Nine Questions to Ask Before Starting Your Own Business

Owning your own business sounds exciting, but is it really for you?  You might be a frustrated job-seeker, someone who is not happy in their current job, or a person who has a great idea for a business. And entrepreneurship sounds like a good way to build wealth and do something you love without answering to someone else.  But it’s also a huge financial gamble, and not everyone is cut out for the entrepreneurial lifestyle.  Here are nine questions to ask yourself before setting off on your own:

1. Are you comfortable operating without an established “Gameplan”?  No one is going to hand you an employee manual, so be prepared to make a lot of decisions about the day-to-day and long-term affairs of your company with very little guidance from others.
2. Are you willing and able to bear great financial risk?  Statistics show that less than half of small business start-ups make it four years or more.  So, be sure that you can afford to lose your start-up capital, as well as the  salary you will likely give up during the early years of your new business as it grows and demands more capital for growth.
3. Are you willing to work hard for many years?  Entrepreneurs are likely to work 60+ hours per week, and will forego time off from the business until their business is on sound footing.  Even if you can afford to get away, you likely will wear many hats in your business and it will be difficult t find anyone to fill in for you.
4. Are you passionate about your venture?  Don’t go into business for yourself simply to make money or because you have no other alternatives.  Make sure you love the business and that you are fully committed to your product(s) and/or service(s).  The commitment to owning your own business is simply not worth it if the passion is not there.
5. In the past, have you been able to convert ideas into action?  Ask a friend this question, in addition to reviewing your resume to see if you’ve exhibited leadership qualities in the past.  Good ideas are no good to a business if they can’t be converted to profit.
6. Are you willing to tackle all aspects of running a business?  You will be doing everything in your business from bookkeeping, to marketing, to the mechanics of operating equipment.  Be sure that you are comfortable with this and, if not, recognize that you will have to hire someone to handle the details of what you can’t or aren’t willing to do.
7. How are your written and oral communication skills?  You will have to persuade investors, suppliers, buyers, and employees to work with you, so make sure you feel comfortable in this role.
8. Can you face discouragement without giving up?  Entrepreneurs need to be able to face rejection and disappointment with optimism and courage, as well as with the ability to think creatively about roadblocks they will face in their business.
9. Is your family willing to sacrifice as much as you are?  You will be devoting a lot of time and money to your venture, so be sure that your spouse or significant other, as well as your kids, are on board with this and willing to support you in your endeavors.

If, after thinking about these things, you are still committed to venturing out on your own, then GREAT!  Move ahead with your ideas and create a fabulous business plan.  And be sure and stop in to Citizens Bank Minnesota, and let us help you realize your dreams!

Submitted by: Julie Baumgartner, Vice President

Four Tips for Building the Better Business Plan

Are you thinking about starting a business?  Whether you like it or not, it’s important that you create a business plan.  Why?  A written business plan helps you to think through your business ideas so that you see the weaknesses and strengths of your venture more clearly—and it gives you the opportunity to address any concerns ahead of time.  Plus, you can use your plan when meeting with advisors, business partners, banks, and more so they can objectively and constructively help you with your business.  

Here are four tips for building the better business plan:

Be thorough.  Cover all of the details of your start-up business.  Go to http:///www.citizensmn.com/business/getting-started/how-to-prepare-a-business-plan.html for additional information on this topic.

Use candor.  Don’t idealize your circumstances.  Be forthright and identify your critical factors for success.  Don’t be afraid to identify your weaknesses, and then address how you plan to overcome those weaknesses.

Be conservative and identify contingency plans.  Everyone knows that projecting sales in the first year is difficult.  Thus, identify your assumptions, and perhaps show “worst case”, “best case”, and “most likely” case scenarios, and how you will succeed in all three cases.

Make the case for why your product/service will be successful.  Why will the market change its behavior and buy from you vs. what it is currently doing?  This is a critical question that is often overlooked.

Finally, don’t forget to pull your initial business plan out frequently during your first year or two in business.  Use it to perform a “check-up” on how you’re doing, and to make sure that you haven’t overlooked any strategies for success.  

 By: Julie Baumgartner, Vice President

Marketing On A Shoestring Budget

Give Your Customers ‘Over The Top’ Service To Gain More Business, Loyalty and Referrals

Do your customers love you?  You may think that is a silly question…but, think of the last time you did business with someone who really irritated you….not a pleasant memory and you probably didn’t go back.  Now think of a time when you had superb service that was above and beyond your expectations….different story, right?  You probably told everyone you know, or they earned more of your business, or you may have even referred them to a friend or family member because you were so pleased.  Times are tight and most businesses don’t have tons of money to throw at expensive advertising or marketing trinkets!   In this downturn economy every business needs to create WOW! Customer Service Experiences to get ahead.  The great news is the cost can be very minimal or absolutely nothing! 

Saying you have good customer service isn’t good enough.  Can you readily list the WOW! Experiences you are creating today for your customers on a regular basis?  If so, you are off to a great start!  Think of all those times you have contact with a client…answering the phone, greeting them when they walk in the door, assisting them with a sale or handling a complaint or mistake.  Next, ask yourself, “What extra steps are you taking to make your clients feel like royalty, like they really matter?”….because they do!  You know the old saying, “take care of your customers or someone else will!”    

Steps to Creating WOW Experiences For Customers

• Have a can-do positive attitude toward your customers and staff.
• Really hear what they are saying.
• Rattle and revive your customer service standards and make them WOW! Moments for your customers, such as inventing a new way to greet customers as they walk in the door or answer the phone in a way that will make your customers smile instantly.
• Train employees on those WOW! Moments and watch carefully to make sure they are following through. 
• Remember people like to have fun!
• Send out a survey to customers asking for honest feedback about what they love about you and what needs improvement…then listen to the feedback and change what needs to be changed!
• Train your employees on how to handle complaints with finesse.  Empower your employees to make the situation better for the customer without having to jump a bunch of hoops.   

