By Tom Musbach | Yahoo! Small Business Advisor
The New Year often motivates people to make a big change in their work lives. But with the scarcity of new jobs projected to continue into 2012, making a move to become your own boss might be a more worthwhile resolution than in years past.
Of course starting a new business requires a great deal more work than applying for a new job, and the effort usually involves much risk. But great rewards don’t come without risk or great effort.
“There’s never a guarantee for a new product or company,” said Pat Mayfield, executive director of the Golden Gate Business Association in San Francisco. “However, many successful companies, such as General Electric, Motorola, Hewlett-Packard, and Paypal were started during down economies.”
Experts reveal key business-starting tips
Several entrepreneurs who’ve seen success in creating a business shared these important tips for getting started:
1. Start your business while you are still working, if you can. “It takes 18-36 months on average to break even, let alone replace your corporate salary,” said Melinda F. Emerson, the “SmallBizLady” and author of Become Your Own Boss in 12 Months.
2. Have passion for your company and your product. “It will help to get through the bad times and thrill you during the good times,” said Mayfield.
3. Do your homework. “You might have a great idea for a business but success is going to be built on what other people think,” said Gene Fairbrother, lead business advisor for National Association for the Self-Employed. “For any startup it is critical that they do some market research to determine if they can really generate customers who will generate revenues. A common cause for a business to fail is that the person starting the business is in the minority of people who thought it was a good idea.”
4. Only listen to those with experience. “When you decide to become an entrepreneur, you’re likely to run into some opposition,” said Matt Toren, co-author of Small Business, Big Vision.“Unfortunately, the push-back often comes from those whose opinions matter most to you — your family and friends. It will help if you remember to only listen to people who have done what you want to do.”
5. Be passionate about customer service. “People buy from people they like, and in the early stages of a new business with a limited marketing budget, word of mouth is key,” said Rene Shimada Siegel, president and founder of High Tech Connect. “Make every customer feel like they are your only customer. Under-promise and over-deliver. Listen carefully so you can take away their pain. Fix it quickly (for free) if it’s not perfect. They will never forget how you made them feel.”
6. Engage your circle of influence as much as possible. “Your friends, family, employees and acquaintances can be your best marketers and promoters,” said Robb Fleischer, chief operating officer of AMSI Real Estate Services in San Francisco. “You’ll want people close to you who specialize in the aspects of your business that you’re not as passionate about, or requires a different skill-set, such as attorneys and accountants.”
7. Don’t try to raise capital; bootstrap instead. “It is nearly impossible for startups to obtain bank loans,” said Scott Gerber, founder of the Young Entrepreneur Council. “Angels and venture capitalists — and even friends and family in many cases — want to see your business in action and succeeding before forking over a check. Bottom line: Launch a business you can start with the resources you have at your disposal, bootstrap and cut back on anything that isn’t essential, and prove your business works before you seek any investment.”
2012: Year of opportunity?
Most economists expect today’s sluggish economy to continue through the next year, and starting a business in this climate will be risky. A recent Yahoo! Small Business survey found a third of small business owners have not been able to invest to grow their companies due to the recession, and many others shut down.
Nonetheless, some experts say the outlook is positive for new entrepreneurs.
“Bad [economic] times are the best times to start a business because they’re the most likely times when people are open to change and new vendors,” said Emerson.
“Any year is a good year to start a business,” said Adam Toren, the other co-author of Small Business, Big Vision. “Outside forces, like economic conditions and changes in the marketplace, will obviously affect business owners, but they have infinitely more options to respond to those challenges than someone who’s laid off from a job because of them.”
Gerber, who stressed that entrepreneurs are problem solvers, was the most bullish.
“We are in the age of the entrepreneur,” he said. “The new economy has forever changed the social norms of yesteryear, so next year is as good a time as any to join the entrepreneurial revolution.”