The Hard Truth You Must Know as a Business Owner
I graduated from an Ivy League school and a prestigious business school and have being involved in 12 business startups (5 of which I funded 100%) over the past 25 years. I’ve also consulted for business startups and was a business broker for about 5 years. I’ve seen the starts and the happy endings - as well as A LOT of failure along the way. Here’s what I’ve learned - “knowledge” is only about 10–20% of the equation. While there are many basic things you should know to start a business (see my business plan section below), you’re real focus should be on what you actually need to “create and own a successful business”. To own a successful business, make sure that you have these skills and personal attributes:
- An incredibly work ethic (“grit”),
- The ability to learn and adapt (very quickly)
Off course, you’ll also need a decent business plan and enough money to reach a specific financial milestones but the 3 items above are probably 60–70% of the equation. If you believe you have these, then starting a business is relatively easy - assuming you’re written a business plan (see below), then just select an ownership structure (sole proprietorship, LLC, corp), file your paperwork, find a location/office, start selling your product/service and voila!
The business plan: in terms of straight “knowledge”, learning all the aspects of a good business plan are paramount. But, don’t think that you need a 50 page treaties on every detail of the business. You can write a business plan on a single page of paper. It’s going through the thinking process that is most important, and should always answer a few basic questions:
- What is my product and how do I make sure it’s awesome (operations)?
- Who and where are my customers, what do I know about them, and how do I sell to them (marketing)?
- How will I let them know I’m in business (advertising) and how will they buy my products (sales)?
- How much will I charge for my product/service and how much will I make from every sale (finance/accounting)?
- Where will I have my office/shop/store and how will I manage it (administration)?
That’s it - if you can answer (and verify your answers) to these question, and you believe you have the personal attributes I described above, then you have 80-90% of the knowledge you need to start a business. The other 10–20% is the stuff that no one knows before you start, but you’ll learn as you go (and adapt quickly). Good luck!
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