Idea Exchange: Advice For Young Entrepreneurs
by nicoj, Community Moderator
- Created: June 1, 2011, 4:29 pm
- Updated: June 1, 2011, 5:01 pm
Getting started as an entrepreneur can be an exciting, and at times scary, thought for young people. First-time business owners face many challenges on the path to becoming successful, such as obtaining credit, complying with regulations, and building a customer base.
In May, we asked business owners in the SBA community for suggestions they wish someone would have given them before starting a business. Here are some of their tips:
Develop a solid business plan
johnhenning suggested having both a business plan and procedures set up before starting or purchasing a business: “systems and processes are important as well as a proven business model.”
wgalkin also stressed the importance of having a good business plan, saying: “The best advice I can give is to develop a detailed business plan. This can be a lot of work, but it serves to clarify and scope out many issues and also allows you to assess the costs.”
Focus on marketing
rcaldwell, the owner of an appliance repair shop in Idaho, suggested having a dedicated marketing strategy to attract customers, rather than buying ads and hoping to lure business: “Do not think that just because you buy yourself a yellow-page ad that the public will come flocking to your business.” Rcaldwell also said that making your advertisements “quick and to the point” will help you effectively communicate a product to your potential customers.
wgalkin recommended accounting for significant marketing costs in the initial phase of a company.
Be strategic about financing
Ralph Alterowitz, the President of a Maryland venture capital consultancy, suggested getting a good sense of your financing needs, then taking the time to plan the best way to raise capital. Mr. Alterowitz shared his thoughts about the importance of having a good financing strategy: “After building a grounds-up budget—determining how much money is needed for staff, facilities, equipment, supplies and materials, testing, development and marketing—the entrepreneur needs to determine the fastest, easiest and least costly way to raise the money needed.”
Distinguish yourself from competitors
pfleet suggested trying to find ways to do business differently than rivals, in order to distinguish the business in a fundamental way.
Prepare in other ways
JRDUNDON had three pieces of advice for young entrepreneurs deciding what to do before they start a venture: carefully choosing what type of entity would be best; learning the tax implications of decisions; and being willing to ask others for help.
Carrotandstick recommended getting information on the success and failure rates of similar businesses in the area before pursuing an idea: “If the last 7 pizza shop startups went bust, find out why before you spend any money on dough.”
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