For young people frustrated by the job market, entrepreneurship remains a tempting opportunity to fashion a career on their own terms. However, for novice entrepreneurs, just starting the business may be the most difficult part. We've talked with several entrepreneurship experts, who offer these tips for improving your odds of success:
1. Only do it if you're passionate.
"Don't start unless you're passionate about the idea," says Chip Manning, director of the Babson Center for Global Commerce at Sewanee: The University of the South in Sewanee, Tenn. "If you want to be successful and break out of the pack, expect that your work will consume your life."
In addition to "passion," Manning suggests a few other "P" words to live by: "purpose," "perseverance" and "patience."
"Your business needs purpose, to know why it was started and for what markets and customers it exists," he explains. "You need perseverance, because you will fail more than you succeed. Finally, have patience. While many entrepreneurs want to be the next Zuckerberg, he is the exception to the rule. Col. Sanders didn't make it big till he was in his 60s. Most entrepreneurs are on the 'get-rich-slow' path."
2. Start with a business plan.
"Everything should start with a business plan," says Rick Scott, assistant professor of finance at Saint Leo University in Saint Leo, Fla. "If the entrepreneur cannot clearly state in such a plan how the business will become profitable, it probably won't. A business plan is required by almost all lenders or potential outside investors."
In addition to providing a means of accessing outside resources, a business plan can help solidify the business concept for the entrepreneur. "The entrepreneur should not only think about what will happen if things work out favorably," Scott stresses. "He or she should attempt to think of everything that could possibly go wrong and plan how to meet those challenges if they arise."
3. Go to trusted friends and institutions for help.
"Seek out help and advice from successful entrepreneurs, professors, family and friends," says Jim McKeon, who teaches entrepreneurship at Western England University in Springfield, Mass. McKeon emphasizes that help may come in many forms, including cash. "Enter competitions for entrepreneurs. Some of them carry monetary prizes; all of them present networking opportunities."
When seeking outside assistance, it always helps to demonstrate the competency and potential of your business. "Nothing impresses bankers and investors more than making sales," says McKeon. Finally, don't forget to get some help from the U.S. Patent and Trademark Office. "Apply for a provisional patent application, which protects your idea for one year and is not difficult or expensive to obtain. When it comes time to file for a long-term patent, contact only experienced patent attorneys. They are expensive but worth the money, and some will waive their fees for company stock."
4. Know your market.
There's no time like the present for conducting thorough market research, according to Leann Mischel, assistant professor of management at Susquehanna University in Selinsgrove, Pa. "Don't assume that if you build it, they will come," says Mischel. "It is much more difficult to get a product or service out there than you think, and now matter how great the product is, market research and the right marketing are both extremely important."
Market research will help you avoid squandering precious funds on risky endeavors or a trial-and-error methodology. "Assume your costs will be three times as much as you think they'll be," says Mischel. "It's very expensive to launch a new product or service, and we always underestimate how much it will cost and how long it will take."
5. Be cautious and conservative in your spending.
In the early, lean days of your business, every penny counts -- try to stretch your dollar as far as possible. "Be conscious of fulfilling your company's needs, and don't waste money on wants," advises Tim Krulia, president of My Headquarters Pro, LLC. "When contracting services from other vendors, if you only need the services included in the 'bronze-level' package, don't get talked into the 'gold-level' package at a hiked-up price."
Krulia also suggests negotiating with vendors to keep costs down. "When deciding between a more expensive vendor with superior quality and a cheaper vendor with unfavorable quality, use the lower-priced option as leverage to get the higher-quality vendor to lower their price," he says. Finally, take advantage of 30-day free trials whenever you can. "It's great to use a vendor's service before committing any money to it. Even if you already know you want to hire the service, you still get the first month for free."
6. Work hard and listen closely.
"An entrepreneur works about twice as hard as any regular employee for at least the first five years," says David Rudd, professor of business administration at Lebanon Valley College in Annville, Pa. "You're fighting for the resources you need and the market position you desire all the time."
One way to push ahead in the fight is to listen closely to others, especially to dissenting opinions. "Listen to your potential customers when they talk about your product," says Rudd. "It takes a great deal of discipline not to shut out the less complimentary commentary." At the same time, time is tight, and entrepreneurs should avoid narcissistic perfectionism. "Avoid becoming that inventor who is always tinkering with the idea to get it perfect. Get the best execution you can on the market, and then improve on it continually."
7. Maintain your integrity.
In a world where the public has suffered widespread financial hardship as a result of corporate fraud and corruption, it's more crucial than ever that business leaders remain mindful of the impact of their actions. "Maintain your integrity," says Steve VanderVeen, director of the Center for Faithful Leadership at Hope College in Holland, Mich. In addition to its self-evident superiority, the ethical path also makes for a great business strategy. "At the end of the day, the public invests in competence and people of character."
Integrity in entrepreneurship doesn't end when you leave the office, either. "Listen to your spouse," VanderVeen exhorts. "Don't sacrifice your family for your business."
Ethical behavior also fosters kindness and gratitude in interpersonal relationships, both of which will help your business grow. "Say 'thank you' in meaningful ways," says VanderVeen. "Keep listening and learning."
8. Anticipate conflict and personal fallout.
Finally, some bleak but perhaps prescient words of wisdom from Jeff Langenderfer, professor of business at Meredith College in Raleigh, N.C.:
"Expect conflict. When business partnerships are formed, partners often take shortcuts in the planning documents that govern their relationship. They fail to anticipate that the relationship is likely to break down eventually. Though there are many examples of successful, long-term partnerships that are free of major conflict, they are the exception rather than the rule. This is true whether or not the underlying business is successful. When the business is successful, most people have a myopic view of the spoils, leading to dissolution, often with litigation --think Facebook. When the business is unsuccessful, there are often recriminations regarding what went wrong, often with litigation -- think Enron.
"My advice is to really carefully talk through, in advance, about what will happen in the event of a breakup and how things should be handled. Use the outcome of your discussion as the framework of your partnership agreement. You'll probably need it later."