Step One:

To begin, take a piece of paper, a pen or pencil, or open a word processing document and start listing all or your skills and talents. What are you good at? What do you enjoy doing? What skills have you learned throughout your life? And most importantly, what are your passions?

It is important to be objective because often we don’t give ourselves credit for the skills and talents we have. We just assume that if we can do it everyone can. That is definitely not the case. If you are having problems doing this ask family members, coworkers or friends to tell you what your skills and talents are. We are seen much differently by others than we see ourselves.

Once you have determined what your strengths are, it is important to truthfully identify your weaknesses. We all hate to admit we are not good at something, but when it comes to running a business, it is critical for everyone to know what they are good at and where they need some help. No one can be good at everything, so admitting a weakness has no relevance to whether you will be successful or not. In fact, by admitting and accepting your weaknesses you can proactively find alternative solutions so you can focus on your strengths.

Step Two:

How much time will you have to devote to your new business? This is where many people make mistakes. They are overly optimistic about how much free time they have to devote to the business. Unfortunately, life often gets in the way eating away valuable time. The amount of time you will have available will impact the type of business you choose.

A very good method to accurately determine how much time you will have available is to track how you spend your time. Choose days that are representative of your life, not days that are unusual. You will want to do this for at least a week so that you can document but weekdays and weekends. You may also want to track your time during different seasons. For example, in the fall your kids may be in school activities that require you to drive them around, but in the spring they have no activities or fewer activities leaving you more free time.

The time spent watching television is one area where people find large chunks of time to build their business. I know most people enjoy watching television, but there is no true benefit received, besides some relaxation. Think of how much you could accomplish towards building your business instead of watching TV.

As you are planning out your work schedule it is important to remember time with friends and family. One of the primary reasons people start a business is to have a better life, not to be a slave to the business. Granted, you need to diligently work at your business, but don’t forget to enjoy life along the way.

Step Three:

Now it is time to decide how you are going to finance your business. The best way to determine how much money you will need to start your business is to create a business plan and cash flow summary. Be realistic, typically businesses exceed their projected start up costs by at least 25% or more. It’s better to be cautious early on then to have the stress of running out of money later.

Something else to consider is your risk tolerance? Are you pretty cautious with your money and are looking for a lower rate of return for your business but a higher chance of success? Or, are you ready to take more risk for a higher rate of return? That is a personal decision and neither is right or wrong, it just depends on you.

Where are you going to get your start-up money? Are you going to finance your business from savings or from your current job, or do you plan on borrowing money from a bank, friends or family members? Or maybe you are taking on a partner and giving them a percentage of the company in exchange for start-up capital. If you are borrowing money from friends or family it is a good idea to have the agreement in writing in case there are any discrepancies in the future. It is much better to lay out the agreement in the beginning then to try to piece it together after there has been a misunderstanding and feelings are hurt.

Step Four:

The next step is to do some research. Take a look at the types of businesses that match your skills or talents. Take some time to research the market for these products or services. Is the market young or mature? Is it under or over developed? Are there changes that can be made to existing businesses to improve the market or service? Don’t be afraid to be creative, but do market tests before committing to something entirely new.

This is also the time for your due diligence. If you are looking at getting into an existing business it is critical to your success that you dig into the business opportunities to determine whether they are legal, the businesses are strong, the products are high quality, and there is plenty of support and training. Before making any final decisions it is always a good idea to meet with your accountant and/or attorney to see if they see any red flags.

Step Five:

Now that you have made your decision it is time to get busy. This time is both exciting and overwhelming. If you have never owned your own business it is a good idea to search out some good books on starting businesses. Many times you can find books written specifically for your industry.

Additionally, many cities have a program called SCORE (www.score.org) which provides free and confidential business advising. Another place to find good information to help your business succeed is your local Chamber of Commerce. Joining the Chamber may or may not be a good choice for your business, but typically Chamber’s of Commerce have many resources available to members and non-members.

Step Six:

Enjoy!

Finding the right business for you. Some of you may know exactly what kind of business you want to start, or you may have already started it. Others may have an intense desire to start a business, but they don’t know what type of business. Deciding what your business will be is a critical step in your journey to business and financial success.

To begin, take a piece of paper, a pen or pencil, or open a word processing document and start listing all or your skills and talents. What are you good at? What do you enjoy doing? What skills have you learned throughout your life? And most importantly, what are your passions?

It is important to be objective because often we don’t give ourselves credit for the skills and talents we have. We just assume that if we can do it everyone can. That is definitely not the case. If you are having problems doing this ask family members, coworkers or friends to tell you what your skills and talents are. We are seen much differently by others than we see ourselves.

Once you have determined what your strengths are, it is important to truthfully identify your weaknesses. We all hate to admit we are not good at something, but when it comes to running a business, it is critical for everyone to know what they are good at and where they need some help. No one can be good at everything, so admitting a weakness has no relevance to whether you will be successful or not. In fact, by admitting and accepting your weaknesses you can proactively find alternative solutions to handle that area and you can focus on your strengths.

Something else to consider is your risk tolerance? Are you pretty cautious with your money and are looking for a lower rate of return for your business but a higher chance of success? Or, are you ready to take more risk for a higher rate of return? That is a personal decision and neither is right or wrong, it just depends on you.

It is important at this point to honestly determine how you are going to finance your new business. Are you going to finance your business from savings or from your current salary, or do you plan on borrowing money from a bank, friends or family members? Or maybe you are taking on a partner, giving them a percentage of the company in exchange for start-up capital.

How much money do you have to invest? I guarantee what you estimate you will need to start your business will be at least 25% short if not more. So, when determining how much money you need be sure to overestimate. If you are borrowing money from friends or family it is a good idea to have the agreement in writing in case there are any discrepancies in the future. It is much better to lay out the agreement in the beginning than to try to piece it together after there has been a misunderstanding and feelings are hurt.

The next step is to do some research. Take a look at the types of businesses that match your skills or talents. Take some time to research the market for these products or services. Is the market young or mature? Is it under or over developed? Are there changes that can be made to existing businesses to improve the market or service? Don’t be afraid to be creative, but do market tests before committing to something entirely new.

You can also look at prepackaged business or franchises. For example if you want to invest at least $1 or $2+ million, you could open a fast food restaurant and everything would be laid out for you. Of course you would have to find a location, have the building either built or fit out, hire employees, learn how to run the business per the franchise rules, etc.

If you decide to open a shop or restaurant on your own you will have the same issues as above, plus you will be completely on your own in regards to purchasing merchandise, marketing, policies and procedures, hiring employees, etc. This can be a very rewarding experience, but make sure you have the capital, a great idea, stamina, and business acumen to be successful.

If you are looking for something smaller, there are many opportunities in direct sales and multi-level marketing (also known as MLM or network marketing) that can generate a good income if you devote the time necessary. These are generally a small, home based business which you can run out of a bedroom or den in your house. Additionally, many of these opportunities are now internet based business opportunities so there are no meetings to go to or inventory to manage. This is nice because it cuts down drastically on your overhead costs and gives you flexibility on how you spend your time.

Unfortunately, these businesses have gotten a bad rap lately, not due to the businesses themselves, but because too many people were promising great income generation without having to lift a finger. Well, we all know that work is required to be successful in business. If you are dedicated and committed to building these opportunities then you will prosper.

Finally, be sure to consult with your attorney and accountant as you set up your new business. They will be able to make sure everything is set up correctly and you are off to a great start!