Carol Roth has been helping businesses grow for more than 15 years by helping them raise more than $1 billion in capital, completing hundreds of millions of dollars in merger and acquisition transactionss transactions, securing high-profile licensing and partnership deals, and creating brand loyalty programs. In her new book, “The Entrepreneur Equation: Evaluating the Realities, Risks, and Rewards of Having Your Own Business” (BenBella Books, March 2011), she talks potential business owners through launching a startup.
She told BusinessNewsDaily what you need to do before you get started.
Know your motives
Are you bored, wanting to be free of a boss, or eager to jump on the bandwagon of a hot technology? These are not valid reasons to start a business. But if you're focused on solving a customer problem, believe you can do better than anyone else, and are dying to work long hours, wear many hats, and balance numerous responsibilities, you have the right startup mindset.
Meet the people
If you equate business ownership with solitude and freedom from annoying co-workers or managers, you're in for a surprise. Entrepreneurs spend most of their time dealing with people –— investors, professionals such as lawyers and accountants, suppliers, and customers.
Ever managed employees and vendors? Do you know your industry inside and out, including aspects such as accounting and marketing? If you don't have all the entrepreneurial skills you need, acquire them before starting your business. Spend time working in a similar company, shadow a business in your industry, or accept an internship.
Check your checkbook
Be honest about your relationship with money. Do you have money to invest? Are you able to lose it all? Will you rely on others? Do you avoid financial risk at all costs? Are you "good" with money? How you handle money now will influence the type of financial manager you'll be.
Know your competition
Is your market saturated with successful businesses? Is your industry littered with bad businesses? Is anyone doing what you want to do? If not, why not? To brand your business and woo investors, you'll need to understand why and how you can outshine competitors.
Test your scalability
Successful businesses rely on automation and delegation. Will you be able to teach other employees to do your work? If your business relies on your brain and skills alone, you might have a successful job, but not a successful business.
Carol Roth is a popular media personality on Fox News, MSNBC, and WGN-TV Chicago, and has an award-winning blog at www.CarolRoth.com.