Can I start a business despite having no business training?

Monday, December 8th, 2008

Dear Norm,
I’m an entertainer and a tennis professional with a sports-education business, teaching tennis through on-court musical tennis shows and specialty clinics. I want to grow the company, and I have the passion and the long-term vision to do it, but I don’t have a business background. Do I have time to become a businessman, or do I need to find people to grow the business for me?
David

Dear David,
My guess is that you have many more business skills than you give yourself credit for. You have customers, don’t you? You must have selling ability and marketing ability, and those are two of the most important skills a businessperson can have. OK, so you may not know accounting. That doesn’t mean you can’t learn the numbers, and it’s the numbers you need to know, not the technicalities of accounting. My advice is to go ahead. There’s only one way to acquire business experience: you have go out there and take your lumps. You can’t succeed without trying. At worst, you’ll get a great education for your next business.
Yours truly, Norm

Permalink  |  Posted in Business Success, Startups

How do I ask family to invest in my business?

Monday, November 24th, 2008

Dear Norm,
I’m only twenty-two years old, but I’ve been wanting to start a business for a long time. My passion is computers, and I’ve come up with a concept that has an incredible upside. I just need about $100,000 to make it a go. My father-in-law has access to that kind of money. The problem is, I have no idea how to approach him.
Brandon

Dear Brandon,
Entrepreneurs are optimistic by nature, but it’s important to look at the downside risk as well as the upside potential, and let’s face it: there’s an inherent risk in borrowing money from in-laws. So first you need to ask yourself, What would happen if I lost all the money? If the loss would have serious personal ramifications, I’d look elsewhere. Business failure is tough enough without adding family trouble into the mix. But if losing the money would have no effect on your in-laws’ lives, if your family wouldn’t be torn apart, then it should be easy to approach your father-in-law. Just lay your cards on the table. Tell him you think your plan will work, but if it doesn’t, there’s a risk he’ll lose all the money he’s invested. Ask him if he’s interested and assure him that, if he isn’t, there will be no hard feelings. And remember there are other sources of capital around if your in-laws are not an option.
Yours truly, Norm

Permalink  |  Posted in Investors, Revenue, Startups

How do I find investors?

Monday, November 17th, 2008

Dear Norm,
I need your advice about finding investors. If I have no money to put into a business, what else might I be able to contribute as a form of personal equity to woo investors? The only idea I have is to sign a promissory note.
Dave

Dear Dave,
If sweat equity isn’t enough for outside investors, I doubt that a promissory note will do the trick either. You’ll probably have to get some Rolodex funding first. By that, I mean you’ll have to start calling people in your address book, including close friends and relatives. Any money you raise from them will be seen by outside investors as money from you. By asking for money from friends and family, you’ll be taking a risk on your future relationships with them. That counts with outsiders who want to know you’re investing something important besides your time. Yours truly, Norm

Permalink  |  Posted in Investors, Startups

How do I attract customers to my new business?

Monday, November 10th, 2008

Dear Norm,
I’m in the process of opening an educational facility, but I can’t get anybody to sign up. I’ve blanketed fairs and festivals with my information. I’ve run newspaper ads and held open houses. Our prices are lower than our competitors’ and we charge no registration fee, but we have no takers. What else can I do?
Kathy

Dear Kathy,
Never assume a business can’t succeed just because you get nowhere with your initial marketing attempts. I started my messenger company with a mass mailing, offering to do the first five deliveries for free. I got zero response. I was baffled until an office manager told me, “We do dozens of deliveries everyday. Five means nothing. What about the next fifty?” So the market was there. I was just trying to get customers the wrong way. In your case, price is not the main concern of parents. If they’re going to send you their children, they have to know you, trust you, think well of you. I’d try working through community clubs, social groups, churches, and synagogues. Do a brochure with testimonials from local people saying how terrific you are with children. Later on, open houses will be important, and price may become an issue, but first you have to establish your trustworthiness.
Yours truly, Norm

Permalink  |  Posted in Customers, Startups

Should I get a consultant’s advice?

Monday, November 3rd, 2008

Dear Norm,
About a year ago I moved to Florida from the northeast, where I had owned a few photo-processing shops. In Florida I bought a commercial-printing business. I’ve been putting in eighty-hour weeks, learning the basics. Now I’m ready to start advertising, but I’m worried about making a major mistake, especially when it comes to pricing. Should I hire a consultant to advise me?
Sam

Dear Sam,
I certainly wouldn’t. You have business experience, and your instincts are better than those of any consultant you can find. Besides, you probably wouldn’t—and shouldn’t—follow a consultant’s advice if you don’t agree with it. So why pay somebody to give you advice that you won’t listen to if it’s different from what you think? Instead, I’d research the industry. Find out who your competitors are, what they’re charging, what kind of quality and service they offer, and so on. Then make your own call.
Yours truly, Norm

Permalink  |  Posted in Startups

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