This chapter helps you determine whether you have chosen the “right” business for
you—one that you know, like and will work hard for and that makes economic
sense.
Most experienced businesspeople complete several steps as a rough and
ready template to decide whether to complete a plan. If your business passes all
these steps with flying colors, it means it’s a good idea to write a full
business plan (although it doesn’t guarantee success). On the other hand, if
your proposal doesn’t pass, you’ll probably want to modify or change your plans
altogether. If you’re like most people, chances are your business will pass
some tests easily and fail some of the others. Antoinette faces just that
problem in this chapter. Pay careful attention to how she approaches that
dilemma; her method of proceeding may help you in your decision.
Know Your Business
One of the most common questions people ask
me is this: What business should I start? My answer is always the same—start a
venture that you know intimately already. I don’t believe any business exists
that is so foolproof that anyone can enter and make a sure profit. On the other
hand, a skilled, dedicated owner often can make a venture successful when
others have failed. Remember, your potential customers will exchange their
money only for the conviction that you are giving them their money’s worth. And
that means you’ll need to know what you’re doing. While this point should
appear obvious, sadly—it isn’t. Many people enter businesses they know little
or nothing about.
I did it once myself. I opened an automobile tune-up shop at
a time when, seemingly, they couldn’t miss. I knew a good deal about running a
small business, had a personality well suited for it, and could borrow enough
money to begin. The end of what turned out to be a very sad story is that it
took me two years and $30,000 to get rid of the business. Why? Because in my
hurry to make a profit, I overlooked several crucial facts. The most important
of these was that I knew virtually nothing about cars and I didn’t really want
to learn.
Not only was I unable to roll up my sleeves and pitch in when it was
needed, I didn’t even know enough to properly hire and supervise mechanics. In
short, I made a classic mistake—I started a business in a “hot” field because
someone was foolish enough to lend me the money. How can you apply my lesson to
your situation? Let’s say you’ve heard pasta
shops make lots of money and you want to start one. First, if at all possible, get a job working in one, even if you work for free. Learn everything you can about every aspect of the business. After a few months, you should be an expert in every aspect of pasta making, from mixing eggs and flour, flattening the dough, and slicing it into strips. Ask yourself whether you enjoy the work and whether you are good at it. If you answer “Yes,” go on to the second important question: Is the business a potential moneymaker? You should have a pretty good answer to this question after working in the field for a few months. If you’re unable to find employment in the pasta business, make a tour of delicatessens and shops that make their own pasta.
Interview the owners. To get reliable answers, it’s best to do this in a different locale from the one in which you plan to locate. Small business owners are often quite willing to share their knowledge once they are sure you will not compete with them. I remember reading a management philosophy that said that a good manager doesn’t have to know every job, only how to get other people to do them. That approach may work well in a large corporation, but for a small business, it’s dangerously naive. In short, don’t start your small venture until you know it from the ground up. I mean this literally. If you’re opening a print shop, you should be able to run the presses and do paste-up and layout, as well as keep a coherent set of books. If it’s your elegant little restaurant and the food isn’t perfect, you’re the one who either improves it in a hurry or goes broke. If you don’t like getting your hands dirty, choose a clean business.
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