Thinking of starting a business in 2018? Read this first
Original article Published in SiouxFalls.Business News by Jodi Schwan
Potential entrepreneurs, is this the year you go for it?
If you’re entering 2018 with business ownership as your New Year’s resolution, the Zeal Center for Entrepreneurship is the place to start.
Zeal’s Ryan Oines has been in your shoes many times. A successful entrepreneur who now helps guide others, we asked him what you need to know before launching.
What are some questions potential entrepreneurs should ask themselves before deciding to start a business?
The basic questions are easy:
What is your product/service?
Who is your target customer?
Who are your competitors?
What is your differentiation?
How will you make money?
Do you have a personal financial budget?
How will you fund your project?
Do you have an end goal in mind?
However, some of the most valuable questions I’ve had to ask myself are not outlined in a business plan; these are questions that are buried just below the surface of difficult decisions:
Who is your support system?
Who can you turn to as trusted advisers and subject matter experts?
What outlet do you have for stress?
Do you have a mentor?
How do you define success and are you prepared for failure? Sometimes more importantly, are you prepared for success?
Financially, how should potential entrepreneurs be planning? Do most first-year owners find they are able to pay their bills or should have they have funds set aside already?
There are so many ways to start out a new business, and everyone’s situation is different. Ideally, every entrepreneur would be successful enough in the first year to take an income and pay all of their personal bills and have savings set aside for emergencies. However, life happens and not everything falls perfectly into place.
Initially, I recommend evaluating your lifestyle; we are all unique in what our needs are based on our current lifestyle. However, if you are bootstrapping a startup and have fewer resources in the beginning, adaptability and reserve resources can create the opportunity for success by persevering through a lean startup period.
The best scenario is to always have reserve or savings — how much is completely dependent on your risk tolerance and lifestyle. Some entrepreneurs ease into the transition by maintaining a separate job or side gig until certain benchmarks while others jump completely in without much thought to the what-ifs. The most important factor, in my opinion, is being self-aware enough to know your risk tolerance — and always try to have savings.
If those answers still point them toward business ownership, when and how should they approach Zeal?
At Zeal, we strive to be a resource for entrepreneurs. We welcome those who are entertaining an idea or business model as well as those who are running a business but need some help or guidance toward a resource. Our goal at Zeal is to create opportunities for connection and collaboration. We recommend connecting with Zeal at any point within the early stage; our goal is to support the entrepreneur through providing resources and connections that may otherwise be less accessible.
What kind of help are you able to offer entrepreneurs before they actually launch?
Within Zeal, we have many resources for entrepreneurs before they launch. The SBA and SBDC (Small Business Development Center) are located within Zeal and can help with financial modeling and connecting with resources for research and potential funding. Additionally, Zeal has professional partners and entrepreneurs-in-residence that we can connect new entrepreneurs with that can help in strategic planning and any areas they may lack experience or subject matter expertise. Zeal’s network and partners can help with the pre-launch questions and strategy.
What are some common mistakes people make in starting a business?
Wow, big question. It’s difficult, at times, to cultivate a list of common mistakes, but these are some that we see at Zeal:
Not knowing your numbers — good, bad or indifferent, money and the flow of money is the lifeblood of any business. If you are uncomfortable with budgets, cash flow, financial statements, I recommend getting someone to help you, and learn.
Lack of defining your organization’s product or service differentiation in the marketplace.
Under capitalization. Never underestimate the cost of executing something the right way.
Unwillingness to listen to and put into action sound advice.
Lack of a strategic plan. Sounds elementary, but sometimes entrepreneurs are buried under so many of the other components of starting a business that it becomes easy to overlook evaluating the need for a strategic plan.
If there’s one piece of advice you wish you had heard before starting your first business, what would it be?
Be coachable. Many entrepreneurs are experts in their product or service but lack expertise in other areas that are required to be successful in business. One of the difficulties we face on a daily basis is receiving requests for help from entrepreneurs but then watching as the resources available are ignored or rejected. Yes, be coachable.