THERE ARE COUNTLESS opportunities to run into brick walls in the exciting world of entrepreneurship. Small businesses owned by blacks average annual revenues of $52,000 while white-owned businesses average $193,000 annually, according to the latest Census Bureau data. But statistics like these will not daunt you, the true entrepreneur. You know that by avoiding the typical mistakes that can kill a business in its embryonic stages, you'll increase your chances of going the distance.
According to small business consultants like McKinley Howell, assistant regional director of the Rutgers Small Business Development Center (SBDC) in Newark, New Jersey, the top three small business killers are inadequate capital, inability to find clients or customers, and lack of good management skills. Also high on the list are a lack of realism about one's own abilities and not having the right information to work with.
Fortunately, with the Internet at your disposal, you can now get the scoop on everything from which industries and opportunities are hot to where to locate funding sources to how to find (or fire) an employee. In fact, there's so much information available in books, videotapes, seminars, business magazines such as BLACK ENTERPRISE and Web sites that you can find yourself spending too much time on research and consultation and not enough time actually starting your business.
To help protect you from information overload, we've compiled the five most important things you need to know before embarking on your entrepreneurial journey.
Know yourself and what you want to accomplish. Ask yourself if you have what it takes to start and operate a business. "Consider whether you like dealing with people, enjoy the intricacies of making or selling the product or service, and get satisfaction from satisfying your customers before going into business," says Ron Blackstone, president of R.J.B. Properties Inc. in Homewood, Illinois, a janitorial, food and security guard service.
Blackstone, who was primarily motivated as a kid to start a business because "I always wanted to be the guy to call the shots," cautions that starting a business can be stressful. "Remember that you're putting your retirement plan, vacation--all the comforts of your life--on the line. It can turn your lifestyle upside down."
Another success factor is having the technical knowledge and business management skills to do a better job than your competitors, says Julius Morgan, coordinator of entrepreneurial development and training at the Milwaukee Enterprise Center.
In fact, entrepreneurs are often called gamblers, which is somewhat of a misnomer. It may appear that they're gambling, but the odds are based on informed instinct and a deep conviction that through their effort they can influence the outcome. This confidence stems from first having proven your management skills elsewhere (e.g., work, community, church), being familiar with the industry you're entering and possessing enough technical know-how to understand what it takes to deliver a superior product or service.
"I use one word to describe the entire process of starting a business--AIM, which stands for Attitude, Innovation and Management," says Edith McCloud, director of the Howard University Small Business Development Center in Washington, D.C. "Attitude is so often overlooked. You should ask yourself if you have not only the skills, but the right attitude about the amount of work, determination and perseverance for the 18-hour days it takes to start and operate a business. It's not something everyone can do."
Innovation refers to infusing creative thinking into your product or service and the way you market it. "You don't have to have a new product, but your marketing strategy should be innovative enough to create a niche," she explains.
The "M" in McCloud's acronym for success refers to management and having...