NPR’s “Talk of the Nation” had a recent episode discussing one of the big trends in today’s U.S. economy: more people are starting their own businesses. There are many reason for this trend; perhaps people have been laid off from traditional jobs, or had their hours cut, or maybe they’re just looking to seize an opportunity and create their own career path.
With millions of Americans still out of work and the job market slow to grow, many people are taking their destinies into their own hands. Rather than wait for their next steady paycheck to appear, these entrepreneurs are creating paychecks of their own.
On the show, Rebecca Roberts of NPR interviewed Sarah Needleman, author of the Wall Street Journal small business column, “The Accidental Entrepreneur.”
Here were some of the key lessons for new entrepreneurs that were discussed in their conversation:
- Do your research: Many new entrepreneurs make the mistake of not doing the research prior to jumping in to starting their business. Spend some time to analyze the market that you want to enter – who are the customers who need what you want to sell? How competitive is the market? If there are already a lot of other businesses in your local area offering the same products and services that you want to offer, that could be a sign that your business is going to face some big obstacles. It’s possible to overcome a crowded market, but it takes careful planning. Make sure you go in with your eyes wide open.
- Set priorities: Another lesson for new entrepreneurs is to focus on the most important aspects of your business first: sales. If you don’t have sales, you don’t have a business. Too many first-time small business owners make the mistake of investing a lot of money on things like fancy business cards or elaborate websites, when that time and money could have been put to better use drumming up customers. Once you have a solid customer base and the business is generating momentum, then you can worry about updating your website. It’s best to start small, keep it simple, and scale up as your business grows, rather than spend heavily upfront and run the risk of not seeing any payoff on your investment.
- Bootstrap it: In today’s financial climate, it’s very difficult for small business owners to get bank loans or venture capital financing, especially for first-time entrepreneurs. So rather than rely on outside funding, it’s often best to start a business that requires very little start-up capital. The more you can do for yourself, the better. By “bootstrapping” your business, you save money and often save time because when there is no money, you’re forced to keep your overhead costs low and focus on the absolute essentials.
- Buy a business: If you have some money saved up and want to invest in a new business, the time might be right to purchase an established business or franchise. Selling prices for businesses are low right now, due to the same economic forces that have brought down the prices of houses and other assets – so if you want to start a business, it’s definitely a “buyer’s market.”
- Use the skills you already have: Starting a business doesn’t have to involve going into some completely new area of work; many of the new entrepreneurs got started as freelancers just by using the same job skills they already had developed in their traditional careers. One of the callers on “Talk of the Nation” was a former administrative assistant in Dayton, Ohio who had gotten laid off two years ago. After struggling to find a full-time job, she started doing part-time contract work for members of her women’s business networking group. Don’t de-value or overlook the skills you already have. The job market is slow but there is still plenty of work to be done; it’s just that there are more opportunities in short-term, temporary projects. But if you can stay aggressive and build up a base of clients, you can make a better living from project work than you might have made in a traditional full-time job.
Have you been looking for the right time to start a business? Talk to CorpNet for free tools, resources and guidance on how to incorporate a business by forming an LLC, S-Corp or other corporate structure, while managing all the required business filings. No matter what’s happening with the economy, CorpNet can help you launch your small business dreams.