Start a Business with Little Investment

Last week you read about three popular ways to start a business.  I promised to share innovative ideas for people who prefer self-employment with little investment.  Today, we look at family businesses and ideas for “tiny”companies, which may grow like mushrooms in the dark.

“I came back home to raise crops, and God willing, a family. If I can live in peace, I will.” -William Wallace ‘Braveheart’ 1995

Family Business

Maybe you grew up in a family owned dry cleaning business.  You started helping your mom and dad at age ten.  With your new degree in Business and the scarcity of jobs for new graduates, you gravitate towards working with your parents. Growing the business might be fun!

If you expect your ideas to be welcomed, think again. Your parents may say loudly, “We’ve always done it this way and it worked.  No!  We’re not investing in your cockamamie ideas.”  Whether you join your family in a thriving, established business or struggling start-up, personality plays the predominant role.

When I asked an HR-VP (non-family) who works for a fast growing, family owned company to comment, he replied, “Family members are expected to demonstrate leadership, both by the owners and the non-family employees. Many talented family members work here, but those with limited leadership skills, cause many issues.”  Another friend with a smaller family business responded that her biggest issues occur when she sees family members headed toward ethical problems.

I’ve been onsite when relatives were terminated.  Talk about pain!  Ouch!

Clear expectations with a balance of personalities keep family members from pulling out their hair or maiming one another.  Some challenges may be insurmountable.  Coming home to run a business may not be an easy way to find work after graduation.   But, you won’t know unless you try!

Start Now to Make Things Happen

Start Now to Make Things Happen

Little Investment: Start Small

Many boomers long for change, but think they lack funds.  Start by exploring alternatives.  Don’t wait until you lose your job.  Start by talking with friendly business owners.  What hobby keeps you busy in your spare time?  Maybe you like to design websites.  Maybe you like fishing.  Hobbies, interests and volunteering often lead to new careers.

You may begin a tiny business from your kitchen table.  It may not grow like Steve Job’s Apple, but by collaborating with other business owners, you will be less likely to flounder.  Learn from your mistakes.  Keep accurate records of what brings the most profit and excitement.  Whether you choose to sell knitting needles or fishing trips online, the ingredients are the same.  1) Research. 2) Plan. 3) Implement. 4) Adjust. 5) Repeat.  You may need a full time job and part time self-employment for several years.

A wonderful article in USA-Today provides several examples, both positive and negative that reinforce that you can do it!  Be sure to read Boomers Take Midlife Cues to Pursue Passions.

I chose the “tiny” business route.  I love being self-employed.  I started with a $28 investment. Although the ride has been bumpy along the way, I know that I am in charge of my destiny, not tethered to some wimpy manager with ego problems or other dreadful situation.

If you start small, there is less risk. Start now, as your business may grow to a point where you can sell it and make millions or use it for a softer landing into retirement.

A few examples of people who changed their careers are: a teacher who started a school supply store, a quilter who began a wholesale quilting supply business and an irrigation company, purchased by John Deere, when the owner decided to retire.

Self-employment is not advisable for everyone, but knowing you have alternatives, since security is a rare commodity, helps with your survival and success!

Crazy Ideas for You

segway tour

Have fun with your business!

Rent Bikes

Artist/Writer/Painter (think George W. Bush)

Golfballs Online

Swim Classes for Special Needs Children and Adults

Segway Tours of Specific Areas

Lawn or Beauty Supplies Online

Antiques on EBay

Sell Useful Products at Industry Conference or Trade Shows

Lawn Service/Snow Removal/Window Washing/Tree Trimming

Fishing Guide

Fitness Products

Videographer

Dog Groomer

Food Cart in Your Neighborhood

Short List of Resources

Most colleges and universities offer courses and conferences for entrepreneurs.

