In spite of the bad economy, apparently entrepreneurship is alive and well in America. According to the nonprofit Ewing Marion Kaufman Foundation’s annual index of entrepreneurial activity, the pace of new business creation in 2009 rose to it’s highest level since the index began 14 years ago.
Successful entrepreneur and millionaire, Dal LaMagna, recommends that one solution for the millions of unemployed and underemployed people is to start a business. In his new book, “Raising Eyebrows: A Failed Entrepreneur Finally Gets It Right”, LaMagna shares profound lessons he learned from numerous business failures before he started Tweezerman, a global beauty tools company, with a scant $500 and walked away with millions.
LaMagna maintains that starting really small in business, sometimes referred to as bootstrapping could actually help you succeed. He feels that the less money you have, the less likely you are to make common new business mistakes. Many new business owners who start off well financed have a tendency to accumulate too much debt, create too much overhead and focus so much on the big picture that they lose sight of the day-to-day goal, which is to consistently make a profit.
By following LaMagna’s advice, millions of unemployed and underemployed people can start a successful business if they have just $500 in their savings account. However, LaMagna recommends following these 7 principles:
Tailor it to you.
Start a business that you love. Some people just love antiquing. Others love cars, fishing or cooking. LaMagna suggests thinking about what impact pursuing your passion would have on your lifestyle. How might it affect the way you spend your days or where you would have to live? He also suggests that you consider whether or not you want to work around people or alone; what hours you would have to work, how much time you would have to spend on the phone, indoors or outdoors, in front of a computer, or out in the field. This kind of analysis can help you avoid businesses that would keep you from having your preferred lifestyle.
It may sound simplistic, but refrain from spending money you don’t have. Don’t purchase anything unless you need it. This means making sacrifices and foregoing certain conveniences. Make sure that you put the money you make right back into the business.
Record every expense.
Keep a record of every penny you spend. Whether it’s the dollar you gave to the homeless guy on the way to meet a prospective client to the new tie you bought to look professional. The key to launching a successful business is to keep expenses under control and fully accounted for.
Keep a monthly record of profit-loss.
Complete a monthly profit and loss statement for the first two years after you start the business. This kind of focus will help you get a handle on where your business is going, what needs be improved, and why it fluctuates.
Find free stuff.
If you are willing to invest the time, you can find many of the items you need to start and run your small business at no charge or next to nothing. There are deals galore these days. Try thrift shops for office furniture or office supplies. Go online and check out freecycle.com. Ask friends or relatives if they have old computers, printers or other office supplies. As an example, a hair accessories crafter gets all her leather for free from a backpack manufacturer that throws all their leather scraps away.
Write down agreements.
As the owner of a small business, it can be tempting to consummate agreements with a “handshake”. Your clients may also resist signing agreements. However, you must develop the processes and procedures of a larger company and that means you need to have all agreements in writing.
Keep it simple.
When LaMagna first founded Tweezerman, he focused only on selling tweezers to cosmetic counters, one store at a time. At one point, he received an offer to sell industrial tweezers to electronics manufacturers. However, he kept the focus on what he was already doing well. He recommends not diluting your efforts until you have turned a large profit over a consistent period of time.
What about you?
So what is you big idea, your dream? And what are you doing about it? There are many resources that can help you achieve your dream. SCORE Association is a great resource that provides training through low-cost workshops and free one-on-one mentoring for as long as you need their help. There are approximately 14,000 volunteer counselors nationwide in thousands of locations standing by, ready to help you.
Small Business Administration (SBA) is another great resource. If you poke around their website you will find a vast amount of help in the form of valuable information, links to other resources, instructional videos and a whole lot more.
I would be negligent if I didn’t also mention the new and fastest growing Chamber of Commerce in America, MainStreetChamber™. New chapters are springing up each month all across the country. If there is not a chapter yet in
Posted by: Mike Clough