Knowledge Hoop

As I prepare to close the Aim to Win in This Economy series, the last topic I would like to discuss is pursuing your passion.  Each one of us has been blessed with unique gifts and talents.  Many times, the things that we’re most passionate about align with the things that we do well.  Take a moment and think about the co-worker, relative, or friend that is an extraordinary artist.  Or, maybe you know someone great at event planning or helping others organize and de-clutter their lives.  What about you?  What can you do well?

According to an article in BusinessWeek, as a result of the recession, “necessity entrepreneurship” has increased significantly.  Necessity entrepreneurship occurs when people start businesses because they can’t find other employment.  In recent surveys conducted by Global Entrepreneurship Monitor, a research project that tracks entrepreneurship, necessity was a factor for 24.7% of new U.S. businesses in 2009, up from 16.3% in 2007.  Many times, business ideas are deferred for the safe bet, but when you are unemployed or underemployed, the risk factor carries less weight. 

Entrepreneurship is woven into the fabric of what makes our Country great.  However, to be successful, it takes more than talent.  In order for a small business to become a great business, the business owner has to work on the business, as well as in the business.  Perhaps you’re a wonderful baker, or a great decorator; it does not mean that you have the know-how to start a business and manage it effectively.  Please understand that I am not trying to “rain on your parade”, but I want to stress that your passion may steer you to the business of your dreams, but it will not keep you there.  Ultimately, if you are not willing to do the work, don’t waste your time and money.  However, if you understand that owning a business is much more than the skill or talent you possess, take the leap of faith and “bet” on you.  The following are key considerations when starting a business: 

• Ownership Structure – Will you operate as a Sole Proprietor, Partnership, or Corporation?  Spend some time researching your options and choose the best structure for you.  The Internet has a number of resources to help you navigate through this process, however, if you’re unsure of where to start, consider www.legalzoom.com.
• Applicable Federal and State Laws – Once you’ve identified your ownership structure, it is imperative that you gain a thorough understanding of federal and state laws that apply to your business.
• Develop a Team – Although you may be able to produce the product for your business, an effective business requires a multitude of skill sets that you may not possess.  For instance, every business has to incorporate marketing in order to compete, and let’s not forget about bookkeeping and taxes.  If you do not possess these skills, you will have to hire help.  The skills that I mentioned in the example are necessities.  While I understand the need to save money where possible, foregoing the basics will land you out of business or in jail.
• Protect Your Business – Explore insurance options for yourself and your business.  Insurance is something that we hope we never have to use, but are ever so grateful that we have it should the need arise.  
• Capital – It takes money to start a business.  While it doesn’t hurt to be cost conscious, you have to be realistic about what resources you have available. It is also wise to consider establishing a reserve for the unexpected.
• Find a Mentor – My favorite phrase is:  You don’t know what you don’t know, and you can’t do what you don’t know.  It is very important to find a mentor that has been where you’re trying to go.  There is no shame in asking for help. 

In addition to the considerations above, begin to seek resources that can help you fill in your knowledge gaps.  T. Harv Eker, author of Secrets of the Millionaire Mind, says it best:  “Every master was once a disaster, you can learn to be great at anything.”  Successful people are teachable.  Invest in yourself and seek opportunities to learn as much as you can about business.  Although I mentioned that it is important to develop a team, you should still be equipped with the basics.  For example, an accountant may prepare your financial statements, but you should have a thorough understanding of what’s being presented.  Included below are links to a couple of resources that I’ve found extremely helpful:

1.  The E-Myth:  Why Most Small Businesses Don’t Work and What to Do About It, by Michael Gerber
2. www.startupnation.com

I hope that you’ve enjoyed the Aim to Win in This Economy series.  I’d like to hear from you!  If you have recommendations on additional resources that can be helpful to those of us that are striving to pursue our passion, please share.  Remember, every great business was once a small business!