1. Work Ethic

Actually, this one is listed first for a reason. As a young boy my father instilled in me a tremendous work ethic. He had the means to shower me with money, with possessions, with all the things I saw my peers getting from their fathers; however, he chose to teach me to work for what I wanted, to earn it. At the time I resented that and I didn’t understand his method. It wasn’t until I was through college and out on my own that it hit me in the face like 100,000 tons of bricks: in the real world, one must work if one hopes to eat, and those who work harder and smarter eat better and more often than those who don’t. I am talking about being able and willing to actually get your hands dirty, hitting the ground running and using a little elbow grease if that is what it takes to get the job done. At the age of 15 my first real paying job was as a dishwasher in a pancake house. Every Saturday and Sunday morning my mom would wake up and drive me to my 6:00 AM to 3:00 PM shift. Let me tell you, this wasn’t a job with two 15-minute breaks and a nice 30 minute interlude for lunch (apparently, there were no enforced labor laws in Oklahoma in 1976). I am talking about 9 hours straight through, washing some of the nastiest dishes imaginable – and this is back in the days when you could still smoke in restaurants. I never actually saw a sign to this effect, but I have to believe that this pancake house had some sort of rule that EVERYBODY was required to smoke and they were required to flick their ashes onto their plate. They also must have been required to stay and smoke for no less than 2 hours – sitting there smoking and flicking – because by the time I got those plates the ashes, the cigarette butts and syrup had become chemically sealed to the plate.

So here I am, a 15-year-old kid living in one of the most expensive neighborhoods in Oklahoma City, in a beautiful 5 bedroom home (my parent’s) right on the 18th fairway of the country club golf course I find myself scraping other people’s filth from plates and racking them up and running them through a commercial dishwasher. The only break I ever got from that task was when I had to wash the pots and pans that the cooks would bring over and stack at my feet. What the heck was I doing working this awful job making minimum wage? The answer is simple: I was earning my spending money and learning the value of a good, hard day’s work. Again, at the time, I would have welcomed someone just giving me the spending money I needed. But when I look back over my life it is clear to see that that job was one of a series of significant events that helped mold me into the person and businessman I am today.

This concept of having a strong work ethic truly manifests itself in the world of business ownership, where you will find that a successful business is run by someone who is proficient in most/all of the tasks associated with operating that business, and will be able to do them well. When your employees see you working in the business and exhibiting consistent energy and a “roll up your sleeves and do it until it’s done right” attitude, they will adopt the same attitude and you will inspire a sense of team pride. There really is something to the phrase “early to bed and early to rise makes a man healthy, wealthy, and wise”. I believe it refers to preparing yourself for a productive and diligent work day- there is no getting ahead in the entrepreneurial world for those who compromise the important tasks at hand in favor of slothful behavior or a lazy, “that’s not my job” attitude.

2. Goal Driven – but keep life balanced

As people look to start a business, they will always have one particular goal, or maybe a set of goals, associated with the endeavor. I have never known anyone who just woke up one day and thought it might be a good idea to start their own business, but don’t know why they are doing it or what they want to do. Here is a short list of some of the goals I hear my clients talk about as they look to ramp up a new business:

*To bring a unique idea or product into the business world;
*To work for themselves and be in charge of a business;
*The business is something they want to do with another family member and aspire to pass it on to their children;
*To prove to themselves that their product is as good as people tell them it is, and that people will actually pay for it ;
*To conquer the sheer challenge of getting a business started;
*To have a business that will grow equity over time and provide future wealth and retirement stability;
*To earn a comfortable or above average income;
*To have a more flexible work schedule, creating more family time.

As you can see from this list, some of these goals are wrapped around a sense of accomplishment, some of them involve purely economic reasons, and some of them have to do with more personal aspirations. I feel it is important to define what your personal goals are while you are dreaming up your new business endeavor, and then mold your business operation in such a way that it feeds into your personal goals. Take caution if the expectations you have for your business only include feeding your financial goals – this may cause your personal life to become unbalanced. Your new business should make possible the achievement of other important goals that are not financially motivated: family and social commitments, spiritual growth, community involvement, your own health and wellness, etc. Trust me, you don’t want the only time you see your children to be when they are already asleep because you are always working late, or that you don’t take time for a routine date night with your mate, or have a night out with friends on a regular basis. Schedule and follow-through on those important things – in the end you will be glad you did, and your business will be better off for you doing it.

