Starting From Scratch The Basics of Entrepreneurship

Starting From Scratch The Basics of Entrepreneurship image via www.mahmoudzalt.com According to the Merriam-Webster Dictionary, an entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. Not everyone is cut out to be an entrepreneur. Starting your own business requires a lot of patience, money, and time, and definitely a spark of passion. If being an entrepreneur is something you think you are cut out to do, here are some pieces of advice to keep in mind for creating your business and keeping it afloat. Have a good team: When you start a business, you want to make sure that the people you have on board with you are smart, well-rounded individuals, who you can trust and who will help your business reach its full potential. Eric Pellaton, who has been an entrepreneur for ten years, said that he recommends “hiring people who are smarter than you.” image via teams-fs.com Having a team of people with their wits about them will aid you when you need people to bounce ideas off of or even get help from. “You can’t do everything all by yourself in the business, so it will definitely help to hire the right people and therefore have a team which excels in different areas,”  Pellaton said. Daniel Vazquez, CEO of Hoplon Financial Group, agreed with Pellaton. “Surround yourself with those that are much smarter than you and you can trust it’s okay to be the dumbest guy in the room, he said. A lot of the time, entrepreneurs get trapped because they have a great idea, but they themselves don’t know how to run a business. This is where a good team comes in. Hiring someone with business management expertise will allow you to put more focus on your idea and how you want it to play out. Georg Cramm, a founder of ADS Engineering GmbH in Basel, Switzerland, said it is essential to “get to know your business partners before you start business with them, because you are going to need to be able to trust them.” Starting a business is risky enough, and you don’t want to be associated with people who may not have the same interests as you. Cramm gave me an example that happened to him when he was starting his first company.  â€œMy very first company I founded in 1988 out of college. As diploma work my colleague and I designed and built a solar city car. During this work, we met people that were interested in our work and they asked  us to join them in founding a company to build and sell solar cars. Enthusiastic as we were at the time, we joined the “party.” The relation didn’t last too long (about 8 months). I learned my lesson!” This is a perfect example about how you need to know who you are going to be working with and how rushing into things is never a good idea. Be protected: Though having a good team is essential, it is still a great idea to protect yourself, because you never know what may go wrong and according to Pellaton everything that can go wrong will go wrong twice. image via globalgoodgroup.com Keeping that in mind, you want to be able to prepare for the worst. Gilbert Fluetsch, founder of Fluetsch Consulting, said that “in order for an entrepreneur to be protected, he/she should form a partnership, LLC (limited liability company), or even Incorporate.” Pellaton recommended to “set up a contract and already have a good lawyer at your disposal.” Having these things already worked out will save you a lot of time and energy, and you won’t have to be scrambling if something gets messy in the business. Cramm said that he utilizes a memorandum of association. “This document regulates how the value of the company is defined  at any time and how the shares of the company are treated,” he said. You want to make sure that you clearly outline things like what happens to the shares when a partner leaves the company, who can buy at what price, etc. Pellaton also mentioned that you should pay attention to the administration and accounting details right from the beginning. Things will get very complicated if you shove these off to deal with at a later date. Another helpful piece of advice from Cramm is to “check your company name and make sure that you will not be confronted with any trademark issues.” The same goes for patents; you really want to avoid infringements. Let’s talk money: So you have a great idea. Now what? In order to get your idea going anywhere, you are going to need some money. image via thewritersguidetoepublishing.com Fluetsch said “once you have an idea on what you would like to do, you put a business plan together that describes the market you are going to tackle, the economics, and last but not least, the financials.” Most of the time, entrepreneurs start out with a small loan from family members to get their business started. When starting a business you are going to need lots of patience, because you definitely don’t want to jump into something you can’t handle. You want to make sure that the funding for the starting phases will be well covered. Vazquez recommended not to “spend money you think you are going to make before its made.” You definitely don’t want to jump the gun and have to pay for it later, literally. You also have to realize that when you start a company, the decisions you make are not only affecting you, but everyone that you work for. “Remember that you are responsible for the financial well being of all that work for you so keep that in the back of your mind with every decision you make,” Vazquez said. Here is an article on Entrepreneur.com that will give you some guiding tools on how to raise money for your business. Know what you are getting into: When starting a business, you need to be realistic and ask yourself, according to Cramm: 1)     What is your core business? 2)     What is your market? 3)     Who is your team? 4)     How are you financed? 5)     How is your cash flow planning? These questions will give you a good foundation for a business plan. Pellaton also said that the business process is going to take “three to five times longer than you thought and cost way more than you would have imagined. image via www.roundpulse.com Dreaming up something is one thing, but putting it in action is a whole different ball game. Here is an article by Scott A. Shane in The New York Times, highlighting that “failure is a constant in entrepreneurship.” Now, this isn’t to say that you should just give up and quit on your idea, it is just to give you a realistic perspective of the things that are going to be pinning against you. Fluetsch mentioned that switching from being an employee to an entrepreneur means “you are switching from a steady paycheck, benefits, and a relatively secure work environment, to a new, unknown situation.” When you have your own business, there won’t be a constant paycheck each month. You are going to have to constantly be looking for new business, and satisfying your customers to stay afloat. image via havingtime.com The verdict: If you know that starting a business is what you truly want to do, you need to make sure that you have the passion, the wits, and the patience to pull it through. You will have to put in long hours, make sacrifices, trust the people you work with, and make tough decisions from time to time. Vazquez said not to give up. “You will find that success is right around the corner and usually its around the corner you never turned because you gave up.” No one said it would be easy, but if you can pull it through it will definitely be worth it, and I salute you because venturing off on your own definitely takes a good amount of guts! Run your own business, get control of your future, make an impact on your life. To learn more about College Pro, click here or call 1-888-277-7962.