Why More People Are Building Their Own Business

The entrepreneurial dream of building a business is something that nearly everyone has felt at some point in his or her life. For some it never gets further than a childhood lemonade stand on the street corner, but for others it is desire and a passion that just will not leave them alone.
Why are more and more people turning their dream into reality and building their own business? What drives a person to dive into the uncertain world of entrepreneurship, with all of the attendant risk, hard work, and unknown outcomes? Let's look more closely at some possible answers to these questions and more.



The urge to follow a dream

Some people cannot remember a time when they did not dream about building their own business. Maybe they have a passion for building, or inventing, or selling, or any one of millions of other potential dreams. For these people the urge to follow their dream is stronger than the fear of failure, so it just feels natural to stray from the safe path of employment into the world of business ownership.
The most successful "dreamers" are those who combine their dream with savvy market evaluation, a solid business plan, and the inevitable hard work. Even if they do not succeed on the first try or the second try or more, dreamers are so passionate about their vision that they view failure not as the end, but rather as a temporary stop along the way to ultimate success.

Escape from corporate life

Many people turn to building their own business as a way to escape the corporate life. The reasons for wanting out are nearly endless, ranging from quality of life and family issues all the way to a firm belief that they have a better way of doing business. Regardless of the reasons, one thing these "escapees" have in common is that they have enough business experience and have spent enough time in the working world to have a basic understanding of what it takes to run a business.
In the current marketplace of generally high employment, more and more escapees are making the leap from corporate life because they feel relatively safe doing so. They know that if their business venture ultimately fails the high demand for qualified workers means they will likely not have too much trouble going back to the traditional working world.

Downsized

The entrepreneurial ranks of the downsized are among the fastest growing group of people starting their own business. Like escapees from corporate life, they tend to have strong business backgrounds but unlike escapees, their departure from the corporate world is involuntary. Faced with no job and the need to make a living, many simply choose to start their own business rather than go through the hassles and hoops of finding a new job in the corporate world.

Too much energy to retire

Another increasingly common group of entrepreneurs is retirees who just cannot see themselves living a leisurely life of retirement. Instead, they opt for starting their own business in order to stay busy and occupied in their later years.
For these people, the idea of starting their own business is simply another stage in their life to be embraced and appreciated for all of its challenges and adventures. They typically feel financially secure and are willing to risk some of that financial security for the potential rewards of becoming a successful business owner.

Starting Your Own Business Has No Age Limit

What is an entrepreneur? Webster's dictionary defines an entrepreneur as "one who organizes, manages, and assumes the risks of a business or enterprise." Rather a blunt, detached definition, don't you think? Notice, though, that no mention is made of age. The reality is that an entrepreneur is so much more than what Webster defines, and the sense of passion and adventure that leads you to start your own business is not limited in any way by your age.

How old is old enough?

If you are old enough to conceive of a business idea and are willing to put in the time and effort to make it a reality, then you are old enough to start your own business. It does not even need to be a groundbreaking or especially innovative idea to be successful. Many successful lawn maintenance and landscaping businesses have started with one enterprising young person mowing lawns in his or her neighborhood, and more than one commercial artist has started out drawing posters for a community theater or creating cartoons for their local church newsletter.
On the other end of the spectrum, of course, are entrepreneurs who want to start a business but they think they are too old to do so. Nonsense! No matter your age, no matter your experience, you can be a successful entrepreneur if you have a good idea and are willing to put in the work to make your business a success.

What does it take to be a successful entrepreneur?

Becoming a successful entrepreneur requires a few things, regardless of age or experience. The most successful entrepreneurs typically have the following attributes:
They are constantly coming up with new ideas and make a habit of writing them down
They actively look for ways to promote and develop their ideas
Their ideas usually are based on solving a problem or providing a convenience
They use their ideas to make money
They enjoy the challenge of starting their own business
This is certainly not an exhaustive list, but these are the characteristics and behavior patterns that are common among entrepreneurs of all ages.

My parents say I'm too young

Many young people have entrepreneurial ideas, and they are more likely to be successful if they have parents who support and guide them along the way. However, even if your parents say you are too young to be an entrepreneur, maybe their concern is more about the scope or scale of the business you propose. For example, if you propose a lawn mowing business that will require so much of your time in the spring and fall that your schoolwork suffers your parents will rightfully be cautious. Try talking with them to find out what it is about your idea that worries them, and ask for their help and advice to make your idea manageable enough that they are willing to support your efforts.

