Entrepreneurs Can Take Steps To Enhance Chances For SuccessDate Submitted: 4/14/2005

Starting your own business can be one of the most exciting, liberating experiences. However, stepping out of the corporate world to be the captain of your own ship is a bold move due to the financial risk involved.

“Just like everyone is not cut out to be an artist, not everyone is cut out to be an entrepreneur,” said Steven Strauss, a business consultant and author of The Small Business Bible. When it comes to traits that make a successful entrepreneur, “there are some you can learn and some that are innate,” Strauss said. Before deciding to turn your great idea into a money-making machine, there are several questions to ask yourself to determine if you are cut out for entrepreneurship.

One of the most important questions is— are you willing to take risks, especially financial ones? “If you can live without getting a paycheck every two weeks that’s good, because you’re not going to get a pay check every two weeks,” Strauss said.

The second question is— do you have viable means to fund your business whether through personal finances or a loan?

To help answer this question a detailed business plan is in order, according to Strauss. “Most businesses don’t start with a business plan,” Strauss said. “I understand why, it’s a lot of work, but it really is a big mistake.”

The financial portion of a business plan should include, “realistic numbers—what it is going to cost to get started,” according to Strauss. Strauss cautions his clients not to be “overly optimistic” when calculating these numbers for a new business.

Often people start businesses with too little funding, Strauss said. When a business runs into trouble, business owners, not having managed that particular type of business before, frequently do not know what areas can be feasibly cut back to save money.

Many business owners end up cutting back on advertising and marketing, according to Strauss. “That is one of the biggest mistakes you can make,” he said.

For entrepreneurs who find themselves in a failing business, Strauss said there are two schools of thought on how to get out of it. One is to “cut back on everything but that which is vital to keeping the doors open,” Strauss said. However, this can be difficult because many business owners are unaware of what aspects of their business are actually vital to its survival. That second school of thought is to view trouble as opportunity. “Grow your way out of it,” Strauss said. “Go borrow the money you need.” While this is the far more risky road to take, Strauss said he thinks it is “the better answer.” “If you put $60 thousand out there you might as well go get another $10 or $20 (thousand),” Strauss said. The best use of that extra money is advertising and marketing, Strauss said. “The only way to turn the light on is to get your name out there,” he said.

With the financial stresses of opening a business comes other types of stresses as well. That is why entrepreneurs who have the support of their family have a better chance at succeeding. Starting a business “takes significant amount of time and money and everyone is going to have to be willing to pay the price,” Strauss said. Additionally, a new entrepreneur should ask her or himself whether or not he or she is good at multi-tasking and changing roles. “You’re going to be the president, the CEO, the director of marketing and maybe the receptionist,” Strauss said. “You’re going to have to wear a lot of hats. If you can juggle things, well that’s good, because you are going to have to juggle jobs.”

Incorporating a business early on is a good way to keep personal assets and business assets separate in case of a failure. In case the business is a winner, business owners should have an idea of whether they want to continue running that business as an independent owner to sell it for a profit.

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