Words of Wisdom: Starting a business

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    According to Ted Legatski, associate professor of professional practice in management,

    an entrepreneur is committed, confident and comfortable with risk.

    Legatski said there are five key areas an entrepreneur should consider.

    1. Personal 2. Idea 3. Competition 4. Resources 5. Nuts and bolts

    An entrepreneur’s first step is a serious personal evaluation with tough, forward-thinking questions.

    1. Can I realistically do this; is my plan feasible?

    2. What is my level of tolerance for risk?

    3. Do I have the confidence to surpass barriers?

    4. Do I have the level of commitment required?

    Talk to successful business people. It helps give you an idea of what to expect and networking is important.

    Beware of things that can prevent a successful launch.

    1. If you plan for things to go wrong you’ll never “pull the trigger” on your venture.

    2. If you don’t thoroughly research, you can’t fully understand your target market.

    3. If you project your attitude on those around you, you will lose vital outside input.

    When you have the personal aspects figured out, it’s time to firm up the idea. Keep in mind, he said, that one of the most important keys to initial success lies in finding an offering that is truly different in a valuable way. Legatski recommends the “outside-in” approach: looking at gaps in the world around you and figuring out how to fill a gap.

    Next comes research on current competition and future competitors8212;their strengths and weaknesses and the market niche they are ignoring. Then find, target and exploit that niche before competitors become aware of your business. This allows you to develop routines and efficiencies for better competition, Legatski said.

    Bootstrap financing means utilizing the three F’s: friends, family and fools. You don’t have to own all your resources; you just have to have to be able to use them. Minimize costs, especially fixed costs like machinery. If there’s a way to use a piece of machinery instead of buying it, do it. While your competitors have high fixed costs, you can produce goods at a lower cost. Bottom line, he said, think in terms of reducing cost without reducing effectiveness.

    Once your resources come together, consider the nuts and bolts, or legal framework, of your business. Legatski said there are differences in proprietorships, LLCs and corporations when it comes to taxation, liability and employment status. There are other considerations, he said, although less important: survivability, ability to raise capital and managerial control. Sole proprietorship is the easiest form of business for a start-up but offers no separation of finances between entrepreneur and business and no liability protection as is available to LLCs and corporations.

    If you still think you have what it takes, follow Legatski’s three golden rules:

    1. Confirm the market and know that value is found where people are willing to sacrifice to obtain.

    2. Know how to deliver value at the lowest possible cost by practicing bootstrap financing.

    3. Constantly evaluate what you want your business to be and obtain and consider its image.

    ccording to Ted Legatski, associate professor of professional practice in management,

    an entrepreneur is committed, confident and comfortable with risk.

    Legatski said there are five key areas an entrepreneur should consider.

    1. Personal 2. Idea 3. Competition 4. Resources 5. Nuts and bolts

    An entrepreneur’s first step is a serious personal evaluation with tough, forward-thinking questions.

    1. Can I realistically do this; is my plan feasible?

    2. What is my level of tolerance for risk?

    3. Do I have the confidence to surpass barriers?

    4. Do I have the level of commitment required?

    Talk to successful business people. It helps give you an idea of what to expect and networking is important.

    Beware of things that can prevent a successful launch.

    1. If you plan for things to go wrong you’ll never “pull the trigger” on your venture.

    2. If you don’t thoroughly research, you can’t fully understand your target market.

    3. If you project your attitude on those around you, you will lose vital outside input.

    When you have the personal aspects figured out, it’s time to firm up the idea. Keep in mind, he said, that one of the most important keys to initial success lies in finding an offering that is truly different in a valuable way. Legatski recommends the “outside-in” approach: looking at gaps in the world around you and figuring out how to fill a gap.

    Next comes research on current competition and future competitors8212;their strengths and weaknesses and the market niche they are ignoring. Then find, target and exploit that niche before competitors become aware of your business. This allows you to develop routines and efficiencies for better competition, Legatski said.

    Bootstrap financing means utilizing the three F’s: friends, family and fools. You don’t have to own all your resources; you just have to have to be able to use them. Minimize costs, especially fixed costs like machinery. If there’s a way to use a piece of machinery instead of buying it, do it. While your competitors have high fixed costs, you can produce goods at a lower cost. Bottom line, he said, think in terms of reducing cost without reducing effectiveness.

    Once your resources come together, consider the nuts and bolts, or legal framework, of your business. Legatski said there are differences in proprietorships, LLCs and corporations when it comes to taxation, liability and employment status. There are other considerations, he said, although less important: survivability, ability to raise capital and managerial control. Sole proprietorship is the easiest form of business for a start-up but offers no separation of finances between entrepreneur and business and no liability protection as is available to LLCs and corporations.

    If you still think you have what it takes, follow Legatski’s three golden rules:

    1. Confirm the market and know that value is found where people are willing to sacrifice to obtain.

    2. Know how to deliver value at the lowest possible cost by practicing bootstrap financing.

    3. Constantly evaluate what you want your business to be and obtain and consider its image.