How To Prepare For Business Ownership

At any given time 30 percent of the population is thinking about starting a business. If you are thinking that you would like to open your own business, then prepare for success. Entrepreneurs succeed because of hard work and preparation. Don’t underestimate the importance or time commitment involved in preparing for small business ownership.

While an employee may lose a job as a result of a reorganization, a business owner can lose his or her life savings. You want to protect your investment, if you own a business. The best protection for your business is to be prepared for entrepreneurship. There are five ways in which you can prepare for business ownership, before you actually take the plunge and open your own company. Five pre-business preparation tips appear below: 

• Define Your Professional And Personal Goals

• Take A Course On Business Management

• Prepare A Complete Business Plan

• Complete A Loan ApplicationTest Market Your Idea

You may want to own your own business in order to be your own boss and set your own schedule. You may want to own your own business to get rich. You may want to own your own business to pursue a self-directed career in a field you love. All three are valid reasons for wanting to own a business. The critical aspect after you answer the initial question of why be an entrepreneur becomes what do you want to achieve in the long term professionally and personally.

You need to look at your work and personal life based upon a 10 year span. Most small businesses are considered start-ups or growth firms through their first five years in operation. The company only begins to mature after the five year mark. Does this time investment suit your goals? What do you want out of life? Many entrepreneurs tell me they now work harder than ever, usually 50-70 hours a week. Can you make that commitment?

As you begin to answer these fundamental questions, you are mapping out the course, profitability and role you want a small business to have in your life. One of the reasons often cited as why a small business fails is the lack of management experience. Do you have management experience? If yes, great what else do you need to know. If no, are you willing to learn about business management before going into business?

Preparation helps protect your investment both in time and money. Since most entrepreneurs need some capital financing to start a business, preparation is necessary to develop the business plan and loan application package required in order to secure a bank loan. Along with that preparation, a lender will expect you to have capital or assets to invest in the business. Whether or not you receive a loan will depend upon your credit history, your ability to repay debt and the soundness of your business idea and business plan.

If you make it this far in the process, you are serious about entrepreneurship. Next, test market your product or service. Find out if consumers are willing and able to purchase what you want to offer the marketplace. You may find that adjustments are needed, the idea is right or that there isn’t a market after all. This testing phase allows you to invest a small amount of money in order to find out if this business can work in the marketplace. You may gather your results and change the business idea or decide against entrepreneurship.

Make well informed decisions based upon fact and preparation. If you would like to learn more about starting a business, preparing a business plan or test marketing, contact the SCORE Association (Service Corps of Retired Executives). More than 12,000 volunteer, business counselors donate their time and talent to assist entrepreneurs start and operate small businesses. SCORE is a nonprofit organization that provides business counseling as a free and confidential community service. As part of pre-business counseling, you can receive a free copy of the business planning workbook How To Really Start Your Own Business. For a referral to the SCORE chapter nearest you, call 1 (800) 634-0245.

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