Resources for an Aspiring Young Entrepreneur
I read your article (BusinessWeek,com, 11/7/08) in regards to President-elect Obama's plans regarding small businesses and I am determined to start a business of my own. I am very young, but have a lot of determination and recently became the first to graduate college from my family. I know California is in a major crisis, but I have a business model which can work. What programs are out there to assist me?
—D.J., Los Angeles
Congratulations on your graduation and your entrepreneurial ambition. There are a number of places where you can get help with your training, your business plan, and your financing. Unfortunately, as you already recognize, you've picked a very tough time to think about starting a company. Bank lending standards have tightened dramatically, according to the Federal Reserve Board, and companies large and small are laying off employees as they anticipate lower consumer spending in the near future.
Start by writing a business plan (BusinessWeek.com, 1/7/08) that includes conservative revenue projections and a realistic breakeven date, says Dileep Rao, president of InterFinance Corp. in Minneapolis and a lecturer at the Carlson School of Management at the University of Minnesota. "You may think your projections are pessimistic when they are actually relatively optimistic. Have somebody else vet your projections for you and ask the right questions about whether your numbers are conservative or not. Then look at various ways of reducing how much money you'll need to get started," he says.
You can get help with your plans from organizations that support entrepreneurship, such as a local Small Business Development Center, or a SCORE office, a nonprofit group of retired executives who do volunteer counseling to help small businesses with management issues. If you're a member of a minority group, check out the Southern California Minority Business Development Council.
Consider an "Apprenticeship"
Although you've graduated recently, if you haven't studied entrepreneurship, you might take a class specifically on that subject offered by your local community college. Going into business with some background in business accounting, marketing, and operations management is invaluable. You can take online courses and tutorials at Web sites such as MyOwnBusiness.org and the U.S. Small Business Administration. There are myriad books on small business that can help you do your planning, projections, hiring, and legal setup.
Given the rough economic climate and your youth, you might think about putting in a couple of years at a company similar to the one you'd like to open, Rao says. Even taking a low-level entry job will afford you a chance to learn the ropes if you keep your eyes open, ask questions, and figure out what works and what doesn't. "Look at the timing and get some experience before you go off and start something, unless you already have the money. I don't recommend that anybody get into business if they plan to borrow all the cash to do it. That was a dangerous trend that I hope is gone," he says.
Working in your industry will not only educate you on what's needed to make a business successful but it will also give you breathing room to save up some cash, a chance to form relationships with entrepreneurs who could become your mentors or investors, and learn everything you can about starting a business (BusinessWeek.com, 4/16/07). If you time things right, you'll be ready to go out on your own as the economy begins to improve in a year or 18 months.
One last thing to consider: Running a small company means that you will first and foremost be in the sales and marketing business. No matter how good you are in your field of choice, if you can't sell your product or service effectively, you won't succeed. Think seriously about whether you have an entrepreneurial personality (BusinessWeek.com, 10/30/06) or whether you can form a partnership (BusinessWeek.com, 3/21/08) with someone who does before you take the leap into small business ownership.
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