What Business For Me?
Many of you have already decided what business to choose. Others may still be seeking answers from counselors. Whether you have decided or not, you will find it helpful to continue your self-evaluation. Begin by summarizing your background and experience. Include jobs. schooling, and hobbies. Then write down what you think you would like to do. Does what you would like to do match up with what you have done? It is helpful if your experience and training can be put to direct use in your new enterprise. What are your prospective needs? What are your prospective customers' needs? You may make money doing something you don't like if people will pay for it. On the other hand, you will never make money if people don t need your product or service no matter how happy you are doing it. Experts have said more companies fail because they are in the wrong business than because they are "doing business wrong". Read, listen to the experts, talk to business people, try to determine where growth will occur. Most new businesses can only get customers by taking them away from someone else, or by attracting new people entering the area. In other words, don't start a contracting business in a community where the population is decreasing even if you are a good contractor. At this point, try to match your background and interests with what you see the needs to be. If they match, wonderful. Now all you have to do is discover how to offer the customers more for their money than do your competitors. If the needs and your background don't match, don't despair. Get training by working in a company that provides a product or service that is needed. Find a job in a well managed, successful company of the kind you are contemplating. Then absorb as much management know-how as you can while learning the technical skills. Education can help too. While there may be no educational requirements for starting your own business, the more schooling you have along the right lines the better equipped you should be. (Some fields require licenses, certificates, even degrees in specific educational areas.) Certainly it is helpful if you have had courses in record keeping, sales and communication. These needn't be college or even high school courses. They can come from adult education programs and the like. Is there a need for what you want to sell or do? Are you prepared to fill that need? Are you interested in the area? Can you learn what you need to? Will there be a continuing and growing need for your product or service?
Your Chances of Success
What are your chances of success if you go into business? New businesses are always being started. Almost as many are failing or being discontinued. A year of poor business conditions is likely to be followed by a greater than average number of failures or closings. A year of good business conditions tends to be followed by large increases in the total number of businesses. In general, the number of firms increases with increases in human population, total personal income and per capita income and since these factors have increased regularly, the total number of small businesses usually rises every year. This growth is not free of growing pains, however. At the same time new businesses are being born other businesses are being discontinued. Some of these discontinuances are legally business failures; other owners give up to avoid or minimize losses and are not failures in the strict sense. Still others discontinue for reasons such as the death or retirement of the proprietor, the dissolution of a partnership, or the sale of the business to a new owner. Younger businesses tend to discontinue first. Many do not make it through the first year. The discontinuation rate of those that survive this first year "burn-in" declines steadily until at the end of several years the rate has dropped dramatically. So, your chances of success improve the longer you stay in business. Poor management is the largest single cause of business failure. Year after year, the lack of managerial experience and aptitude has accounted for around 90 percent of all failures analyzed by Dun & Bradstreet, Inc. Many factors may adversely affect individual firms over which owners have little control. In such cases, the astute manager can often soften the blow or, sometimes, change adversity into an asset. Examples of factors over which the owner has little control are overall poor business conditions, relocations of highways, sudden style changes, the replacement of existing products by new ones, and local labor situations. While these factors may cause some businesses to close, they may represent opportunities for others. A local market place may decline in importance at the same time new shopping centers are developing. Sudden changes in style or the replacement of existing products may bring trouble to certain businesses but open doors for new ones. Adverse employment situations in some areas may be offset by favorable situations in others. Ingenuity in taking advantage of changing consumer desires and technological improvements will always be rewarded. In the final analysis, it is up to you. Will your management be competent? Will you be able to judge, and then satisfy, your customers' wants? Can you do this accurately and quickly enough to more than compensate for risks due to factors beyond your control? Such accomplishment requires expert management.
Your Return on Investment
Will the rate of return on the money you invest in your business be greater than the rate you could receive if you invested your money elsewhere? While your decision to go into business for yourself may not depend entirely upon this, it is a factor which should interest you. Too frequently people invest money in their own businesses under the misapprehension that the financial return will be far greater than the return from other investments. Investigation of the average annual returns in the line of business in which you are interested may be worthy of your time. Your decision to go into business may not depend entirely on financial rewards. The size of the potential return on your investment may be overshadowed by your desire for independence, the chance to do the type of work you would like to do, the opportunity to live in the part of the country or city you prefer, or the feeling that you can be more useful to the community than you would be if you continued working for someone else. Do not overlook such intangible considerations. But remember, you cannot keep your own business open unless you receive an adequate financial return on your investment.
Your Chances of Success
What are your chances of success if you go into business? New businesses are always being started. Almost as many are failing or being discontinued. A year of poor business conditions is likely to be followed by a greater than average number of failures or closings. A year of good business conditions tends to be followed by large increases in the total number of businesses. In general, the number of firms increases with increases in human population, total personal income and per capita income and since these factors have increased regularly, the total number of small businesses usually rises every year. This growth is not free of growing pains, however. At the same time new businesses are being born other businesses are being discontinued. Some of these discontinuances are legally business failures; other owners give up to avoid or minimize losses and are not failures in the strict sense. Still others discontinue for reasons such as the death or retirement of the proprietor, the dissolution of a partnership, or the sale of the business to a new owner. Younger businesses tend to discontinue first. Many do not make it through the first year. The discontinuation rate of those that survive this first year "burn-in" declines steadily until at the end of several years the rate has dropped dramatically. So, your chances of success improve the longer you stay in business. Poor management is the largest single cause of business failure. Year after year, the lack of managerial experience and aptitude has accounted for around 90 percent of all failures analyzed by Dun & Bradstreet, Inc. Many factors may adversely affect individual firms over which owners have little control. In such cases, the astute manager can often soften the blow or, sometimes, change adversity into an asset. Examples of factors over which the owner has little control are overall poor business conditions, relocations of highways, sudden style changes, the replacement of existing products by new ones, and local labor situations. While these factors may cause some businesses to close, they may represent opportunities for others. A local market place may decline in importance at the same time new shopping centers are developing. Sudden changes in style or the replacement of existing products may bring trouble to certain businesses but open doors for new ones. Adverse employment situations in some areas may be offset by favorable situations in others. Ingenuity in taking advantage of changing consumer desires and technological improvements will always be rewarded. In the final analysis, it is up to you. Will your management be competent? Will you be able to judge, and then satisfy, your customers' wants? Can you do this accurately and quickly enough to more than compensate for risks due to factors beyond your control? Such accomplishment requires expert management.
Your Return on Investment
Will the rate of return on the money you invest in your business be greater than the rate you could receive if you invested your money elsewhere? While your decision to go into business for yourself may not depend entirely upon this, it is a factor which should interest you. Too frequently people invest money in their own businesses under the misapprehension that the financial return will be far greater than the return from other investments. Investigation of the average annual returns in the line of business in which you are interested may be worthy of your time. Your decision to go into business may not depend entirely on financial rewards. The size of the potential return on your investment may be overshadowed by your desire for independence, the chance to do the type of work you would like to do, the opportunity to live in the part of the country or city you prefer, or the feeling that you can be more useful to the community than you would be if you continued working for someone else. Do not overlook such intangible considerations. But remember, you cannot keep your own business open unless you receive an adequate financial return on your investment.
posted by Buhle at
11:29 AM
0 Comments:
Post a Comment
<< Home