Starting a business is risky and must be managed! I started my consulting practice in 2003. At the time, I decided to join the local chamber of commerce. At one of the workshops, I was asked by one of the coordinators if I had an exit strategy or backup plan. My response, absolutely not! Why did I say that? Because I had just been laid off for the second time in my career; the thought of sending out resumes was unappealing; and psychologically I needed to be absolutely committed to what I was doing.
Now, my type of business does not have the financial risks for a startup. I did not immediately have to hire any employees, or buy inventory, enter into a lease, buy furniture and fixtures, etc. A few thousand dollars and a computer and I was off and running.
What were my risks: starting from scratch, not having the support of a large corporation and all the benefits it provides, learning how to self-promote; was that ad I placed in the newspaper going to be a bust or reap rewards? Was that networking group I joined going to pay off or not?
Due to the nature of my business, I encountered many small businesses and have been able to observe the successful risk takers and the not so successful risk takers;
The best risk takers were the calculated risk takers: having a business plan, having a source of capital, not entering into expensive leases, not overdoing it in the furniture and fixture department, managing debt not letting it manage them, negotiating rents, rates, etc., doing their homework with regard to their particular market, having a budget. The more you know, reduces your risk!
The worst risk takers sign leases they cannot afford, do not negotiate terms, rates, etc., have no idea whether a market even exists for their goods and services, do not have a plan of any kind, overspend on everything, do not keep good records, and do not ask for any advice; and if they do they don't take the advice!
What is an entrepreneur to do?? Recognize that to be successful a business has to take risks, but they can be managed and are worth it! Learn how to negotiate! The rent/overhead must be paid whether you have any business or not. If you have fallen into the expensive lease, see if your landlord will negotiate. It does not hurt to ask. Do your homework with regard to location, size of market, costs of doing business (insurance, utilities, employees, taxes, fees, etc). Beware of debt: you could still be paying for inventory years later that is long gone!
Good Luck!
Margaret L Crosby, EA of Pace Consulting Beverly MA Advanced Certified QuickBooks ProAdvisor can assist you in solving your business issues. Certified in QuickBooks Point of Sale software, call 781-738-1669 or go to http://www.paceltd.com for your free report.
Article Source: https://EzineArticles.com/expert/Margaret_L_Crosby/1385447
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