Always remember – “The Customer is King” and “There Are No Traffic Jams on The Extra Mile” 

Now…go out and love your customers! 

My Best,

Jean Geistfeld, Marketing Director

An Economic Downturn Can Be a Great Time to Start a Business

Really?  It sounds strange, but think about it. 

• Costs are lower.
• More workers are available and looking for work.
• Potential customers are looking to cut costs and are more likely to give a new supplier a try.
• The competition is likely focused internally on cutting costs themselves, and perhaps not giving much effort to marketing.

The one difficulty left to face is . . . . capital.  

Lenders and investors are very careful about who and what they invest in during a downturn.  You may have a savings account, a home equity line of credit, credit cards, or other sources of cash to start up a business.  This is well and good.  But if capital is short, your plan of attack to attract that capital needs to be a very well prepared business plan.  

Four Ideas For a Better Business Plan 

1. Be Thorough.  Cover all of the details of your start-up business.  Go to http://www.citizensmn.com/business/getting-started/how-to-prepare-a-business-plan.html  for additional information on this topic.  
2. Use Candor.  No one wants to hear that “we are the best” and “everything is wonderful”.  Identify your critical factors for success, and tell why you are uniquely qualified to succeed, even if your future success is based upon past failures.  Don’t be afraid to identify your weaknesses, and how you plan to address those.   
3. Be Conservative and Identify Contingencies.  Everyone knows that initial sales projections are difficult to meet.  Thus, give a solid basis for your underlying assumptions, and show a “worst case”, “best case”, and “most likely” case scenario. 
4.  Make a Case for Why You’ve Built the Better Mousetrap.  In other words, there has to be a reason that the public will change their behavior and buy your product or service over what they are currently doing.  What is that reason?  What will incent customers to use your mousetrap?  Does it solve a problem? What is that problem? 

For Further Reading 

These related books will inspire you to find your niche and transform your business into something unique and lasting:

• Purple Cow, by Seth Godin.  Transform your business by being remarkable.
• Good to Great, by Jim Collins.  Why some companies make the leap… and others don’t.
• Thank God It’s Monday, by Roxanne Emmerich.  How to create a workplace you and your customers love. 

By: Julie Baumgartner, Vice President

Four Ways for Your Business to Survive and Thrive in a Down Economy

As a business owner, bad news on the economic front causes worry—worry about you and your family, about your business, and about your employees.  Question is, what can you do about it? 

Four Ways to Survive and Thrive in a Downturn

The biggest mistake that business owners make in a downturn is to be overly optimistic and do nothing—to simply wait for things to improve.  Oh, you might think that your business is “recession-proof”, or that you are better-prepared than your competitors to weather a downturn.  But are there signs of trouble?  Are incoming orders declining, or are customers lagging behind on payments, or are inventory levels slowly creeping up?  Rather than ignoring these signs, now is the time to really put your ear to the ground and find out what your vendors, suppliers, and customers are saying.  Listen to your front-line employees.  Then:

1.  Begin by building contingency-planning into your business plan.  What if your customer can’t pay that large account receivable on time?  What if your sales staff doesn’t reach established sales goals?  What if that new line of inventory doesn’t sell before you have to make your vendor payment?  Can you stay in compliance with your loan covenants at the bank?  Now is the time to pro-actively enlist the help of your banker and your other advisers–knowing that you are looking ahead and positioning your business for a downturn will give them confidence in you, and they will be more able to help you during difficult times. 

2.  Keep in mind that cash is king, and anything you can do to maximize cash will put your business in a position of strength.  Get rid of slow-moving or obsolete inventory through special sales.  Think of other uses for inventory that might create sales in non-traditional markets.  Monitor your accounts receivable and demand payment on time.  Don’t become your customers’ banker—expanded terms mean expanded risk.  Be prepared to cut off, go COD, or file a mechanic’s lien if necessary, as a customer who is solvent today may be in bankruptcy tomorrow.  And finally, look at your fixed assets with an eye to selling anything that is non-productive.

3.  On the expense side, use a critical eye in determining your cost structure.  Do you have the right people in the right spots?  Are your employees performing at their maximum?  Are you organized properly? Ask your employees to look at their job descriptions and duties—are they doing something because “it’s always been done”, or are there some duties that can be dropped or done more effectively?  Is there duplication of efforts anywhere?  Have your expenses been creeping up?  Find out why.  From this analysis, identify 5-7 expense-reducing opportunities and make them happen.

4.  Identify your most profitable product and service lines, and those with the most potential to grow. Contrary to what many believe, those who thrive in a downturn avoid diversification and, instead, focus intensely on those products and services that make up their core business.  If possible, sell off—for cash—those lines that you don’t feel contribute to your core value as a business.  Save the cash, or use the proceeds to invest in assets that will further what really makes you money.  And for goodness sakes, don’t cut the advertising budget for those revenue lines that will keep you in the industry forefront.

Move Forward Enthusiastically

At this point, make sure your entire workforce is engaged and moving in the same direction—develop a mission and vision to sell the profitable products and services upon which you have built a solid reputation.  Generate enthusiasm for the task at hand—after all, being part of a company that is moving ahead in a downturn vs. simply digging its head in the sand is exciting!  And be sure to celebrate small successes and milestones along the way. 

If you’ve done these things, be assured that you are doing everything you can to survive and thrive in a tough environment.

By: Julie Baumgartner, Vice President