My children say I'm too old

Entrepreneurs on the other end of the age spectrum often meet resistance from their own children when proposing a business idea. Again, it is very common for their worries to arise from concerns about scale and scope of the proposed business. Many adult children worry about the impact starting a business will have on a parent's health, free time, and financial well- being. Just as with young entrepreneurs, it is a good idea to talk with your children about your business idea and help them understand exactly what you have in mind.

The Advantages Of Franchising

Many entrepreneurs turn to a franchise business as a way to become self-employed. This can be a very good choice for both novice business owners as well as experienced business owners, providing many advantages over starting a business from scratch.

Help and expertise

One of the biggest advantages of pursuing a franchise business is the help and expertise available from the franchiser. While this will vary from company to company, most franchisers will provide you with or help you acquire everything you need to start up and run the business. Common areas of help include:


- Location selection
- Construction and design
- Equipment
- Supplies
- Training
- Marketing
- Operations
- Management
- Hiring and employee relations

Some franchisers go so far as to make their franchises true turnkey businesses. In these cases the franchisee may be provided with an intact business operation, established territory and clientele, and even inventory and other supplies stocked up and ready for use.

Higher success rate

Investing in a reputable franchise operation greatly increases your chances of being a successful business owner. This is because you are buying an established and proven business concept, along with all of the support and expertise provided by the franchiser. In fact, some business experts estimate that franchisees have up to an 80% chance of success within the first few years of business, compared to a 70% to 80% chance of failure for those entrepreneurs who instead choose to start an independent business from scratch.

Lower supply costs

Most entrepreneurs face significant costs for all of the various supplies and materials they need to do business. Everything from office supplies to advertising to the products themselves typically cost more because a single business owner must purchase in small or limited quantities.

A franchisee, on the other hand, typically has lower supply costs because most of their supplies are purchased through or in the name of the franchiser. The larger purchasing power of the parent company means they can get better pricing on nearly everything a franchisee needs, and that savings is then passed along.

Established brand recognition

When an entrepreneur chooses a reputable franchiser, they get the significant advantage of established brand recognition. They do not need to go through the long and painful process of creating a brand, communicating it to the marketplace, and establishing a base of customers. The franchiser has already done that, whether recognition has been established nationally or regionally.

A good franchiser will reinforce the brand recognition on an ongoing basis as well, usually through advertising and promotion. A franchisee typically supports these activities through monthly franchise fees and marketing fees, but the costs are quite a bit less than if the franchisee were to take on these functions independently.

Four Top Tips For Starting Your Own Business

Congratulations! You have done enough research and gathered enough information to believe that your business idea is a good one and you have decided to move forward with starting your own business. What are the next steps you need to take?

Here are our four top tips for important steps you must take to successfully start your own business.

1. Establish the correct legal structure

Perhaps the most important decision you will make about your business is selecting a legal structure. There are several legal structures you can consider for your business, including:

a. Sole proprietorship

b. General partnership

c. Limited partnership

d. Limited Liability Partnership (LLP)

e. C Corporation

f. S Corporation

g. Limited Liability Company (LLC)

h. Non-Profit Corporation

i. Professional Corporation (PC)

j. Professional Association (PA)

k. Professional Limited Liability Company (PLLC)

The best legal structure for your business will depend on several factors, such as your need to obtain insurance or financing, the type of business you want to run, and how you intend to handle tax issues. It is well worth the time and cost to consult a professional to help you select and establish a proper legal structure.

2. Establish an accounting system

The accounting system will be driven in part by the legal structure of your business. The larger and more complex your business, the more likely it is you will need outside help with your accounting, whether in the form of a bookkeeper for handling daily and weekly transactions or a Certified Public Accountant (CPA) for more comprehensive accounting work.
In most cases it is a good idea to consult a CPA during the business startup phase to get professional advice and insight into the accounting needs you will likely encounter. Even if the ultimate advice is for you to handle accounting tasks yourself via one of the many small business accounting software packages on the market, you will have the peace of mind that you have chosen an accounting system that is best for your business.

3. Register the business name

It is important to register your business name, which often occurs as part of obtaining your business license. When you register the name, you identify your business as a unique entity with a unique identity, and help protect yourself from the potential confusion that could result from someone else taking on the same business name as you.
The registered business name will be reflected in all of your official business paperwork such as tax statements, tax returns, financial statements, etc. Specific registration steps vary from state to state, so check with your Secretary of State for details about the correct process for your location.

