Most people dream about owning a small business. You may have had a “notion” for years that someday you would be CEO of a company, successful beyond your wildest dreams. Turning that dream into reality is an evolutionary process, involving not only having a solid business idea, but also understanding the “business of running a business.” Then you must ask yourself: Do I have the guts and skills I need to make my dream a business reality?
You will need to get your arms around tasks like accounting, legal issues, operations requirements, branding and financial management skills, banking relationships and processes, and needed human capital.
On top of that, do you have the courage, persistence, skills, work ethic and focus needed to succeed? Can you do all the jobs entrepreneurs must do? These jobs include chief salesperson, secretary, payroll clerk, IT technician, HR manager, collections agent and once you get a sale – you must service the customer, too.
Don’t put your dreams at risk by not doing enough research and thoughtful planning. I have developed an approach that will help you plan your escape from corporate America. It’s called the Emerson Planning System or E.P.S. I have written about how to use this system in my new book, Become Your Own Boss in 12 Months.
It is a six step system.
I. Life Plan — A life plan is a way to identify your motivation, skills, and personal goals and how you figure out what you really want out of life. You must develop a plan for your life and build a business around that business. Examine how you live now and then how you want to live. What do you love? What makes you laugh? And what do you need to learn?
II. Financial Plan — You must be able to support your household for up to two years before you can afford to cut off your paycheck. You also need funds to operate your business for the first year. Use a strict budget. Too many small companies operate at a net loss and do not realize it until it’s too late. There are many money-draining traps that can snare small business owners. If you are not thinking about your enterprise making money every day, then instead of a business, all you really have is an expensive hobby.
III. Validate Your Business Concept — You have already considered your personal goals, motivations, and whether or not you can afford to become an entrepreneur. Now you need to examine the basic business concept and what skills you have and need to run this type of business. It’s time the start writing down how you will get things done.
IV. Marketing Plan — Who’s going to buy from you and why? This is the stage where you do your in depth market research, competitive analysis and target market analysis. It’s also very important to develop a signature that will set your business apart.
V. Business Plan–You must write a business plan. You would never take a trip without planning how much money it was going to cost for travel, what you were going to do during your trip and where you were going to stay. You need to give your new business the same level of attention. It’s also important to have realistic financial projections that reflect three years of operations. Be sure that you understand how much money is in every sale for you.
VI. Start Your Business —It is best to start your business while you are still working. Yes–You will be tired, but it’s best to keep those paychecks rolling in for as long as you can.
The Emerson Planning System starts with getting your personal house in order so that you can start your business that nourishes your soul and minimizes the financial hardship for yourself and your family.
Business success is rarely a straight line to the top. It is not enough to have a plan “A”, you must be flexible, meaning you need a plan “B” and even a plan “C” to side-step obstacles in your business. Problems are inevitable. Anything can happen–from needing alternative suppliers, having to change your product mix, adjusting your prices to the competition or having to create a new value proposition if the old one fails. “Solution” thinking is the only remedy. When you are a start up business, there are two things that can take your business down on any given day: lack of planning and lack of experience.
Don’t let this happen to your business. Plan for success!
Tell me how long you planned before starting your business.
Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Expert and Social Media Coach who hosts #Smallbizchat on Twitter. #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Melinda’s first book, Become Your Own Boss in 12 months; A Month-By-Month Guide to a Business That Works was released in March 2010 by Adams Media.
Great Post Melinda, the steps you listed are essential to starting a small business.
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Wow! Thank you! I always wanted to write in my site something like that. Can I take part of your post to my blog?
Thank you for your comment. You certainly can use this blog post just use my information at the bottom of the post.
Thanks–
Melinda