In any case--whether a business is based on passion or a market
opportunity--starting out with sound advice and a business plan is
a must,
say business advisors. The process of writing and researching a
business plan is useful even for a part-time startup, says Linda
Pinson, author of Anatomy of a Business Plan and co-author
of Steps to Small Business Start-Up.
That's because putting together a business plan teaches the
"business of doing business." "It reveals to [the
entrepreneurs] whether this is a viable business at all,"
Pinson says. "It tells them what their financial opportunities
are, whether the goals are realistic, when to change
gears."
A greater tendency to plan and seek professional help is one
market advantage opportunity-seekers have over their passion-driven
counterparts.
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Layla Masri sees herself as a little of both: As a marketing
professional, she was passionate about the burgeoning potential of
the internet, but she also saw it as a huge business opportunity.
And when she started her Alexandria, Virginia-based website design
firm, Bean
Creative, in 1997, she sought an accountant and lawyer from the
start. Equipped with a business plan and structure, she stayed the
course through lean times and growing pains. "For the first
one and a half years, I was trying to build Bean Creative while
working full time," says Masri, 32. "It didn't give
me a whole lot of time to sleep or have a social life."
When a big client--National Geographic--finally came along, she
tweaked her business plan and changed Bean Creative from a
part-time LLC to an S corporation. Eventually, the company had
enough full-time work for her as president and her husband as vice
president and head of design and programming. Bean Creative now
boasts $1 million in sales and seven employees. In 2003, Masri
bought her own building. The changes weren't so jarring, she
says, because her business plan had called for growth all
along.
"A business plan is not something you write [and] then put
in a drawer somewhere," Pinson says. "A business plan is
a lifetime guide for the small business. It's a guide you
continually use and update."
Find the Pain
Wilson Alers, 47, has always worked in the audiovisual staging
business--setting up stages and theat-rical lighting for corporate
meetings, product launches and celebrity promotions. He decided to
start his own business because his employer had so many unhappy
customers. Alers says he saw his employer "running the
business into the ground," failing to reinvest and making do
with patched-up equipment. "It was frustrating," says
Alers. "I wanted to do things right." So he started
Media Stage
Inc. in 1990 with just two employees. Now the Sunrise,
Florida-based business has grown to 22 employees and $4 million in
annual sales.
Like Cook and his motorcycles, Alers had more than just a
passion for his service--he also had years of experience working
for another company. While the decision to strike out on his own
was done in the heat of the moment, in hindsight, Alers says
he'd also found a great market opportunity. "At the time,
we had just entered the Gulf War, and there was a downturn in the
business outlook." Already-dissatisfied clients looking to
save money were willing to risk their businesses on the
startup.
While he was just following his gut and was sick of dealing with
dissatisfied customers, Alers was also acting on a business tenet:
Find your customer's pain. "Find out what segment of the
market has a problem," says Pinson, "and find out how you
can help them."
Compensate
All in all, experts and entrepreneurs say passion--either for a
product or for business--and following a market opportunity are
both crucial to the startup equation. Those whose strengths lie on
one side need to shore up the other side, either through discipline
or hiring people to help them.
"It's the same way people muster up the discipline to
change a baby's diaper. You're going to do the dirty work
because you love that business so much," Greenstreet says.
"It doesn't matter why you're going into business,
whether it's because you love to be in business or because you
love what you're selling. What matters is [that] you have some
level of passion."
Do it Right
Dos for market
approach:
- Do consider franchising. Franchise
consultants say people looking for market opportunities are
well-suited for franchising.
- Do pay attention to the
"feel" of your business; if you're more of a
behind-the-scenes type, hire a sales force that presents the right
image to customers.
Don'ts for market
approach:
- Don't rely completely on market
research. For instance, if research shows a city doesn't have
many pizza chains, it's not necessarily an opportunity; there
may be so many independent pizzerias that newcomers can't break
into the market.
- Don't get caught up in a fad, which
may fizzle before you're off the ground.
- Don't become a workaholic;
consultants say people who see a great market opportunity should
guard against working day and night to satisfy the market's
need.
Dos for passion
approach:
- Do balance out gut instincts with
market research. That vacant storefront may strike you as a great
location, or your product may seem perfect, but do the research
anyway.
- Do find employees or consultants with
business acumen that you may lack.
- Do take a disciplined approach to
practical tasks such as bookkeeping and maintaining a business plan
and business structure; experts say passionate types tend to
procrastinate on routine tasks.
Don'ts for passion
approach:
- Don't look to franchising if you
want to do things your way. Franchises are proven business models
meant to be replicated exactly.
- Don't focus so much on your product
or service that you forget long-term planning.
- Don't try to go it alone; ask for
advice early on.
Judith
Potwora is an Atlanta-based freelance journalist specializing
in business issues.
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