With so many people unemployed, underemployed or who may be fired and good jobs so scarce, it makes sense to consider starting or buying your own business. But because of the bad times, you may be scared. The following story about a couple that bought a business during the the Great Depression may be helpful to you. In 1930, Ruth Graves Wakefield and her husband risked their savings to buy the Toll House Inn in Whitman, Mass.
Ruth did the cooking and she served the Inn's guests. One day she was baking chocolate cookies and saw she was out of baking chocolate. In place of that baking chocolate, she grabbed a Nestle semisweet chocolate bar and broke it into pieces assuming the chocolate would melt into her recipe. It didn't. Instead, she had created the 1st chocolate chip cookie and it became a huge hit, making their business an enormous success. When you're in business, you never know when such a great thing could happen to you. A lucky break as happened for the Wakefields or a burst of your creativity and you too could become an enormous success. But is taking the risk of going into business really right for you? Speaking to you as a founder and former CEO of a major company, the following will help you decide:
1) Do you love your business idea enough to risk your time, your reputation and your nest egg in it ? The answer had better be yes because if you don't love it, you won't stick with it and potentially all that you will have invested will be lost. This is a question you must weigh from the heart. In 1974, before I started what later became a major computer leasing company, I sat in a botanic garden with pad and pen weighing this very question.
2) Is there a market for your product or service? How do you find out? Talk to potential customers and ask them under what circumstances they would do business with you and what price they would be willing to pay. In 1974, I knew many computer users and discussed my prospective computer leasing company with them. If you don't have those connections, run some advertising to attract those potential customers. In the late 1990's when I had another business idea, I ran an ad and after speaking with potential customers, knew it was not a good idea and saved my time and money by not pursuing it further.
3) What are the costs to start your business and when will it make money? You don't need a computer or a CPA to do this unless you must raise funding. Do as I did in 1974 at that botanical garden. On a sheet of paper write down all the expenses you will incur and over what time period. Then project when sales will kick in. Be very conservative. Expenses in real life are often far more than expected and sales usually take longer than planned.
4) Is there an easier, less risky approach? Yes. For example, if you want to repair computers or cars, find out what the opportunities are by speaking with those already in the field. Maybe they would even hire you part-time and if that goes well, employ you full-time eventually making you a partner. You can also buy an established franchise, such as a Subway or a Taco Bell, if you have the savings to make the down payment but before you do, speak with those who bought that franchise to learn if they are pleased with their investment and why.
Dick
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