Chapter 1: Getting Started
The decision to start a small business is the first step in a long process. Many small
business owners (SBO) begin their quest with the idea that in order to become wealthy
and free of the corporate structure, you must work for yourself. As pointed out by
Michael Gerber in his book, The E ? Myth Revisited, a fatal assumption is that those who
do the technical work understand the work necessary to run the business. As an
individual begins to explore the idea of becoming a SBO it is critically important to
remember the above point.
It is important that you first consider whether or not you have the necessary reasons
and skills to start a small business. To start, why are you considering starting a business?
There are a number of different reasons which range from, wanting to be your own boss,
looking for flexibility in your schedule, increasing your income, building something that
you can call your own or being bored with your current line of work. There are not really
any wrong reasons for wanting to start your own business except if your only focus is
money.
Chapter 3: Business Planning
"One of the more difficult aspects of building a successful business is implementation.
Sticking to your plan is important but that plan needs to be achievable and measureable.
Setting grandiose goals is great but the chance of failure is tremendous.
When I was traveling 35 weeks a year there were plenty of times I questioned my
decisions. What helped me stay focused on my business was my ability to truly measure
the difference I made in the lives of those I worked with."
It is important to recognize that the only certainty is change. In developing your plan
and then executing, do not be concerned about certainty because it does not exist. All too
often people try to account for every variable. Well, it?s not possible. You have to avoid
analysis paralysis. In operating a business, focus on clarity and be flexible in order to
deal with the only certainty, change.
Your business plan should include vision and mission statements, cost projections, revenue projections and return on investment calculations. The book includes net present value calculations and stresses the importance of time value of money.
Chapter 4: Consider Opportunities and Risks to Success
In performing the SWOT analysis, make sure that you evaluate as much information as possible and do not discount the value of any data. Your strengths and weaknesses should be focused internally while opportunities and threats should focus on external forces. After performing your SWOT, consider having someone review your findings.
Chapter 7: Raising Capital
One of the primary contributors to small business failure is the lack of capital! The
start-up businesses are not able to generate a sufficient amount of revenue to cover
expenses quickly enough. Because of this, it is important that entrepreneurs be prepared
to raise capital.
A common theme among small business owners is that they have little money in the
bank, just a dream, and feel that nobody will loan them money. In reality, there are a
number of programs, both private and governmental, that are in place to provide capital
to small business. Approximately 95% of businesses are eligible for assistance from the
Small Business Administration (SBA).
In finding sources of capital, there are four primary choices to explore:
1. Personal Savings
2. Relatives and Friends
3. Credit Unions and Banks
4. Angel and Venture Capitalist
Chapter 10: Retaining Staff - A Key to Success
It is estimated that about 75% of turnover is the result of a lack of motivation or
interest. A business owner cannot afford to have high turnover. A study by the Coca-
Cola Retailing Research Council found that an employee making $7 per hour cost
approximately $4,000 to replace.
You should establish a reward system for your employees. If your business achieves
certain levels, then your employees will benefit. You must also tie the reward system
into their individual contribution. This can be accomplished by conducting performance
appraisals. The performance appraisals should be as objective as possible with some
subjective aspects.
