What Are the Things That Boost a Business’ Chances for Success?
Q: I am planning on starting a home-based business in the near future and have a pretty good idea about how I’m going to find customers and operate my business. But I was wondering: Are there any definite do’s and don’ts that would significantly increase my chances of success?
--Ajit Singh, Irvine
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A: These may not sound like much, but if you really follow these guidelines, you are probably more likely to succeed than to fail.
Don’t forget to speak to your potential customers before you go into business. Find out what they want and how much they are willing to pay for it.
Don’t confuse the existence of a product with the existence of a market.
Don’t lie to yourself.
Do add 50% more to your estimated expenses and 100% more to your estimated time.
No matter what else you do or don’t do, do your homework and do it exhaustively.
--Jon G. Goodman
Annenberg Incubator Project
USC
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A: Don’t assume your career and family life will balance automatically. You will have to work at it.
Do identify your top priorities--business, family and personal--before you start your business, and keep all three in mind.
Don’t become a workaholic just because you believe that working late will guarantee that your business will not fail.
Don’t underestimate how much time small children need if you have them now or plan to in the near future. If you have a child under 3, you may want to wait, plan and save your money for a few years. The amount of time you will need to devote to a new business will cause you to miss out on experiences that you will later regret missing.
--Leslie Godwin
Parent Support Services
Consultant specializing
in career and family
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A: Don’t assume that because you know how to do a specific task, like clipping poodles or fixing cars, that you can successfully run a business doing that. Doing the technical tasks is completely different from making a business work.
Do understand the financial reality of the business and don’t assume that the seed capital you have is sufficient to see you through.
Don’t assume that because you like people, you’re going to become an effective manager. Managing a business has little to do with managing people and more to do with managing business systems and processes.
Don’t assume you know the market--you probably don’t. While you’re learning what you don’t know, you’ll very likely go out of business.
Do realize that 84% of all businesses fail within the first four years. Don’t assume you’re any smarter than the rest.
--Michael Gerber
Small-business consultant and
author of “The E-Myth: Why Most
Small Businesses Don’t Work and
What to Do About It”
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Q: I retired after 26 years of military service and then worked for 16 years as a Los Angeles city employee in the probation and bail enforcement areas. I plan to retire in less than 18 months and would like to purchase a small security company or open up a security guard training school. Two friends of mine, also with backgrounds in the military, are willing to invest with me. What should my friends and I do?
--Gilbert Contreras, Canoga Park
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A: First off, think a little about yourself and about your friends, if they will be hands-on partners in this business venture. Are you a self-starter? Can you be a decision maker and manage the day-to-day operations of a business? Has any one of you had entrepreneurial experience in the past? If so, that would probably increase your chances for success.
Next, it would benefit you to do what are called “informational interviews” with other entrepreneurs, and specifically security firms or training schools, to find out how they got started. Pick out some successful firms, make appointments to talk to the people running them and find out just what is involved.
Before you buy an existing business, find out why the current owner is interested in selling. Check out the financial condition of the company, what kind of customer base it has and what kind of debt. You need to get all this on paper to get a true picture of the health of the company.
As far as the training school is concerned, it might be a natural for you if you or one of your friends has a background in security training. Again, do some research at existing schools--do they have waiting lists or are they having a hard time signing up paying students? Talk with your friends about how you would divide up the duties of running such an institution.
Finally, look into taking one or more short-term courses on entrepreneurship that are offered through colleges and the Small Business Administration so you can get good, hands-on training.
--Rosemary Royal
Los Angeles Trade-Technical
College
Assistant director of
career equity center
If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016 or e-mail it to business@latimes.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.
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