As a veteran you have the skills, discipline and work ethic to make you one of the most successful small-business owners in the United States.
It’s never been a better time for you to start your own business. As a veteran you have the skills, discipline and work ethic to make you one of the most successful small-business owners in the United States. In fact, Small Business Notes reports that the success rate for veteran business-owners is higher in comparison to their non-military counterparts.
However, before you jump into the small business arena you need to take some very important steps to build your business. Here are MoneyCentral.com’s tips for starting your own business:
Get some experience
If you've never clocked a day of work in your life, you might consider taking a job before striking out on your own — even if the thought of doing time in a cubicle makes you shudder. Work experience in the field you want to break into may be the most productive use of your energy. Think of it as a paid research position. In a couple of years, you can give your business a go. By then, you'll have learned the ins and outs of the real world and reduced the risk of total inexperience.
Build a winning team
Bring on people who complement your skills and fill in the gaps. Mary Beth Metrey, a 24-year-old Spanish literature master's student at Georgetown University, had always dreamed of opening a boutique, but her short stint in retail didn't provide all of the details of running a shop. But Heather White, her hometown friend from Wyckoff, N.J., had studied fashion design and merchandizing. Naturally, Metrey asked White to be her business partner when she opened her charming new shop, Valise, in Georgetown this spring.
Fight inexperience with advice
Use networking to find great mentors. For example, Military.com’s Veteran Career Network to connect with other veteran business owners in your area. Consulting with mentors can help you develop a business plan or find resources to help you get your business off the ground.
You should also seek out local organizations. This spring, New Yorker Leah Alani, 27, founded SophieSays.com, an online boutique for stationery and gifts for special events. She gained the confidence and the practical skills to accelerate the startup date after taking a four-week class with Ladies Who Launch, which has local chapters in metropolitan areas.
Write a bulletproof business plan
One of the biggest mistakes entrepreneurs make is failing to write a business plan. There is no other single process that can be more useful in beginning business problem-solving than addressing the risks and thoughtfully forecasting by writing the plan. Don't fall into the excuse that you have the business plan in your head.
Not only is it a good planning tool, but a solid business plan is also your key to raising capital -- the money you need to get your show on the road. Although you may not have had time to build a long credit history to show that you are financially responsible, you can demonstrate your penchant for using sound judgment by crafting a document that sells your business and lures financers on board. It's your greatest opportunity to fill the credibility gap.
A business plan will showcase your product or service, how you plan to make a profit and the exceptional team who can bring the business to success. It should include market data and tests to show the service or product will sell, the essential skills that will drive profits, estimates for startup costs, projections for sales and profits, a break-even analysis and long-term goals for the company.
When writing a business plan, you should decide if your business is as sensible or profitable as you originally thought. If it is, the plan has served its purpose. Rather than cost you money and effort, you've spared yourself any loss. Once you've crafted a plan that satisfies you, show it to your mentor and ask for their input on how to improve it.
Raise money
Your business plan should overestimate how much money you will need from the beginning because it's easier to raise money before the launch than it is after you've failed to meet projections. To minimize risk, limit the amount of personal money that you put into the business. Also, you'll be tempted to use credit cards, but credit-card debt is the most expensive debt you can have. Try to steer clear.
Clutching a business plan that sells, go first to a bank to request a loan. "Banks are conservative, and they're still in business," says Robbins. If you have a FICO credit score of 680 or more and you're seeking a loan for less than $50,000, you'll likely be granted the loan, says SCORE's Rudick. Even if the banker can't offer you a loan, ask for his or her advice about how to improve the plan so you can try again.
If your credit history is too short, friends and family may be your best shot. But tread carefully: Set the loan up like a formal business transaction that explicitly states when it will be repaid.
Follow the money
Count on a cash cushion to live on for at least the first six months because you likely won't have an income. Conserve your money before you start. Once the business launches, regularly compare your actual income and expenses to your original forecasts.
And stay focused on your financial goals. One of the biggest causes of failure is diffusion of focus. The first year you should have two main goals: meeting or exceeding your projections and treating your customers right.
