Effective Strategies E-Zine

I just spent spring break with my daughter. She graduates from high school this year and she is an only child. I have somewhat built my business in a vacuum free of some challenges that other people face: my husband is supportive of my entrepreneurial spirit, we are mostly debt-free, and my daughter doesn’t live with me full time. I started my business in 2003 after she decided to exercise her option to live with her dad as many children of divorce do. This week has been a reality check for me since I had the typical mom responsibilities once again. I love my business and my family but balancing the two has been a mental, emotional, and physical challenge this week. The additional responsibilities at times left me feeling guilty when the demands of the business pulled me away from some of the family time I planned to carve out and devote to my daughter. When you run a small business, it affects the entire family.

Just this week, an episode of Dr. Phil featured a couple of moms with small children who wanted to open their own clothing boutique. They thought it would be fun to implement the concept they developed, and it would give them flexibility to take their kids work with them. They also liked the idea of being able to take off any time they wanted. Dr. Phil arranged for them to spend a day working in a boutique doing activities a business owner would do — meet with merchandise suppliers, do normal maintenance details, prepare new merchandise arrivals to go out on the floor, take care of customers, fill in for employees that call in sick, etc. To top it off, the production team brought the moms’ small children in later in the day to spend time in the store as well. As you can imagine, it was a major reality check to perform the planned day-to-day chores as well as handle the unexpected tasks.

I grew up in a small business family. From the time I was six, my parents ran businesses that included raising poodles, managing and playing in a dance band, providing organ and musical instrument repair, and running a large-scale computer service business. Even when Dad had a computer store, we always had a home office where mom handled the day-to-day office management responsibilities. We had multiple phone lines, a fax machine, daily UPS shipments, phone answering duty, and daily rounds of errands to run to exciting destinations such as the bank and the post office. During the summer, mom would run us by the store to get something we needed or take us to lunch after we finished the errands. When she picked us up at school, we often ran errands then. I was very aware of what it took to run a business because I was immersed in it. I didn’t realize what a great education it was.

I have spent the last five years as a SCORE (Service Corps of Retired Executives) counselor. The organization provides free small business counseling and I meet many potential entrepreneurs in my volunteer role. Numerous times, I’ve heard people say, “I want to start my own business so I can spend more time with my children.” I have seen people choose a variety of home-based businesses for the same reason.

Here is the reality — a business in the start-up phase (one to three years average) generally consumes the serious entrepreneur. When you aren’t working 60 or more hours a week, you are thinking about it and talking about it with family or friends. You wake up in the middle of the night with new concepts that could explode your business. Starting a business is a huge undertaking that requires a major amount your attention and time long after the adrenalin and passion run dry.

People often dream of spending more time with their family in their own home. Most are desperate to find some balance between the endless household duties, family needs, and the demands of the company they work for. Running a business from home seems like a natural fit. It seems like you can even save money because you don’t need to pay for day care if you have small children.

This is the first installation of a two-part article on considerations for a business start-up. There is a vast difference between the balance we fantasize about and the reality of running our own business. How do you figure out if it’s really right for you? If you already run your own business, how do you know you are in the right one to meet your overall life purpose? Here are some tasks to help you decide.

Determine why you want to start a business. If you want to spend more time with your family, it most likely won’t provide that. If that were your only motivation, you would be better off reducing your financial burdens so you can quit working, change to a less demanding job, or reduce your hours at work. If you love the experience of creating something exciting that meets the needs of potential customers, running a business would allow you to do that. If you can handle the rush of riding the ups and downs of creating your own financial success, it might be the challenge you seek.

Eliminate as much debt as possible. Businesses don’t yield much income for a while. It may be three years before it yields enough to even pay the owner a paycheck. Businesses also require a great personal credit history to attain loans and lines of credit to help owners manage cash flow. One of the greatest causes of business failure is lack of cash resources. Business owners often only give a business a year to make it and most need much more time than that to create profitability. Reduce your cash needs and put as much money in savings as possible before you start. You always need three to four times the money you expect.

Evaluate the support of your family. Will your spouse be supportive or feel cheated sharing you with your company and your customers? Will he or she be as willing to do without some things while you chase your dream? Will your children understand when they cannot do everything they could before because of financial restrictions. Will your business venture take you away from things you enjoy doing with your family now? The answers to questions like these may encourage you to wait until the timing is better.

If you have children, how old are they and what are their needs? If they pre-school age, you might want to consider daycare options so you can meet with clients and have some uninterrupted time to work. If they are in school, what are your after-school and summer care arrangements? Clients may appreciate that you are family oriented but it may be difficult to line up their schedule with your children’s schedule. They may have to choose a business that has a more flexible schedule.

Determine the expertise, education, and business experience you have and need to attain. Sizing up these items will help you make a list of potential businesses you would like to start. You might want to own a real estate company but don't yet have your real estate credentials so you can become a broker or agency. Certain professions require licenses, credentials, and certifications to get into those businesses. Your experience and skills used in your current job may lend itself well to creating a business where you offer them. For instance, you may have a lot of experience planning events with friends and family and now want to try making money doing it.

Take inventory of your personal skills. At the end of the day, the most important skills you need are sales and marketing skills. If you don’t want to be salesperson, don’t quit your job because you will fail regardless of how great your product or service is. You need to be able to personally sell and market your services and create happy customers so they refer you. Other skills include the ability to handle simple bookkeeping details. Exceptional people skills are an absolute necessity. It helps to be groomed, charismatic, and friendly because people do business with people they like and trust. Serving and managing people if you aren’t good with people will be difficult. In time, you can hire other people to do these things for you but, at first, all the responsibility will fall on you.

Conduct market research and feasibility studies. Before you invest money, energy, or time, investigate your market and determine if your business idea is feasible. A feasibility study will help you assess what a potential business will require in sales, capital investment, labor to yield enough profit to make it worth the effort. You want to know if the market will support such a business. Sometimes there is a reason that there is no competitor serving your target market. A perceived need doesn’t necessarily mean that there are enough people who will pay enough money for the product or service.

Get advice. The best thing you can do is to get advice from experienced business people. Contact a SCORE chapter in your area (www.score.org) to get a counselor. You can also sign up on their website for e-mail counseling if you don’t have an active local chapter. You can also meet potential mentors when you get involved with your local chamber of commerce. They don’t have do be in your same business to give you honest advice and be a great sounding board. We all get blinded by our visions of grandeur. Mentors can save us money, time, and heartache.

Whew! It is so much more than a vision of having it all, isn’t it? There are also many types of small businesses. In the next issue, we’ll cover six possible options that may help you reach your professional and personal objectives.