the same lines but different enough to make it stand out in the market and be profitable? The key to this step is to do a
|
|
| Pete Conrad has been in business for 20 years. He founded and currently runs Judgement Recovery Company, a repossessor that operates in Washington State and Idaho. Prior to that, he taught flying and founded Northway Aviation, a flight school still operating in Everett, Washington, which he ran for 10 years. Having built two companies up from nothing into large and thriving organizations, Pete now shares his experience and advice about business by publishing articles in various journals. He resides in rural Washington State, and still holds an Airline Transport Pilot’s license and his Flight Instructor certification. |