Whoa! Slow Down Before You Start Up

So, you're a master in your chosen field? Before hanging out the shingle, you'll need to embark on a whole new learning curve

By Karen E. Klein

Q: I would like to start a 3-D animation and visual-effects company. I have a graduate degree in the field, but wonder if I also need business training. If so, what kind of entrepreneurial education should I pursue? -- A.R., New York City


Most would-be entrepreneurs find themselves in a position exactly like yours. They're experts in their craft and have good educational backgrounds, but they know little or nothing about accounting, pricing, making cost-projections, marketing, strategic planning, or employee management -- all crucial to business success. So, yes, you need some rudimentary general business training as well as some preparation specific to your industry. Fortunately, you don't have to earn another degree before pursuing your entrepreneurial dream. You can find great low-cost or free resources.

Start at the Small Business Administration Web site. It includes a survey that will help size up your suitability to entrepreneurship, a guide to writing a business plan, and tips about financing.


  Also, check with your local community college or university to see if it offers entrepreneurship courses. If you don't need college credit, ask if you can simply sit in on the classes.

Another good stop: your local Small Business Development Center. (The site tells you where to find one of its offices near you.). The SCORE organization provides entrepreneurial counseling, either in person or online. Also, the online entrepreneur course offered by My Own Business provides solid training.

While you get formal training, however, you should also think about pursuing real-world skills without risking your startup capital: Get a job in your industry of choice, and learn the business from the ground up, as an employee. "Having a degree in your field is a start, but there's a great deal more to know," says Martin Lehman, a SCORE counselor based in New York City. "Before you open a restaurant, you had better know how to wash the dishes, cook the food, and serve it. You have to get your hands dirty and do the work."


  With a graduate degree in your field, you can likely land a job with an established visual-effects firm. Don't be too picky about the position, though. You aren't looking for a dream job, just one that will sharpen the expertise you ned to strike out on your own.

While you're doing that work, Lehman suggests, observe how your employer runs the business. For instance, how does the company bring in new customers? How does it make products efficiently and safeguard profit margins? How does it deliver merchandise? How does the owner figure costs in order to bid on new jobs? How much does it cost to operate the business day-to-day, including telephone charges, rent, and salaries?

While working at your "apprenticeship," build up the savings you will need to launch your own startup. You may want to refrain from broadcasting your future plans to your new employer, particularly if you think the boss might consider you a threat. But feel free to ask questions discreetly about how the company operates. You may find that the boss likes nurturing nascent talent, at which point you can speak openly about your long-term goals. Many business owners will generously pass their knowledge on to a new generation of entrepreneurs and serve as invaluable future contacts.


  Researching your industry is also important, says Kathleen Allen, a professor at the University of Southern California's Marshall School of Business and the author of Entrepreneurship for Dummies. "Starting a business in a highly competitive industry…means that you have to have a good handle on how the industry works," she says. "Who are the major players? What does the value chain look like? How do companies like yours compete?"

Investigate the professional associations and industry groups that serve animation and visual effects companies, then nose around on their Web sites and subscribe to their publications to get information on what other companies in this space are doing. "You need to find a niche in the market that no one else is serving," Allen says. "That's the best way to enter so that you don't have to go head-to-head with the established companies." Your company, once finally up and running, will be a better one for it.

Have a question about your business? Ask our small-business experts. Send us an e-mail at Smart Answers, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, N.Y. 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues

Edited by Rod Kurtz

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