Starting Your Own Business- Part 1

STARTING YOUR OWN BUSINESS
(a three part series)
Part One: Getting Ready

by Michelene Malosh

This series is based on the premise that there are three steps to starting a business:

Step one: Getting Ready. "I’ve got a dream - Where do I start, Who do I call?"

Step two: Planning. "Put the essentials on paper and in action – The Business Plan."

Step three: Commitment. "Launching your enterprise successfully."

For the run of this series, I will use the metaphore: Get Ready! Get Set! Go! to illustrate these three essential steps.

Carol sits in her corporate office and more and more frequently tells herself, "I can do this better!" "I’d really like to be my own boss and do it my way!" Mary stays at home caring for her two young children, yet she has great typing and organizational skills and a desire to start generating income and with re-entry into the business world. Last month at age 52, Charles, a highly-seasoned professional at the peak of his career, was suddenly downsized by his company and wonders, "now what?" Lindy and Chris have full-time jobs, a part-time passion for their unique brand of art, and a vision of someday opening their own art studio and store. Looking for a waitress job for extra income, and not succeeding, Annie "falls" into managing a food stand. Eventually Anne purchasing the food stand.

Are you someone who, like Carol, Mary, Lindy, and Chris, has a desire to earn extra income in an untraditional way? Do you have a great business idea and have a yearning to be your own boss? Do you want to run your own show and strike out independently to establish and operate your own business? Are you like Charles or Anne, finding yourself unable to obtain or retain desired work through an employer, consequently falling into your own business?

No matter what route or motivation, all business owners and entrepreneur wannabes have one thing in common - the possibility that their own special, unique business venture will become wildly successful and make them independently wealthy. And every once-in-a-while it happens. Take Anne…

In 1988, after borrowing $6,000 from her Amish father-in-law to purchase a food stand booth in a small southeastern Pennsylvania farmer’s market, Anne Beiler decided to forego the former fare of pizza, ice-cream, and pretzels and just specialize in soft pretzels. Anne and her husband experimented with different ingredients and coatings, with the tastiest combination occurring as a result of a wrong delivery by a supplier. As the stand’s tasty pretzels become increasingly popular, Anne’s relatives started-up similar stands throughout the county. In 1989, Anne started franchising her business to the public in 1997 there are 327 franchises in the United States and 12 internationally. System-wide, Auntie Anne’s Pretzels, Inc. (headquartered in Lancaster County with Annie as CEO), in 1996 generated $1.6 million in net sales!

Part of the "American Dream" in our free enterprise, capitalistic system is that there is a possibility that anyone can make it! But what is the probability of successfully starting your own small business? How do you increase your chances of "making it" and being profitable?

Some background information on the growth of small businesses sheds some light on the proliferation and popularity of "going independent". The number of small businesses in the United States continues to increase annually. Small businesses are increasingly becoming a greater and greater force in our economy in terms of generating business activity and jobs. And more and more individuals continue to launch their own business ventures.

According to the Small Business Administration, there are 22.1 million small businesses today in the United States today. Small Businesses has created 75% (1.9 million out of a total 2.5 million) of all the new jobs in 1995. Currently 53% percent of the entire private sector workforce comes from small businesses; 47% of total sales is generated by small businesses. And, small businesses provide most workers with their first jobs.

What is considered a "small business"? The Small Business Administration defines a small business in the manufacturing sector as a firm employing 500 employees or less, and in the service sector as an entity generating no more than 3.5 million dollars in annual sales (on average in a 3 year period).

So, with all these new small businesses being created - how many actually are profitable and successful?

The U.S. Small Business Administration estimates that approximately 800,000 individuals will start their own business in 1997. And it is projected that 80% of those businesses will not last (through failure and by choice). But, as Jack Cleek, Public Information Officer of the Small Business Administration’s Philadelphia district office, states, 20 % of ALL attempts of starting a business do succeed. The additional good news is that of this twenty percent of new "start-ups" that stay afloat through the savvy determination of the entrepreneur, 60% will continue to succeed after 5 years.

It appears that the biggest hurdle of success in starting your own business is in the beginning stages and getting started on the right track!

So, when you want to, and are determined to, start you own small business, but you have no prior entrepreneurial experience,

• What are the keys to the successful initial development of your first business? See the accompanying article below.

• Where do you start? What are the available resources? See the accompanying article on page 33