Question: I have an idea to start a new business, but I'm just not sure that I'm ready to act on it. Something is holding me back. Is this just normal "jitters" about taking the leap? Or is there something wrong with my business idea - or with me?
Answer: Well, you may be right on both of those counts. There are very common reasons for your hesitation. We'll look at them today in some detail.
First off, here is a very important concept. All of the supportive folks around you, like your friends and relatives, are probably acting as your cheerleading section. They are rooting you on, with the best of intentions. But, they may have little or no business experience or training. So here's the big problem: That's not really the type of advice that you need right now.
Sure, it's important to have support and encouragement. But right now what you need even more is some push-back. You need to talk with a knowledgeable business person who asks questions and challenges some of your assumptions. It's a bit like where a true friend in a social setting tells you that you have spinach in your teeth. The intention here is to focus in on possible trouble spots for your business. If your plan has an obvious fatal flaw, wouldn't you want to know about it?
Your startup has two major areas of concern. The first is your business model itself. This is about exactly how you will offer value (something people will pay for) to your prospective customers and clients. The second concern is about you - your personal knowledge, abilities and managerial skill-sets.
Here are some examples of questions about your business model.
-- Do you have a written business plan? If not, you need to get to work on this, pronto. For help, go to score.org, click on the "Templates and Tools" tab and see what looks suitable and helpful.
-- Exactly what is unique about your product or service? If it's already offered, why will yours be better and capture a market share? And if it's brand new, how will you generate awareness?
-- How did you determine the potential market for your products and services? Do they meet an existing "felt need"?
-- Have you laid out a strong online presence and strategy?
-- How long will it take for the business to have positive cash flow?
And, here are some questions about you.
-- What experience in any similar business field do you have? This could be as an employee, or even a college intern.
-- Have you operated any kind of business before? What level of business management skills do you have?
-- Do you realize that your technical skills are completely different from your business skills?
-- Are you able to wear all of the hats in the early stages of your business? Think of yourself as the C.E.O. - the Chief Everything Officer.
-- Can you make decisions when not all the information is in hand? Running a business requires making judgment calls, while also weighing the risk of making a wrong decision.
-- What backup financial reserves do you have? Your business may not have positive cash flow as quickly as you expect it to. Do you have personal or family resources, or borrowing power, to cover it?
-- Are you comfortable negotiating? Being in business is a constant process of deal-making. This includes vendors, suppliers, clients, customers, employees - it never stops.
-- Can you handle confrontation? As the owner, you will have to deal with the occasional angry client, customer or nay-sayer. You need to have skills to diffuse and resolve these situations.
-- How is your personal energy level? Starting a business has been compared to having a newborn baby: It's a 24/7 job.
-- Can you delegate? If not, you will have trouble growing.
-- Where do you want to be in five years? Put some thought into this.
So, here's the bottom line: You may or may not be ready to start your business right now. That's important to know, because a major cause of business failure is launching unprepared.
A nationally known business author, Carol Roth, has an excellent self-assessment. Go to entrepreneur.com and enter "do you have what it takes" in the search box.
To learn more about managing cash flow, and other small business matters, contact SCORE, "Counselors to America's Small Business." SCORE is a nonprofit nationwide organization with more than 13,000 volunteer business counselors who provide free, confidential business counseling and low-cost training workshops to small business owners. Call the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization,visit SCORE.org.
Ask SCORE is prepared for The Bellingham Herald by Bob Dahms, a business counselor with the Bellingham chapter of SCORE. Submit questions for this column to firstname.lastname@example.org.