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:

1. Who will you sell your product to?
2. How much will customers pay for this product?
3. 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.
4. Who is your competition, if any, and how much do they charge for their product?
5. Can you provide what the competition provides, but cheaper, better, or both?
6. 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 lot of thinking. Thinking is free, and if you do enough of it, you will come up with a way to make your venture profitable.

Step two - Environment

This is another thinking step. How will you conduct your business? What environment will you need to create in order to make and sell your product? I like to think about three main areas here:

1. Equipment - What is the minimum type and quantity will you need to get started? How much will it cost?
2. Facilities - Where will you house your equipment? Can you do it in the unheated garage you already own, or will you need to rent space? Again, what is the minimum that you can get by with? Getting by on the minimum will probably be temporary, but saving money early on will help you achieve profitability as quickly as possible. Once you have profits, you can always re-invest them in better facilities.
3. Insurance – This is often the most overlooked cost. If insurance is required for you to be in your chosen business, the expense of it can make or break your company. Don't forget to figure these costs into your profitability estimates. Also, don't forget that insurance companies often have minimum requirements you must meet before they will even insure you. Do you meet the requirements? If not, how much will it cost for you to do so? And one last word on insurance: once you're in business, you could find yourself out of business tomorrow if your insurance gets cancelled. You have to be vigilant and do everything possible to limit or eliminate insurance claims.

The overall consideration with equipment, facilities, and insurance is "how much?" Have you bought the right amount – not too little, not too much? Will you be able to keep up all your payments even through a downturn in business? Losing your equipment to foreclosure is another way to end up out of business.

Step three - Implementation
There are three equal aspects to operating a successful business, and we've already talked about two of them: Product and Environment (or "Means" - the tools, buildings, and materials required to produce your product). The third aspect is Customers; without them there is no business. The Implementation phase is an attempt to mesh all three aspects into smooth-running, money making venture.

Any business, whether it be a new start up or a long running operation, is a constant battle to improve product quality and reduce cost. Never settle, and never become complacent with what you have done so far. If you do, the competition will begin to overtake you. The only way to succeed in the long term is to constantly seek ways to improve and innovate. The means of producing your product will also need constant innovation. Improving the efficiency of production, finding a lower-cost supplier, and selling outdated or unprofitable equipment will all improve your company and your profitability, and help keep you a step ahead of your competition.

Most entrepreneurs focus on the customer, as they should. But you should not fixate on the customer exclusively. In other words, spend time on all three aspects of implementation. By first ensuring that your product is high quality and low cost, you will find marketing and customer service to be easier than you might expect. Even so, the customer requires attention regardless of the quality, price, or efficiency of production. There are two main aspects to the customer part of any business:

1. Marketing - . Marketing is complex, but there are several good books on the subject. My advice is to be very careful with your marketing dollar. Buy some books about marketing and do your own research before you do your marketing, or worse, pay a marketing firm a lot of money to do it for you. A wise businessman once said, "Half of our advertising money is wasted. The problem is, we never know which half."
   In any case, you should have a plan and budget for marketing, even if you have enough business, and even if you have too much business. Too much business is nothing less than an opportunity to increase profit - by charging more or increasing production
2. Customer service - As with marketing there are a lot of good books on this subject. There are also a few golden rules that you must not forget.
   1. Treat others how you would like to be treated. This goes for the customer as well as employees.
   2. Exceed expectations. Do more than the customer expects. You don't have to go overboard with this, but the little things do get noticed.

Any type of business can be successful, and you can be the one to make it so. Never sit still - your venture will require everything you have to make it a success, and most of all to keep it a success.

"It is not impossibilities which fill us with the deepest despair but possibilities which we have failed to realize."
–Robert Mallett