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Starting a New Business
Becoming a generalist: The generalist knows everything about everything. In some cases he also has his colleagues believing this; however, in practice much of his knowledge is limited to only the highest levels of a particular subject. When they try to put it into real world practice, these people tend to fall short on the deliverable.
Being sloppy: I've run into some very talented people who are either incapable or for whatever reason unable to work neatly and efficiently. For example, whether you are wiring a circuit board or an entire facility, it should always look professionally built. During a project, is the work area kept clean and safe for other people occupying the area? Are you (and your employees) dressed appropriately and professionally for the particular job? And have you provided complete post documentation to your customer? How many engineers (and service companies) have you run into that believe not providing documentation to an employer or customer ensures that they will get some kind of job security? This never works!
Keeping commitments: You have heard the phrase "Over commit and under deliver." Unfortunately this is all too common, especially among small business start-ups. There is a natural tendency for a new business owner to make promises in order to get new business. Don't do this -- unless you want to be sure that the business will fail quickly. Here are the likely scenarios you can expect with a poorly crafted proposal:
You provide a proposal, the customer (who has some experience) already knows the proposal is flawed either disqualifies you for lack of experience, or worse case, the customer accepts your flawed proposal, you both sign a contract and they wait until you fail. Now you could be on the hook for some legal/financial issues and have your reputation pretty much destroyed.
Make sure you have a complete understanding of the work the customer desires, define exactly what the scope of work entails and be certain both parties are in agreement. Have a clear understanding of all other limiting factors such as access, time period you can work, who purchases materials, etc. If this work is performed under a contract, I suggest letting an attorney review before signing anything.
Have proper licenses and insurance
This may seem obvious, but before engaging in any work for a paying customer, be certain you are properly covered with the appropriate insurance products. You should engage an insurance agent that specializes in business coverage. This is a very litigious world and you need to ensure that you and your family are protected.
Also ensure that you have the proper licenses and certifications (if required). As an example, you are contracted to find land in order to move a transmitter site. In most states unless you are a licensed broker in that state or an employee of the client, it is illegal to represent a third party in the transaction. Also be careful when you are dealing with construction for a third party, doing things like electrical work could land you in trouble, particularly if that work causes some damage in the future. Unless you hold a valid Professional Engineers license in the state you are working, stay away from all things structural, mechanical and electrical, that fall under the applicable building codes.
Create your business plan
The reason I started this article pointing out the pitfalls is to reinforce the idea that all good businesses start with a strong written business plan. A good starting point is the SBA's website.
A good business plan should contain the following information: Executive summary, company description, product or service, market analysis, strategy and implementation, Web plan summary, management team, and financial analysis.
These are essential not only to form the basis of how you will operate your new venture, but to be able to secure financing in the future, which will be necessary to grow the business. The business plan should also be written in a manner where you can identify measurable benchmarks that give you a tool to understand the performance of the business against your original expectations. This will allow you to make changes as needed to achieve your end goal.
Establishing the business
As I said at the beginning, establishing the business is fairly easy these days. You will need to establish the business structure of the company i.e. sole proprietorship, LLC or corporation. Each of these has certain advantages depending on your situation. I recommend you consult an attorney and search the many resources on the Web to see which is right for you.
McNamara is president of Applied Wireless, Cape Coral, FL.
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