Easy Steps to Success

By: Gary A  Clark
 

Large companies are downsizing. Reengineering is all too common. Many people are seriously considering starting their own business, so as not to become victims of the all too uncertain corporate world. The purpose of this article is to help you do that. 

A new small business is started every 11-seconds throughout the U.S.  Many fail because of poor planning, but you can improve your odds of success by learning from the mistakes of others. (Read number 11 first for one of my big mistakes in the early days.)  Here are "success steps" that are based on many "real-life" lessons of success and failures.

1. Learn all that you can

You might know a lot about your product or service but you might not be knowledgeable about the practical aspects of starting and operating a business. Be honest when assessing your knowledge and take advantage of available information as well as the various support organizations such as the SBA (800 827 5722, or on the internet at http://www.sbaonline.gov) or your local SCORE chapter. Learn from others mistakes! 

2. Ask for assistance

That is what we are here for.  You cannot be an expert on everything. We're not, but we have the people who are experts on their individual practices.  Get assistance early from as many sources as possible. Talk to your attorney, accountant and banker. Get them to become professional members of the incubator with you, so that they can join you online as part of your Board of Directors.  Talk to your friends, family and your competition.  There is only one stupid question, and that's the one you don't seek an answer for.

3. Plan, re-plan, and plan everything, then work that plan

A major reason for business failure is lack of planning. Fail to plan and you plan to fail. Prepare a strategic plan for your business that clearly defines your mission, your present situation, your strategies, and where you want to be in the next three to five years. This plan will be your roadmap to effective decision making.

4. CYA

Before you start operations, make certain you are protected from a legal and insurance point of view. Select a business legal structure (talk to your attorney) and develop a insurance program (talk with an independent insurance agent) that is best for your type of business. Take NO chances!

5. Avoid hiring employees at the start.

But make sure that your business plan says you will.  This is not always possible but put it off for as long a possible. Outsource your requirements.  This incubator is your best resource for outsourced expertise, and as a member, most of the services are already available to you as part of your membership.  Where else can you get a Contingency Planner /coach and instructor for $250.00 salary?   Look at temporary help agencies for secretarial or general office work if you need someone.  Look to contracting agencies for IT professionals.  The legal complexities of hiring and maintaining employees (even one!) can be daunting and take up a lot of your time.

6. Purchase a computer and learn to use it.

Operating your business without a computer will put you at an immediate disadvantage. They are simply too valuable as a time-saving tool. Don't be overwhelmed at the apparent complexity of a computer, once you begin they are quite easy to use. Furthermore you will want a computer to take advantage of the internet and this sites training courses - the most exciting development of recent times for communications (e-mail: send a message anywhere in the world with no long distance charges) and research (The world wide web or WWW is an amazing business information source for every topic imaginable - learn how to use it profitably. )

7. Don't give up when the journey gets a little rough.

There will be good times and bad. Be persistent and stubborn - view any setback as a learning experience and an opportunity for additional success. That's where the support of the Incubator comes into play.  We walk you through the difficult times, and help your nurture new ideas in our brainstorming sessions.  Then twice monthly, we have a online chat meeting where we air out the problems and discuss alternative actions with you. 

8. If you don't have a visual image of you being successful, get one.

Keep your goals in mind and expect that you will achieve them. Don't lose sight of your goal ... keep pushing.  Write the goal down and post it above your desk, where you see it every day.  It sounds trite, but it works.  Remember this, Microsoft was started in a garage by a college dropout.  Yahoo and many other well known services were products of an incubator program much like this one.

9. Don't delay acting on a good idea.

Even a great idea is worthless if you don't do something with it.  Windows was an idea born out of the frustration of trying to navigate a computer system.  Get frustrated and write down your wish list of things you want to see changed, then change them, and sell the results as a business.   You say you don't have any good ideas?  Carry a journal and write down everything.  At the end of 6 weeks, see how many you really had, that had you not written them down, would have been forgotten.

10. Act successful

Even if you are down to your last dollar, walk, talk, act like you are successful.   You are en entrepreneur.  Very few people have the tenacity, the intestinal fortitude or the talent to be an entrepreneur, so you are one of the few who can do it.  Will it be easy?  No.  But it does get easier, and look at the ride you're on.  This is E-ticket all the way. 

11.  Know what each hour is worth.

Here is where the at home worker gets into real trouble.  You forget that you are working.  So does your spouse.  It is easy to pick up the kids, run to the store, start dinner or baby-sit.  After all you are home - right?    Ok, well here is where we are going to stop this right here and now.  Ready?  Get a pencil and paper and write down the following.

Calculate the monthly expenses you are going to, or are incurring.  (Phone, electricity, etc. - your business share) Take that number times 12.  Lets say that this amounts to $500 a month or $7200 a year.

OK, now calculate what you want to make a year.  Pick a number that is commensurate with what you feel you are worth, if you were being paid by someone else.  Lets say for this illustration that is $40,000 a year or $3,335 a month.  Now, do you have an employee or an outside contractor you pay, such as an accountant, bookkeeper, attorney?  Add their monthly fee in.  Lets say the is $2800 for a round number of $50,000 (I expect your numbers will be higher then this, but you will get the idea) 

$50,000 is your hard costs.  (Yes you have to pay yourself, or else don't go into business) Add another $5,000 for misc. cost, for a total of $55,000.  This is the nut you have to crack each year.  Bottom line.  Now take that number and multiply it by 3.  $165,000 is roughly what you have to have in GROSS sales in order for you to set aside $55,000 and pay your household expenses.  Gross sales, less commissions, less expenses, = net income, which is the part you get paid from. 

Take $165,000 and divide it by 244, which is the average work days in a year.  This should come to about $675.00 a day.  Divide that number by 10, which is what you will average in daily hours, which leaves you with $67.50 per hour.

This is your hourly rate.  If you are not making this each and every hour you are working, then you will not make your nut for the month.

Now tell me.  How many day care centers charge you $67.50 an hour for taking care of Junior.  That hour trip to the store, just cost you $67.50 plus the cost of groceries. 

Do you get the picture? 

I sat down with my wife one day and went through this same exercise.  After that date, never did she ask me to go to the store again.  Not once has there been an argument over picking up my daughter.  She knows the numbers and so do I.  So when ever I plan something, I always ask myself, can I afford the $67.50 a hour to do this?  (my actual number is closer to $90.00 but each persons number will be different.)