If I'd Only Known... What no one ever told me about running a business

Business ownership is full of surprises. No matter howthoroughly you plan before launching your venture or how muchprevious business experience you have, something unexpected alwayscrops up. These surprises are part of the fun and challenge ofentrepreneurship, many business owners say.

In the 10 years I've been writing about small business,I've been struck by how often seasoned BIZ Experiencess,remembering their start-up, say, "If I knew then what I knownow, I would have done such-and-such differently."Wouldn't it be great, I thought, to share these lessons soother start-up business owners could avoid painful and costlysurprises?

In thousands of interviews with successful business owners,recurring themes emerged, 101 of which appear in my new book,What No One Ever Tells You About Starting Your Own Business(Upstart Publishing, $17.95, 800-245-2665). The following 10lessons are among the first you should heed as you venture into thewonderful world of business ownership:

1. Don't sell what you want; sell what yourcustomers want. Dave Markham started Venture Outdoors inHailey, Idaho, by offering vacation adventure trips that matchedhis personal skills and desires. But few people signed up for hisAlaskan kayaking trips.

"I had to find out what the public wanted," heexplains. By asking questions of prospective customers, Markhamlearned he would be more successful offering trips forbeginners.

Markham didn't have a big budget for formal surveys, so heset up a toll-free phone number and asked callers what they lookedfor in an adventure vacation. He compiled a mailing list of pastcustomers and those who inquired about Venture Outdoors, and sentthem surveys. Finally, he diligently logged--and evaluated--theresponses.

2. You need a written business plan. PatriciaCreedon was so busy with day-to-day responsibilities after startingher electrical contracting company, Creedon Controls Inc. inWilmington, Delaware, that she didn't write down her businessplan. But she soon learned it wasn't enough to just carry theplan in her mind: When her fast-growing company encounteredfinancial problems, Creedon desperately needed a formal plan toattract investors. "Writing a business plan [helped me seebeyond] the day-to-day grind and focus on the future," shesays.

A business plan starts by explaining your company'sobjectives and why it will succeed. If the plan is intended toacquire capital, it must explain how the money will be used andrepaid. The typical plan includes sections on organization,products or services, marketing, and financials.

3. Know your strengths. When Jo Ann Fischerlaunched her Fullerton, California, secretarial service, Write WhenU Need It, she initially accepted a wide variety of projects, fromtyping and writing to graphic design.

"I soon discovered clients didn't realize howtime-intensive [designing] brochures was, and they tended tocomplain about cost," Fischer says. Writing, on the otherhand, was easier for her, and clients appreciated its value morethan her artwork. "I should have had the guts to focus on whatI loved most--writing--from day one," she says.

Fischer refocused her business to emphasize newsletter creation,proofreading, business writing and editing. Today, if a clientwants graphics as part of a project, Fischer charges more for it.And she refers callers to other firms that handle spreadsheets,databases and finances.

4. You don't have to know it all--but if youdon't know, ask. A layoff inspired JenniferJackson-Smith to start her event-planning and tradeshow-managementfirm, Meeting Details Unlimited, in Pasadena, California. At firstshe was afraid to ask questions, fearing clients or otherentrepreneurs would think her incompetent. "I had always beenindependent," she explains, "so learning to ask for helpwas my biggest challenge."

Jackson-Smith soon realized that for Meeting Details to thrive,she'd have to overcome her insecurities and start asking thosetough questions. "I realized it's OK not to know all theanswers," she says.

She also asked business experts for guidance on pricing andmarketing her services, and discovered others had dealt with manyof the issues she thought were unique to her.

5. Use classes, seminars and tapes to learn all youcan before start-up. When Ron Schmitz bought a run-downcabinet shop in Sauk Rapids, Minnesota, he knew how to makecabinets--he just didn't know the first thing about running abusiness.

At first, Schmitz barely scraped by. Then he received a flieradvertising a series of seminars on business management. Since hecouldn't take the time to attend, he bought audio tapesinstead. "I listened to the tapes on the road," Schmitzrecalls. "It turned me around. I listened to them 10 or 20times."

