So You Want to…Start your own business
Wendy Eustace is referred by successful professionals, executives and entrepreneurs as an excellent coach and facilitator, who makes a lasting difference in the lives of her clients and colleagues.
For more than 20 years she has developed programs for, coached and been an entrepreneur. In fact, most of her friends are or have been entrepreneurs. Entrepreneurs are an interesting breed.
Is your idea a great hobby or a feasible business? How do you really know? Wendy has many clients come to her with an exciting idea that made sense to them. However, it’s important to do some research, crunch numbers and talk to people with knowledge of in that field that will be honest with you. Is this a hobby or a great business idea?
A lovely lady in her 50s came in with a hat she had made. It was beautiful, well constructed and eye catching. When Wendy asked how many could she make in a day, how much she was going to charge and how much did the materials cost, it became obvious to Wendy that this was a great hobby. It was sad to learn that the woman had recently lost her husband, needed to bring in more income and felt this was her answer. Wendy calculated the numbers and put it in front of her to help her see why this was a hobby. The cost in time and materials was so high, that making a profit would have required her to charge over $200 for each hat. The hat lady could only make one every day or two and she started to understand. It was tough to deliver this message. Wendy felt that it would have been cruel as a trusted advisor, not to point it out. It seemed she owed this lady an opinion. Why waste valuable time and money when a year or two later she would come to the same conclusion; this was a hobby.
If you’ve watched Dragons’ Den, you see how passionate entrepreneurs can be about a scheme that might look ridiculous to you. At the Business Advisory Centre, Wendy interviewed potential entrepreneurs and had them bring us information to support their idea. Then as advisors, her group “pitched” the candidates they were convinced had a viable idea to a round table of experienced business people and colleagues. After a process of elimination, 12 to 15 new entrepreneurs were selected to go through a two week mini MBA. Then these budding business owners were supported for a year. They were obliged to create a business plan, present it to bankers, accountants and respected business leaders. Each month a profit and loss statement was sent to their advisor and was part of a discussion on their progress, challenges and future vision.
All of the advisors had operated successful businesses ranging from banking, hospitality, and retail, to accounting and consulting. Each of the group facilitated a couple of days of the workshops so that they had some idea of the people who were going to be running the businesses they supported.
Feasibility isn’t just about the business concept. At least as important – and arguably more important – is ensuring you are the right person to operate this kind of business. Even if the answer is yes, and your concept is viable, consider that you need to be aware of your own strengths and weaknesses. In the beginning it may not be feasible to hire those that can do, what you really don’t do well or enjoy. You need to be aware of your soft spots. For example, Wendy was very successful at an early age in taking floundering restaurants and turning them around. However, she knew that her interest in administration was minimal. While she learned how to do all of the administrative functions, she built in checks and balances to ensure she didn’t miss details. Wendy also trained her assistant to do all the paperwork to ensure they could back her up and provided another set of eyes. Who can provide that back up for you? Do you have a coach, mentor or advisor? Every business has success indicators. What is going to indicate whether you are on track or off track?
Are you excited about starting a business? Then please talk to someone who can be objective, kind and has expertise in the type of business you want to start. Next, do some research into your idea; ask questions of experienced business owners, go online to research and seek a variety of informed opinions.
Probably best not to ask Cousin Fred who has many opinions on a variety of topics and little or no background or success in your chosen field. First ensure that your idea is sound. Next make sure you are a good fit for this type of business.
By Mark Borkowski
Mark Borkowski is president of Mercantile Mergers & Acquisitions Corp. Mercantile specializes in the sale of mid market companies. He can be contacted at email@example.com or www.mercantilemergersacquisitons.com