Starting a New Business
Working for yourself can be liberating and terrifying at the same time. Perhaps you have already joined the ranks of "self-employed" and work directly with a client or two while still employed, or maybe you are thinking of venturing out on your own. In this economy the latter may be a result of you being (or expecting to be) the victim of a reduction in workforce.
Here are some interesting statistics from small business counselors, Score.
The estimated 29.6 million small businesses in the United States:
Source: U.S. Small Business Administration Office of Advocacy, September 2009
Small Business Openings & Closings in 2008:
Sources: U.S. Small Business Administration Office of Advocacy, September 2009; Survival and Longevity in the Business Employment Dynamics Database, Monthly Labor Review, May 2005. Redefining Business Success: Distinguishing Between Closure and Failure, Small Business Economics, August 2003.
The good news is that establishing a business is fairly easy, but running it, and more importantly keeping it running, is the hard part. Statistically, three out of 10 small businesses do not exist after two years and five of 10 fail after five years. According to the U.S. Small Business Administration (SBA), the primary reasons for failure of these businesses are competition, poor marketing, lack of experience, insufficient capital (money), poor location, poor inventory management, over-investment in fixed assets, poor credit arrangements, personal use of business funds, unexpected growth and low sales.
Planning for a business is the most critical part of a new venture. There are a few additional pitfalls to avoid.
Starting a business for the wrong reasons: Unlike in movies, the real world doesn't respond well to the "build it and they will come" mentality. Sometimes what you think may be an important service (or product) is not as valuable to a potential client. If you have a service or product that someone wants, how does your idea of the value (read money) line-up with a potential buyer's view?
Falling in love with your idea: Don't fall into the trap of "falling in love" with your idea without being absolutely sure the potential market for that idea has also bought-in. Do not ever assume that a client needs your services. This is a common trap I've seen broadcast engineers fall into, when trying to market services to stations.
Becoming a specialist: By specialty, I'm talking about the person who is the greatest transmitter engineer, or can set up processing beyond the limits of mortal humans, or can modify audio equipment so any dog within earshot of the radio will bark -- you get the picture. While on the surface having a specialty seems highly marketable, it severely limits your opportunities to sell other services that you may be equally capable of providing.
-- continued on page 2
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