Schmitz has since attended thousands of short courses andseminars on business, and listened to about as many tapes. Theinformal education has certainly paid off: His sales topped $7million in 1997.

6. Live within your means. Like manystart-ups, Maureen Murphy was uncertain about what her revenues andexpenses might add up to when she started Murphy Marketing in SantaMonica, California. "I overspent at first, partly because Ididn't realize how fast my start-up capital would go," shesays.

Lacking a realistic budget kept her mail order catalogconsulting firm from growing. Murphy finally put her business on asimple bookkeeping software program. "Suddenly, I could see Iwasn't being extravagant. When I realized how much money Ineeded [in order] to flourish, I took the steps to earn it,"she says. "When I began targeting higher financial goals, Iachieved them."

7. Cash is king. Bringing in enough to paythe bills is a challenge for any new business--and it was for PaulHsu and his Marathon County, Wisconsin, ginseng farm. He could sellginseng for $45 to $65 a pound, but first he had to invest up to$20,000 per acre and wait four years for the harvest. "[Lackof] cash flow can kill a business," Hsu says.

To maintain cash flow until his crops matured, Hsu sold ginsengfor other farmers. He also borrowed from relatives and friendsuntil Hsu Ginseng Enterprises could qualify for a loan. Eventually,a line of credit solved his cash-flow problems, and today, HsuGinseng Enterprises has become a $20 million company.

8. You need a marketing plan. After writingtheir business plan, Kathy Donoghue and Judy Nevins thought theywere ready to start their Tampa, Florida, consulting and trainingbusiness, Another Alternative. Although the business plan includeda section on marketing, the partners soon learned the value ofcreating separate, more in-depth marketing plans for each newservice, geographic area and industry they targeted.

A marketing plan establishes your strategy for reaching yourcustomers by spelling out the competitive advantage of your productor service, market size, anticipated market share and majorcompetitors. Effective marketing plans also specify a budget and atimetable for the campaign, plus ways to measure results.

"[All business owners think they] have the best [product orservice] and that everyone will realize it," Donoghue says."But especially with a new business, you have to sellyourself."

9. Marketing--even on a shoestring--isessential. Like many new business owners, Pearl Whitedidn't have a big marketing budget when she opened ConfidanteKeys, an Irvine, California, business support services firm. So sheused ingenuity and persistence to make up for the cash shelacked.

"Every little bit of marketing helps," says White, whostarted by printing simple fliers that described her services,qualifications and location. She hand-delivered the fliers to everybusiness near her office in an industrial park. She also joined thelocal chamber of commerce and agreed to be the paid coordinator fora business leads group, which gave her a steady source of incomeand showcased her abilities for members.

10. Delegate to grow your business. WhenBIZ Experiences Richard Yobs first opened Painten' Place, a paintand wall-coverings store in Denville, New Jersey, he tried to do italone. Yobs spent all his time in the store doing a minimum-wageclerk's job--instead of hiring someone so he could devote histime to cultivating new customers.

"I needed to learn to delegate so I could spend more timegrowing my business," he says.

Yobs had to get over his concern that employees wouldn't dothe job exactly the way he would. He trained new workers to servicecustomers and run the store. "Then I had to say `Bye, I'mgoing out on the road.' It took a few years for me to getcomfortable leaving," he says. "But if you allow[employees] to make decisions, they will. They may make mistakes,but they'll learn and do better the next time."

Jan Norman is a writer who specializes in small-businessissues.

Contact Sources

Another Alternative, (813) 633-0867

Confidante Keys, (949) 651-1068, http://www.cruznet.net/~ckeys

Creedon Controls Inc., http://www.creedoncontrols.com

Hsu Ginseng Enterprises, T6819 County Hwy. W., P.O. Box509, Wausau, WI 54402, (800) 826-1577

Meeting Details Unlimited, (626) 798-1148

Murphy Marketing, (310) 395-9722

Painten' Place, (973) 627-4050, fax: (973)627-5890

Ron's Cabinets, P.O. Box 250, Sauk Rapids, MN56379