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By Mike McKeever
Further away from a lender's ideal is the person who has sound experience managing one type of business, but proposes to start one in a different field. Let's say you ran the most profitable hot dog stand in the Squaw Valley ski resort and now you want to market computer software in the Silicon Valley of California. In your favor is your experience running a successful business. On the negative side is the fact that computer software marketing has no relationship to hot dog selling. In this situation, you might be able to get a loan if you hire people who make up for your lack of experience. At the very least, you would need someone with a strong software marketing background, as well as a person with experience managing retail sales and service businesses. Naturally, both of those people are most desirable if they have many years of successful experience in the software marketing business, preferably in California.
3. Use the Banker's Ideal
It's helpful to use the bankers' model in your decision-making process. Use a skeptical attitude as a counterweight to your optimism to get a balanced view of your prospects. What is it that makes you think you will be one of the minority of small-business people who will succeed? If you don't have some specific answers, you are in trouble. Most new businesses fail, and the large majority of survivors do not genuinely prosper.
Many people start their own business because they can't stand working for others. They don't have a choice. They must either be boss or bum. They are more than willing to trade security for the chance to call the shots. They meet a good chunk of their goals when they leave their paycheck behind. This is fine as far as it goes, but in my experience, the more successful small-business people have other goals as well.
A small distributor we know has a well thought-out business and a sound business plan for the future. Still, he believes that his own personal commitment is the most important thing he has going for him. He puts it this way: "I break my tail to live up to the commitments I make to my customers. If a supplier doesn't perform for me, I'll still do everything I can to keep my promise to my customer, even if it costs me money." This sort of personal commitment enables this successful business owner to make short-term adjustments to meet his long range goals. And while it would be an exaggeration to say he pays this price gladly, he does pay it.
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About the author: Excerpted from "How To Write A Business Plan" by Mike McKeever.
Nolo Press, and reprinted with permission from Nolo Press, Berkeley, CA.
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