4. Establish sound business processes

When you establish sound business processes right from the start, you simplify your business life immensely. The right processes will help you generate sales, properly invoice customers, and manage business growth over time. Key business processes include:

Sales process - prospecting for new customers, making and maintaining contact with customers, follow up and tracking of orders, generating referrals and repeat business

Billing process - invoicing, aging and tracking of invoices, posting payments to accounts, credit and collections

Growth process - hiring employees, evaluating expansion opportunities, risk vs. reward, financial requirements of specific growth options

Evaluate Your Idea And Weigh The Risks

So you think you have a terrific idea for a business. Congratulations! It is very exciting to contemplate taking that big step into entrepreneurship. Before you get too far down the path of dreaming about great success and riches, though, it is important to evaluate your idea and weigh the risks of pursuing it as a business.

Evaluate your idea

There are a number of ways to evaluate your business idea, most of which require a great deal of self-honesty and objective thought. Here are a few questions you should ask yourself when evaluating any entrepreneurial idea:

1. Does the idea truly solve a problem or fulfill a need?
2. What is the exact problem or need it will address?
3. Is your idea original and new?
4. Is your idea a unique combination or update of other existing ideas?
5. What are the limitations of your idea?
6. Are there other variations of your idea?
7. Is your idea appealing and easy to market?
8. Is your idea affordable to potential customers?
9. How complicated is it to put your idea into action?

Some of the questions you will use to evaluate your idea will vary depending on the specific product or service you propose. Use the above list as a starting point, then add or delete questions that are relevant to your particular business proposal.

Weigh the risks

Once you have evaluated your idea and thoroughly explored its potential, you must also weigh the risks of moving forward with starting a business based on that idea. There are always risks inherent in any business, but if you identify them in advance and determine which risks are reasonable you can significantly increase your chances of success. Some of the questions to ask as you are weighing the risks include:

1. What investment will be required to start the business?
2. What are the expected revenues for the first 18 to 24 months of the business?
3. Are the expected revenues enough to keep up payments on any financial debts that may be incurred?
4. What factors need to go right for the projected revenues to become reality?
5. What factors could go wrong and prevent the projected revenues from becoming reality?
6. How much competition is there in the marketplace?
7. Are there enough potential customers to justify the investment of time, effort and money?
8. What needs to go right for you to be successful and how likely is it that those things will occur?
9. What could go wrong and prevent you from being successful, and how likely is it that those things will occur?

It is critical that you be honest and objective about risks associated with your business idea. Only through critical thinking and careful evaluation of risk can you determine if it is appropriate to pursue your idea.

Are You Ready To Launch Your Own Business

Most people think at some point in their lives that they could launch their own business. While this may be true, there is a big difference between just launching a business and launching a business that has a good chance of being successful. How do you know if you are ready to start your own business? Here's a checklist to help you decide.

Personal checklist

1. Do you have a burning desire to start the business?
2. Are you willing to push through adversity and discouragement?
3. Are you confident in yourself and your skills?
4. Are you realistic about yourself and your skills?
5. Do you have a support network of friends, family and others who will provide encouragement along the way?
7. Do you have the motivation to do what it takes to succeed?
8. Do you have a realistic idea of what it takes to succeed?
9. Are you willing to devote long hours to your business?
10. Are you willing to be the primary decision maker and take sole responsibility for the business?
11. Do you have any experience in your proposed business field or industry?
12. Do you have a detailed business plan?
13. Do you have a vision for your business?
14. Are you ready to market and promote your business?
15. Can you manage the many relationships (customers, vendors, suppliers, etc.) required to run a business?
16. Have you thoroughly evaluated your business idea, including weighing the risks of moving forward?
17. Do you have the financial and emotional resources to get through the first 18 to 24 months of your business?
18. Are you willing to put the wants and needs of your customers ahead of your own wants and needs?
19. Are you willing to take risks?
20. Are you competitive enough to persevere?
21. What will you do if you fail?

Some tests, quizzes or checklists will give you a score based on your answers to the questions, then use the score to indicate how ready you are to go into business for yourself. This checklist, though, does not have a specific method of scoring or a minimum score to indicate that you are strong entrepreneur material.
Instead, this checklist is designed to provoke thought and clear, objective self-examination of your motivation and preparedness for starting your own business. Think carefully about each question, and answer it with complete honesty. Once you have completed the list, look back at your answers and use them to help guide your decision making process.