Hopefully I have made my point that I believe in not focusing simply on money and financial gain while developing your goals in the world of business ownership and entrepreneurship. I tried that as a young manager and it did get me the promotion I sought, but it also left my personal life very much out of whack. The key message from this section is that successful entrepreneurs are goal-oriented – they wake up every day and have their to-do list to get accomplished and they work hard to finish that list before the end of the day, because they know tomorrow will have its own list. To be a truly successful entrepreneur and to sustain that success over a period of time will require you to have a well balanced life. Yes, I see the how television and movies portray the hard driving, smart and cut throat businessman who runs five different businesses and makes tons of money, and they then show what a romantic they are and a sophisticated socialite – but I am talking about the real world, not Hollywood. Since you and I live in this real world where there are only so many hours in the day and we all possess only a finite amount of energy, we must allocate that time and energy appropriately. Set your goals carefully and with balance, budget your time and energy well, and you will find that your entrepreneurial project will be much more rewarding and profitable in the long run.

3. Competitive

Entrepreneurs strive to be on top, to be successful, and to win. They are typically competitive by nature and this competitive drive is one thing that can lead them to the top of their industry or trade. They want to win the negotiation process; they want to win the sales contract; they want to win in the hiring process in landing key employees; they want to be the most profitable; they want to win customers away from their competitors. This competitive nature will also sustain them through the process of getting a new business venture off the ground. There are so many things that need to be accomplished just to get a business started and a lengthy list of tasks that require stick-to-itiveness and continual accomplishment. For the less competitive person it is easy to give up along the way, as the road can be rough and bumpy when it comes to writing business plans and securing financing, for example. Of course, I am not saying that if you lack this competitive drive that your are doomed as an entrepreneur – what I am saying is that most successful entrepreneurs possess some degree of competitiveness which drives them to be successful. If you have an internal stirring that is driving you to start-up a new business, that can be construed as being competitive in nature. I find it interesting that three of the most common synonyms for the word competitive are gung ho, spirited and ready for action. I think we can all agree that anyone who takes on the tasks and responsibilities of starting up and running a business would possess these qualities to some extent.

It is important to point out that truly successful entrepreneurs also focus on achieving these “wins” by staying within the guidelines of accepted rules and practices…maybe bending them a bit…maybe even finding new and legitimate ways around the rules, but doing so with a great degree of integrity. Victory gained through unscrupulous means will lead to short-lived celebration, as no business entity can successfully exist for the long haul while cheating and breaking the rules. At some point those businesses and their devious practices are always exposed. Raise your hand if you have ever heard of Enron! We will address these points more in depth in just a moment.

4. Multi-Task Ability

The job functions required to operate any business can be broken down into two categories: technical and managerial. The successful entrepreneur understands the relationship and dynamics between these two and how each depend on each other, and will be able to multi-task his or her attention to both and understand that at times they are equally demanding of attention. However, there will be times when one will dominate their time and focus. The technical side of the business is the production of the goods, the performing of the services, the (I am not fond of this phrase, but will use it this one time) “blue collar” side of the business. To operate a business there is almost always going be technicians painting a home, making a widget, operating a cash register or flipping a burger. The managerial side of the business focuses more on sales, financial records and analysis, employee oversight, and process improvement. One does not laud over the other because they depend on each other to exist. A successful entrepreneur will understand the relationship between the technical and managerial responsibilities within the operation, which means they are balancing the needs, successes and challenges of each of them.

As you venture into your new business start-up, you must determine whether you are planning to focus your day-to-day involvement predominantly on the technical side. I have worked with many clients who started a business and planned on being the repair person, the delivery driver, or the cashier in the shop full time. There is nothing wrong with being an owner/operator and putting yourself in the role of lead technician in your business – but you must understand that if that is your business model, it will usually prevent you from growing the business past a certain point. Most new businesses must begin with the owner as lead technician, but the business model is for the owner to vacate that position by hiring someone to fill that role once the financial statements prove that the business is ready for such a transition. In making this transition the business owner is now freed up to concentrate on the “big picture” and is better able to balance her time in overseeing both the technical and managerial sides of the business, which ultimately will drive the growth of the business. A truly successful entrepreneur will plan for this transition in their pre-opening financial projections and will strive to make it happen at the appropriate time

Your decision to start a new business has been made. Now what do you do? Sometimes it’s a bit overwhelming to look at where to really start the process. Do you look for the location first? What about an estimate on how much it will cost? Should I secure the product agreements before I find the markets? Should I pre-advertise or just make an announcement? Who should I hire first, if anyone at all? There are hundreds of similar questions which confront the new business start-up.