Small Business Administration-http://www.SBA.gov

SCORE- http://www.score.org/

Texas Technical Enterprise Center     www.ntec-inc.org

Murphy Center for Entrepreneurship   www.murphycenter.unt.edu/

UT-DallasCenter for Innovation and Entrepreneurship- http://jindal.utdallas.edu/centers-of-excellence/iie/

Local Chambers of Commerce

3 Ways to Start a Business

“I’m tired of corporate America,” she said.  “I want to be my own boss.  I saved for years and my family obligations are less than ever.  Now’s the time!”  But is she sufficiently prepared?  Research, personality, experience and passion result in success.  After careful introspection, which way will you start a business?

Information

Collaborate for Planning and Research

The three most common ways to start a business are 1) Buy an existing business.  2) Buy a franchise. or 3) Establish a start-up.

Everyone yearns for his or her own business occasionally, but careful research is essential.  First, you must look at your personality.  How is your ability to take risks?  Who are your role models? Who will support your emotional needs?  Once you establish you want to move forward, you’ll need money to invest for these three options.

Buy a Business

Since buying a business requires financial risk, you may have long hours in planning to locate money for your adventure.  Find a business broker with great credentials.

Business brokers assist you with difficult decisions.  If you are in Texas, begin by looking online at Texas Association of Business Brokers a non-profit agency with a tight grip on maintaining the integrity of the industry.  A list of business brokers is available, but personal referrals may assist with your discovery.

Recently I met with Chitra Gupta to hear how she started her commercial real estate business.  She’s exited corporate America a little over ten years ago and never looked back.  Check her website at http://www.cgaworldwide.com/ for a sample of properties.

Franchises

If you want a safer path to business ownership, consider a franchise.  Ways to finance a franchise exist, rather than risking your life savings and borrowing from your 80-year-old grandmother.

Finances

Financial Planning for Starting a Business

Dave Omholt of the Entrepreneur Authority, offers a monthly seminar to help you decide what fits you best when becoming a business owner.  The next free seminar is February 21 from 1:30-2:30.  People can register by going to http://eAuth.com/upcoming-e-learning.  Dave is a franchise broker, which means he represents many different types of franchises.  Whether you decide on a relatively small investment, such as a Subway, or something more elaborate, like Camp Bow Wow, he understands that owning a business in not for everyone.  Even if you have the money, you must have the right personality and ability to manage it.  He wants repeat business, not new owners who may fail.  Owning a franchise provides assistance to help with all business facets, but you may not want to live with their rules.  Less risk, more requirements!

Start-Ups

If you want to build a product or service, which takes a large investment, you’ll need detailed documentation with significant time for growing the start-up.  Trying to find investors is a different ballgame for a start-up.

Since I recruited for start-ups in the past, I know that extraordinary leadership and good hiring is not always a guarantee for success.  Start-up leaders require an abundance of confidence, good stomachs for surprises, big feet for kicking butt, and diplomacy with their Board of Directors.  Start-ups are fast-paced with little structure.  Even a start-up with a fabulous product, going gangbusters, can fail with the loss of funding.  In other words, you must be a little crazy, and profoundly smart!

Statistics

You’ll definitely need to spend time examining the statistics before you invest your time and money in any business.  Are you a calculated risk taker?

Failure rate it high but security is difficult to find anywhere.  How have you managed failure in the past?   How badly do you want to be an entrepreneur?  Is it time for you to move forward with the idea?

List of Best and Worst after 5 Years –from http://www.statisticbrain.com/startup-failure-by-industry/

Businesses with Best Rate of Success After Fifth Year
1 Religious Organizations
2 Apartment Building Operators
3 Vegetable Crop Productions
4 Offices & Clinics of Medical Doctors
5 Child Day Care Services
Business with Worst Rate of Success After Fifth Year
1 Plumbing, Heating, Air Conditioning
2 Single-Family Housing Construction
3 Grocery Stores
4 Eating Places
5 Security Brokers and Dealers
6 Local Trucking

We must plan for the next step in our career and life planning.  Will one of these three ways fit you?

In next week’s article, I’ll give you more insight into several ways to start a business with much less financial risk.  Additionally, I’ll give you a short list of local resources.