By Ford R. Myers
President, Career Potential, LLC
In considering the self-employment option, there are two main questions to ask yourself:
- Is self-employment potentially right for you?
- If so, which of the four paths to business ownership would be best for you?
You have two main career paths: Self Employment vs. “Getting a Job”
Is Business Ownership Right for You?
Three questions to help you discover an answer:
- Why are you exploring entrepreneurial alternatives at this time?
- Rate your desire/motivation/commitment to have your own business, 1 to 10 (10 being the highest)
- If you could find the ideal job OR own your ideal business, which would you choose TODAY?
Re-focus on the first question. You must understand your core motivators:
– What’s your WHY?
(Lifestyle, income, image/prestige, leave a legacy, control, build equity, self-expression, independence, make a difference, passionate interest, etc.??)
– Unless you identify and hold onto your deepest need and desire, your chances of success are not strong.
There are Four Paths to Business Ownership:
- Become a Consultant
- Buy an Existing Business
- Start a New Business
- Buy a Franchise
Become a Consultant – unique considerations
What markets will you serve?
– What industries, market segments and departments might need your services
– What are some job titles of potential buyers
– What are the needs or problems of your target market
– How do you know there will be a demand for your services
What services will you offer?
– List three specific services or resources you could offer to help organizations solve their problems
– How will your consulting services make a tangible difference to client organizations
– What results do you expect to deliver
Who will be your competition?
– Find three consultants or consulting firms in your area who offer services similar to yours
– What is their reputation, history, expertise
– How will your services compare to theirs
– What will be your competitive advantage over them
– Will you have the chance to work in cooperation with them
How will you price your services?
– How much revenue will you need to generate first year
– What on-going costs will you need to cover as “overhead”
– What is the “going rate” for services like yours
– How many days must you work annually to reach your goals
– How long might a typical assignment last
How will you market and sell your services?
– How many prospects/clients would pay for your services right now
– How will you identify and qualify additional prospects
– How will you develop strategies to promote your services
– What system do you have for the selling process
Buy an Existing Business – unique considerations
What type of business do you want to buy?
– What products or services will you be selling
– What kind of image do you want for the business
– Will you serve consumers or other businesses
– What size company would you like to operate
– Where do you want the business to be located
– Will you have employees, independent contractors, or both
– What kind of revenue and profits will the company generate
How do you envision your own role?
– What will be your primary tasks day-to-day
– What will you delegate; how and to whom
– How many hours per week will you work, and when
– What do you expect from the seller, during and after the sale
How will you finance the purchase?
– How much can you afford to invest of your own liquid funds
– Will you be borrowing, and how much
– Is your investment range specific and realistic
– Where will you get the money, and from what source, at what terms
– Do you have enough money to carry you through a reasonable “ramping-up” period
– Do you have a financial “cushion” just in case
What will you expect of the seller?
– What business documentation will you need from the seller
– How will you carry-over the company ’s reputation and “good will”
– Will the seller work at the company through the transition period
– What training / support will you need from the seller; for how long
– Will the seller be involved in the financing of your purchase
– Will the seller be available for “emergency” questions and issues
Start a New Business – unique considerations
What market will the business serve?
– What industry will your business be in
– Will you be creating consumer demand, or meeting a need
– What are the specific needs of this target market
– Have you tested your product to be sure there is a market
– What kinds of customers would you like to be working with
– Where will your business be located
What products or services will you offer?
– Will you be providing services or products, or both
– At what price will you sell your products and services
– What will be the benefits to your customers
– What will be unique about your products or services
Who will be your competition?
– Why would a customer choose you over their current supplier
– Find three companies you will be competing against
– What kind of reputation do they have
– What will be your competitive advantage
How will you market and sell your products or services?
– How will potential customers find out you exist
– What strategies will you use to promote the business
– What sales volume and profit margins will you need to succeed
– What selling system will you use to become successful
How will you finance the business?
– How much investment will it take for the initial start-up
– What will be the primary operating costs
– How much will you need to keep in reserve
– What portion will need to be financed, and how
Buy a Franchise – unique considerations
What type of business do you want to be in?
– Retail, Food, Manufacturing, Services, Distribution, etc.
– What specific products or services will you offer
– What kind of image do you want for your franchise business
– Will your customer base be consumer or business
– What size business would you like to operate
– Will you have employees or contractors; both or neither
– What kind of revenues and profits will the business generate
– Where will your business be located; one or more units
How do you envision your own role?
– How will your work in the franchise match your lifestyle needs
– What tasks do you foresee doing on a daily basis
– How many hours do you plan to work and when
– What work will you delegate and to whom
– How will your role change over time
What will you expect from the franchisor?
– What is most important to you about the franchise company
– What is the quality of their reputation, brand name, products
– What will you need to learn from the Franchisor to create success
– What training and on-going support do they offer
– What is the company’s financial structure and royalty fee
– What will the Franchisor do to help market and grow your business
– Will you feel comfortable having an on-going relationship with them
How will you finance the purchase?
– How much must be paid up-front in cash vs. financed
– How much will the total investment be, and with what terms
– Where will you get the money to buy your franchise
– Will the Franchisor help with financing
– Will you be comfortable with the franchise’s royalty payments
Your Qualifications for Owning a Business
The main categories of ability include:
- Marketing and Sales
- Financial Management
- Operations and Administration
- Human Resources
- General Management
For each category above, answer these questions:
- What results will the business require each year to become and remain successful?
- What education, training or experience do you have to indicate that you will be capable of producing desired results?
- Are you personally interested in, and willing to do, the required tasks?
- If you do not plan to lead specific parts of the business, who will run them, and how much will you need to pay those people?
Do you feel certain or doubtful about self-employment?
– Where are you on the continuum
– Is business ownership the right choice for you
– Your reactions are normal at this point
What are the major challenges or obstacles you will face?
– First challenge
– Second challenge
– Third challenge
What are your biggest concerns or fears?
– Your own abilities
– Making a mistake
– Funding and financing
– Selling and marketing
– Possibility of failure
– Inadequate support system
What questions or issues do you still have?
– If business ownership is NOT for you, what other path will you take
– What information do you still need to make your decisions
– What resources will you leverage to move forward
– What support and advice can you take advantage of
– Other questions or issues
– How will you get answers and resolution
There are answers to your questions, and there is help to get you through the transition effectively!
Five More Questions to Consider:
- Two years from now, the qualities that I want most in my work/career are:
- Will I have those qualities in my work if I continue doing what I’ve been doing?
- If not, what changes must I make in order to make these qualities a reality?
- Could business ownership or franchising help me create these desired qualities in my work/career? How?
- If interested in business ownership, the next steps I should take are (include approx. dates for completion):
What are Your “Pros and Cons” for each option? (Answer the questions below)
1. Become a Consultant
2. Buy an Existing Business
3. Start a New Business
4. Buy a Franchise
In reviewing this brief list of “pros and cons” for each of the four options, which choice seems best for you right now? Why?
Online Resources to Explore:
Small Business Knowledge Base
The New Way to Work
U.S. Chamber of Commerce
Online Resources for Business Ideas
Solutions for Growing Businesses
Resources for Entrepreneurs
Counselors to Small Businesses
Resources for Home-Based Business (business letters)
Fast Company Magazine
Yahoo Small Business
Business Owners’ Idea Café
Red Herring Magazine
Small Business Administration
Start-Up Journal (Wall Street Journal)
Tanned Feet (Entrepreneur Help Page)