After 30+ years of opening new businesses and analyzing existing businesses, I’ve put together a practical guide for the beginning steps to starting a small business. Whether you, as an new entrepreneur, buy an existing business, or buy a franchise or perhaps start a home based business, the business planning resources are the same. What is different are the business strategies, upfront costs, business opportunities and step by step instruction available to start a small business venture.

So lets get right to it. Everybody tells you to start the steps with a business plan. Well that’s all very nice, and you will need it for sure, but let’s get organized first.

*Step 1. Get some file folders and label them as follows:

– Product – Anything having to do with what your going to sell or service.

– Finance – Where’s the seed money coming from, cost estimates, where’s the money going.

– Receipts – Any money you spent thus far.

– Organization – Exactly what form is this new enterprise going to take.

– Ads & Marketing – Anything new ideas with generating revenue for the company.

– Government – Permits, license, new business tax info etc.

– Strategy – What is this new company all about and how are you going to do it.

– Locations – Are you leasing space, Realtor information – or DNS if Internet based.

– People – Who all is involved and what is their participation, partners, joint venture.

Use these folders to file every bit of information you’ve collected on starting your new business. If you need other categories, then make them up as needed. But try to think in terms of less files and not more. It’s easier to find and your mind will quickly adapt to the organization.

Step 2.

Once you’ve assembled the information the next step in starting a new business is due diligence – a legal term used to determine if everything that was offered is in fact, real. But the same practical approach taken when buying a business can be used when starting a new business. Use the information you’ve already gathered to lay out the realistic size of your market and the revenue you expect to receive on a monthly basis. If your income is sufficient to cover whatever costs you expect from running the business operation then you can continue to the next step. If not, then you need to expand your market, change your product, reduce your costs or start over. Let’s get real here. Be Smart.

Step 3.

Now you can put together a complete business plan which will include the following:

a. Statement of Purpose (some call this an Executive Summary)

b. Market Analysis – Expand this further using the information in step 2 and really get into the details of how you plan to approach the market for you new product or new service. You should also really get into primary and secondary competitive markets.

c. Business Description – What exactly are you trying to do and how do you plan to make money from your new start-up business? Layout a few paragraphs about the overall concept of your new venture.

d. Organizational Setup – what type of business are you going to do. Will it be a sole proprietorship, a corporation, a partnership? Who is involved, what are they going to contribute, and how much will they own? What will the management structure be like? Who answers to who? You need to get this stuff addressed in the beginning or else it will be a complicated factor later.

e. Sales and Marketing. The details here cover all areas, even those that are not practical the first year or two. You need a variety of methods to execute and sustain your sales. Make sure you know everything your competition sells and how they sell it as well.

f. Products. Layout all of the products or services that you are going to sell for your new business.The details (actual products names and sizes etc.) can be put into an addendum at the back of your new business plan. But the overall package of what your are selling should be justified.

g. Capital requirements – How much money is it going to take to start and operate your new venture less the amount of money you currently have available to put into the business. How do you plan on getting the rest of the money – if you need it? Many people start small by using their credit cards for finance. Don’t forget to include your living expenses for at least six months.

h. Financials. This is where all of the accounting and cost analysis for the new business is located. A break-even analysis, cost analysis and projections for the first 3 years should give you a performance standard to judge whether or not you are meeting your goals.

i. Addendum: This covers everything else that may be important for your business operation. Include lists, phone numbers, mentors, useful web addresses, accounting details etc.

Final Step

Evaluate all of the information you’ve assembled. If the business venture looks viable, then give it to someone with experience in business or someone you trust, or perhaps your banker, accountant or attorney, and get a second and third opinion. Consider their suggestions and correct any errors. Use their expertise right from the beginning.

This is the just the beginning steps to starting a new business. There is a lot more to do, but once you get through this, I’ll have a lot more for you to do.

Now, should you decide to buy an existing business from someone, then you still need to go through all the beginning steps. The information will come a lot easier since there should be financials, trade secrets etc. readily available.

If on the other hand you decide to purchase a new franchise, the franchiser will provide almost all of the information in general terms. You will still need to get specific about your particular market.

The easiest and last option is to start business online. The costs are so inexpensive and the market so large, that the four step process will be shortened by about 70%. You still need to do all the steps, but because of the costs involved, the time frame is much quicker.

Refer to your business plan often to make sure that you stay on course. If done correctly, there is no reason for you not to be successful in your business operation.

* If you are starting an Internet business than create folders both on your computer under “name of the business”. The same goes for your email program. Any receipts, for instance, from purchases online can and should be kept together rather than scattered all over your hard drive. If you’re doing different projects, keep each in the same XL file, label and add “sheets” as needed.