So You Wanna Start A Business!

Walsh Enterprises Business & Financial Advisors Huntington Beach, California USA http://www.awalsh.us walshal1@aol.com (714) 465-2749 So You Wanna Start a Business! Reprinted from a blog posted December 2008 at www.walshal1.wordpress.com

You’ve got a “hot idea”, and/or you’re aching to become your own boss – and now you’re contemplating a business start-up. Much has been written on the subject; most of which serves the author’s purposes or is written in “entrepreneur-speak” that leaves the reader confused. I’ve been directly involved in two successful start-ups. I’ve helped other entrepreneurs beta-test their ideas, develop business plans, and find start-up money; and I’ve sent lots of “half-baked amateurs” away. I learned the “biz” from pros who collectively have many successful start- ups under their belts. Following are some brief thoughts from my experience:

Getting the “clever idea” or the “entrepreneurial urge” is just the first step. Take the time to do your homework before you commit or go chasing money. Do research to determine just how marketable your idea is. • The biggest hurdle I’ve had to overcome in dealing with prospective entrepreneurs is their resistance to this topic. People get too focused on their “widget” or “idea”, and delude themselves into thinking that it “can’t possibly fail”. What resources do you need, and how knowledgeable are you about establishing and utilizing those resources? • Is there manufacturing involved? Do you need a website? Not only are there monetary concerns, but often there’s a skills- issue involved. You may want to explore having another organization produce and/or distribute your “widget”, or you may need intellectual assets. No matter how experienced and clever you are, you’re probably going to need help.

How are you going to live while your business develops? • Even if you have the “idea of the century”, it’s going to take time and money to bring it to market and develop a profitable revenue-stream. A friend of mine started a new business two years ago. She had long experience in the industry, I helped her develop a comprehensive business plan, she got great startup financing, she set up a solid business infrastructure, the competition was vulnerable, and she went after the market like a “tiger on fire”. She’s just now achieving marginal profitability; and she’s one of the more successful entrepreneurs I’ve known.

How much start-up money do you need, where are you going to get it, and what will you have to give up for it? • The banks won’t touch you unless you have lots of personal assets to borrow against (and then you’ll be putting those personal assets at risk). Venture groups will be fussy, and will want a big chunk of the business (plus some level of control). Angel Investors can help, but they didn’t get their money by being stupid and you’ll have to show them that you’ve done your homework (and they’ll also want a piece of the business). It amazed me time and again when prospective entrepreneurs sat down with me and expected that I’d be able to find someone to bankroll their venture without any sacrifices on their part. I wouldn’t even approach prospective investors unless I was satisfied that a venture was viable and that I had a solid business plan to present; otherwise I’d lose credibility and I wouldn’t be invited to approach the investors again. Note: With the current recession/depression in full-swing, and even large well-established companies having trouble raising money, new entrepreneurs are having great difficulty raising money unless they really have their act together.

Nothing in life is free. At some point, most budding entrepreneurs come to the realization that they don’t know everything and start seeking out free advise. You generally get what you pay for. The above considerations fall under the category of VISION. Once you’ve developed and sanity-checked the vision, it’s time to sit down and develop a BUSINESS PLAN. The business plan fleshes out the vision, with consideration to all the needs. It should also address all the identifiable risks. The business plan will not only be necessary to obtain financing, but it will serve as the “bible” for your venture. Going through the business planning process forces you to really think through all the considerations, and enables you to show prospective investors that you’re not one of the ”half-baked amateurs” I mentioned earlier.

These comments are intended to illustrate the need for Thought Before Action. They are intended to get you thinking, and do not begin to address all the topics you should consider in your planning. There are lots of resources available if you need assistance “filling in the blanks”. I highly encourage you to seek competent assistance as necessary to ensure that your venture has the highest prospect for success. Even the best-laid plans can fail (and as the old military saw goes: “No plan survives first contact with the enemy”), but I’ve found that there’s little prospect for success unless you go through this intellectual process first. To conclude: Think first! It’s free, it should be fun, and it will save you a lot of grief. Good Luck, Al Walsh

So You Wanna Start A Business!

by Alan Walsh on Jul 12, 2009

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