The unemployment rate continues to be comparatively high at 7.5 percent, which means that many Americans remain jobless. Many of these individuals previously held jobs and professional positions where they gained significant knowledge and skills that can be used to establish their own businesses. It is not uncommon to start a business using the knowledge and skills gained from previous employment. Each year thousands of people take a chance on themselves to start businesses in the United States.
Generally speaking, entrepreneurs are individuals who are achievement-orientated, and like to take responsibility for decisions. These individuals have great perseverance, imagination, and energy along with willingness to take risks. A new entrepreneur should always include his/her lawyer, accountant, and banker in strategic planning sessions before final decisions are made. It is not cheap to have these professionals available but can be very expensive if you make the wrong decisions without their input.
To "stay in business" you have to have the ability to bounce back quickly from mistakes. If you make a mistake, do whatever is necessary to get results. It may be necessary to: a) change your business; b) change your product or service; c) change your personnel; d) change yourself; or e) change something else. One or more of these changes may cause your results to be different.
Another element that an individual who plans to have a business must have is "guts." In addition to the risk associated with going into business, you must be able to handle rejection. It takes a "strong stomach." Ask yourself if you can keep walking if you get turned down by a supplier, banker, or intended customer.
Being able to get along with people is another critical element. This does not require you to become a so-called "buddy." It only requires that you be able to work with your people so that they become comfortable around you and support you.
Setting goals is the key to success. You should set goals for yourself to accomplish the tasks necessary in starting and managing your business. Write down goals and specific target dates so that you know what you expect to achieve in the next two to three months, the next six months, the next year, et al. After you have done this, you should plan the actions you must take to attain the goals. (Do not plan to reach too many goals all at one time. Establish priorities.)
Keep score as you work to reach your goals. Be prepared to change your plan to allow for obstacles, which may stand in your way. More important, to the extent possible, foresee the obstacles and plan ways to avoid or minimize them.
Know what you are buying. Buying skills are an important element of a profitable business operation. You should determine the type, kind, quality, brand, size, color, and/or style of inventory that will sell the best. This requires you to pay close attention to the likes and dislikes of your customers.
In the beginning you may find it to be difficult to determine how many products or items to purchase. The best policy is to buy sparingly until you have enough experience to judge your needs. But keep in mind that you cannot sell merchandise if you do not have it.
To stay in business you have to be careful how you price your products and/or services. If your prices are too low, you will not cover expenses. On the other hand, if your prices are too high, you will lose sales. In either case, you will not make profit. Therefore, it is important that you establish your general price level before you open your business.
After you establish your general price level, you can set the prices for individual items. You should make sure that the price of an item covers the cost of the item, all other cost, plus a profit. This means you have to mark up the item a certain amount to cover cost and make a profit.
So, move forward and take a chance on yourself. The call that you are waiting for may never come.
Theodore R. Daniels is the Founder and President of the Society for Financial Education and Professional Development (SFEPD). Founded in 1998, SFEPD is a non-profit organization whose mission is to enhance the level of financial and economic literacy of individuals and households in the United States and to promote professional development at the early stages of career development through mid-level management.