Chapter 4: Starting a Business

It's dangerous to fall in love with the idea of starting a business instead of falling in love with the business itself. Go into this with a good idea of reality.

Starting Thoughts

First Things First

A business plan is not the most important single requirement for starting a business. Many other things are much more important. For example:

Customers: The first thing you really need to start a business, maybe even the only thing you really need, is customers. It all starts with at least one customer.
Customer needs: Your business must fulfill some type of customer need in order to be successful. Sometimes customer needs can be intangible, like security or prestige. Some customer needs seem frivolous, but they still matter. Make sure there is a market for your service or product. Your business will fail if it doesn't address a customer need.

Myths About Starting a Business

There are several myths about owning and operating a business that should be avoided at all costs. These common myths cause a lot of problems:

The myth of "being your own boss": You are not your own boss when you own a business. Your customers are your boss. Your bank is your boss. Your fixed costs are your boss.
The myth of "independence": Owning a business doesn't make you independent — not needing money makes you independent. As long as you need money, you can't be independent.

Think it Over

The folklore of business start-ups generally underestimates the risks. Imagine yourself missing mortgage payments when you can't cover your business costs and facing employees when you can't make payroll. Those negative images are also part of business ownership.

Don't go into a business based on the folklore and myths. There are plenty of good reasons to do it. As you start a company, plan ahead. Give yourself the benefit of a real estimate of start-up costs.

If you can't afford to lose the money, then don't put it at risk.
If you can't convince somebody else to put up the money, think again about the business you want to start.

Try running through the easy-to-use online starting costs calculator at www.Bplans.com.

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