Most people dream of being their own boss, but do you really have what it takes? Stephanie AuWerter, Editor of SmartMoney.com, discusses the steps to starting your own business.
A lot of people love the idea of starting their own business, but realistically, there are certain personality traits you need to possess before you can be successful. "You need to be prepared for the business to take twice as long as you expect in order to turn a profit," says AuWerter. "You need to expect to work more hours, not less hours... If you're the type of person that really loses sleep at night when things aren't running smoothly, then this might not be the right path for you."
Also, find out if other people like your business ideas. "Become a real expert in the industry that you're targeting," says AuWerter. "You want to be able to articulate exactly how your business is going to be different and how it's going to be better." Try doing a test run of your business before you invest your life savings. You won't know if your idea is any good until you try it out.
Take note of your finances, too. "A lot of entrepreneurs start off with a combination of savings, a loan and possibly taking outside investors," says AuWerter. Also consider "angel investors". These are wealthy individuals who are interested in investing in private businesses.
Finally, come up with a reliable business plan - and stick to it! Put your idea down on paper, including timelines, investment strategies, customer target numbers and any other important details. "You want it to be as specific as possible," says AuWerter. "Then, once you've written this document up, be prepared to revise it repeatedly." Your plans can - and probably will - change over time.
Once you've got everything planned out, get out there and market your idea like crazy. "You need to be networking constantly," says AuWerter. Go to trade shows, join any industry associations and get the word out around town. Don't underestimate the power of "word of mouth" advertising either.
If you're looking for extra help, visit www.SMSmallBiz.com, Smart Money's new website for small business owners, or www.SmartMoney.com for additional advice.
By Erin Petrun
Copyright 2008 CBS. All rights reserved.