NOTE. This article was first published in The Manila Times - Business Section, and also at the following web address:
We shall continue our Journey on Entrepreneurship. In my previous column, I asked the readers several questions to determine what business is right for them. To evaluate your answers and your business idea, first, list your reasons for wanting to go into business and keep this in mind all the time. These could be:
• To be your own boss
• To control your own time
• To have creative freedom
• To have financial independence, even get rich
• To fully use your knowledge, skills and network
• To turn your hobby into money
• To have power
It is also prudent, at this early stage, to recognize that there are challenges in having your own business.
• Losing money is a very real possibility. Your business might not succeed and you’ll never recover your start up capital, operational costs and more. You might even end up in deep debt situation.
• Starting and running your own business may entail high personal cost and sacrifices. You need to focus much of your energy, time, money and other resources into your business. Your family and friends might have to play second fiddle to your successful business venture. You might have to postpone that family vacation indefinitely. You might have to be up very early and retire very late with no rest in between.
• Managing a business means working with a lot more people like your customers, suppliers, employees, bankers, competitors, partners, people in your industry or profession, government bodies and regulators—past, present and future. You are not just responsible to a boss—everybody is your boss.
Here are some guides to determine the fit between you and your business idea.
1. To minimize these risks and to somehow immunize your business from them, start from a position of strength: start a business you know intimately. When I left my steady paying job in 1997 as an organization development specialist at Philippine Airlines, I went into the business of human resource and organization development consulting. It is right down the alley of my particular competencies, I am familiar with the ins and outs of operating a HROD operations and the business has a solid chance of profitability.
Don’t just go into business because it is the current fad. Don’t go into business that promises quick and big profits. Don’t put your money into something just because some senators and friends told you, “it’s a sure thing.” Most likely, these are business scams.
Getting into a business where you already have experience and competencies increases your advantage and chance at success. Already you have a network of contacts who could help you in getting financing, suppliers and customers.
2. If you are going into unfamiliar territory, but are dead set on it, be prepared to spend enough time learning about the business before you start and all throughout the life of your business. Mr. Jeff Bezos has never been an insider in the business of books before he established Amazon.com. But he is a committed entrepreneur and a relentless lifelong learner.
Don’t give up if you truly believe in that business idea. Get some experience in the business that you chose —even if you need to work for free. If you want to go into the day-care service but have never spent a day inside one, volunteer as a helper for minimum wage or even for free. Get to know the ins and outs of the business and learn everything you can about all areas. Talk to people who share your business idea.
3. Try it out. When you are at it, sense if you really enjoy the business and have the capacity to excel at it. You have a better chance at success if you really like what you are doing, if you have the “stomach” for everything it takes to make a go at it and if you have the right values and attitude to commit to it for the long term.
4. Assess your willingness and ability to handle all areas of your business. You can’t just turn over the financial processes and documentation to your hired accountant. You need to know about accounting and finance, marketing, operations, human resource development and general management of your business. You need to be ready to put in your heart, mind, body and soul whenever and wherever something needs to be done or things are not getting done.
5. Determine the financial soundness of your business idea. You need to studiously analyze your market and do break-even analysis as you progress. If you are able to realize revenues more than your break-even point all the time, congratulations! You’re on the road to success.
6. Continually evaluate the risks in your chosen business. Be critical and careful in preparing, reviewing and renewing your business plan. Even the best-laid plan could go awry and fly given particularly challenging situations. For example, SARS is now wrecking havoc to many business plans in different industries especially in Hongkong, China, Singapore and Canada. You need to know when and where to turn when things go everywhere but to your intended direction. You also need to know when and how to take steps backward, sideward or forward; backtrack and regroup; move forward and persevere; do nothing and hang on; or just quit.
7. Also take notice of external factors like government support. There are certain business ideas that government encourage and support with tax breaks, special financing programs and marketing incentives. These are deemed to contribute to our country’s development such as businesses that are export-oriented, employment-generating and small-medium scale.
Be aware also of businesses that will hasten the development and growth of our economy and people. Examples are engineering and IT industries and also pharmaceuticals, education, and energy development.
Next Monday, we shall discuss break-even analysis to know if your business idea will make money, at least in theory. A good business idea might not be financially viable.
WORLD PEACE. Let’s pitch in to make our world the best place to live in. Let us clean up our own mess in our career, personal, family and spiritual relationships. Never mind the mess of others. A text message from Atty. Benru del Rosario: One of the nicest things I love about mornings is that God doesn’t only give us a brand new day; but he also wraps it up with new hope and new beginning.
American Society for Training & Development. ASTD International Conference & Exposition will be held on May 18-22, 2003 at the San Diego Convention Center, San Diego California. For details and brochure, please call Ms. Malou Amante (715-9332) or Phiscan Travel (Thelma or Che, 843-1252)
(Moje Ramos-Aquino is president of Paradigms & Paradoxes Consultants and assists small and medium companies in their human resource and organization development efforts. She could be reached at firstname.lastname@example.org.)