Starting Your Business Right: How to Open a Successful Business
Getting from Outstanding Idea to Opening Day
(page 1 of 8)
They say the best predictor of business success is the number of businesses you’ve started. The experience makes all the difference. And that’s great news if you’re a Silicon Valley serial entrepreneur with good buddies in venture capital, but, for most would-be startup owners, it’s just another item on a long list of daunting aphorisms and nervous warnings that you’re going to hear.
So what should you do? Rely on somebody else’s knowledge. That’s why we brought together seven experts in the fields you’ll need to know the most about (but probably need some brushing up on): law, accounting, marketing, financing, and more. These pros sat down with us here in our office to tell us—and you—all about those little things that most new business owners have to learn “the hard way,” to say nothing of the big issues that could make the difference between you succeeding and hitting the job search again next year.
Wondering what loan officers are looking for, how long your business plan should be, or what kind of website you need? Then read on to find out the answers to those questions—and lots of others.
Robert Schork: We have a premise we are going to kick off with: Harry is a Westchester resident. He’s a successful professional in his career, but he has always dreamed of owning his own widget factory in Tarrytown. How do we get Harry from concept to opening day?
Louis Scamardella: I would say it all starts with the business plan. I find that [often] people with ideas have not thought out the product and how to deliver it to a customer in an efficient way at a reasonable price that you could make money on.
Joseph McCoy: I agree. I think the business plan provides a good road map to help guide you through the process. It outlines, obviously, a vast array of aspects of starting out the business—your competition, what your goal is, where you see yourself in the future, your projections.
Robert Schork: So how detailed of a business plan should Harry have? How long should it be, and what are its essential components?
Louis Scamardella: I would say it’s a rational story of how you would deliver this product to a customer and make a profit on it. Seven to ten pages, I think, is sufficient. I like to see [prospective entrepreneurs] differentiate themselves. I think that many startup businesses think of themselves as defeating the competition. But they should ask, ‘What is my niche in this competition?’ And also, ‘How is the competition at delivering those goods and services? What can we learn from that?’
Jeanne Goulet: I think what he needs to do is determine if he has a good product-market fit. So if he wants to develop a widget, he would need to see if there are customers who are interested in that widget. Frequently, an entrepreneur starts out wanting to do a particular product, and then finds that customers are interested not in this product, but maybe in a twist on it. Then they can do their business plan, which, for an entrepreneur who’s just starting out, is basically not a profit-and-loss statement or a balance sheet, but more a ‘cash burn’: How much cash does he need to develop a product, get it out there, and start to generate revenue? How long will it take before he can generate revenue?