Research is Key When Starting a New Business

By Jeanie Patrick
From the August 2012 issue of Columbus CEO

Today, more than ever, people of varying ages are considering starting a business of their own. This may be especially true for baby boomers, who are redefining what it means to retire. Until now, they have been overachievers, moving through life at a breakneck pace and always on the lookout for the next opportunity. Now, as they head into their retirement years, that’s not likely to change. “Unstructured time” is simply not part of their vocabulary.

So what’s next for bored boomers and other entrepreneurial types looking for the next chapter in life? Start a business, of course. Only one problem: These people may not know anything about the business they’d like to launch.

When this occurs, it’s best to begin with a little soul-searching. People should evaluate their careers and decide which direction they’d like to take it. For instance, those tired of sitting at a desk may be lured by the glamour of working outdoors or doing something with their hands. A change in career provides an opportunity to embark on a new and different journey.

Prospective business owners should also think about the things they enjoy, such as hobbies, or the places they visit frequently. These may provide clues about their interests and, in turn, offer insight into the type of business that suits their personality.

 

Do Your Homework

After that, it’s time to do a little homework. Adults call it research. Either way, this is the best—and maybe the only—way to prevent mistakes. Quite simply, it’s how to learn more about the business. Fortunately, there are several approaches to this part of the process. Many people begin their search online, where they can study the competition as well as obtain background about the nuts and bolts of the business. There’s no question the Internet has a wealth of information, and it’s a wonderful place to start.

Nevertheless, there is no substitute for in-person research. If you’re thinking about opening a restaurant, for instance, visit similar restaurants. Taste the food, talk to the patrons, strike up a conversation with the worker behind the counter. This is front-line research, and its value cannot be disputed.

At the same time, it helps to also speak with customers, distributors, suppliers and anyone else connected to the business. It’s crucial to consult with business experts such as attorneys, real estate agents and financial advisors. The financial aspect of starting a business is critically important, and adequate funds should be in place before any commitments are made.

Talk to bankers and trusted advisors about how to finance the new venture. Small-business loans are more difficult to secure than in the past. Work with consultants to determine how much to finance, whether collateral is needed and how much retirement or personal savings can be safely invested. Realistically acknowledge that the venture might not work out; if it doesn’t, you must ensure your future is secure.

 

Seek Educational Opportunities

While it’s true that research is part of the learning process in any endeavor, opportunities for structured education should not be overlooked. This doesn’t always have to come from an institution of higher learning. Suppliers and equipment manufacturers often host workshops and seminars, and classes may be open to prospective entrepreneurs. Because these programs are industry-specific, they are especially useful for people who know nothing about a particular business.

 

Embrace the Challenges

Running a business is a different experience than working for someone else. Although it may sound glamorous, it poses some additional challenges. Not the least of these is the fact that the owner must do a little bit of everything, at least in the beginning.

In addition to learning about the business itself, entrepreneurs must also learn about accounting and information technology. They are in charge of the payroll and inventory and, of course, hiring and firing. All the training in the world does not prepare a business owner for the day he or she opens the door and the point-of-sale machine is not operating properly—or worse, an employee does not show up for work.

When it comes to employees, be prepared to work with different generations. This requires a hefty dose of mutual respect, which should include an open forum for employees to present ideas. Business owners benefit greatly when they listen to their associates.

Finally, realize that it’s likely there will be some hurdles along the way. Don’t give up. Simply find a different way to get the job done. This is where doing the homework really makes a difference. It provides the necessary background for finding alternative solutions, and in some cases, introduces a network of resources to rely on. But perhaps most important, reignite the passion that initially started you down this path. Not only is it the reason you got involved, it’s the driving force that will keep you moving forward.

Jeanie Patrick is the co-founder of Cuzzins Yogurt, which she started with her cousin John Falor in 2010. She can be reached at (614) 581-2240 or jpatrick41@gmail.com.

Reprinted from the August 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.