Going From Search to Startup

Starting your own business may be the best option in this market. But there's plenty to plan and think about before the ribbon cutting.

Image: iStockphoto

With grim figures like five unemployed people for every job opening and an economy that’s teetering on the verge of a double-dip recession, the reality facing many of the jobless is this: If they want a job, they have to create it.

Gone are the days of tenaciously haunting an important CEO’s office and charming the exec with quick wit and charisma. In order to start getting money flowing back in rather than out, those who have the stomach for entrepreneurship stand a better chance by creating their own opportunities.

But that doesn’t mean that success will be easy or immediate.

So what are the key items to think about before forging your way ahead?

1. Identify a market need that you’re passionate about. Many an entrepreneur says that getting a business off the ground takes blood, sweat, tears—and many long hours. Sit your family down and let them know your plans, apologize in advance for missing future events, and let them know how much their love and support will come in handy. Next, run your pitch by them. They’re an instant focus group who has your best interests at heart. If there’s a nugget of an idea there, they’ll let you know. If they don’t like the idea, don’t give up. Run it by friends, mentors, and trusted advisers before throwing in the towel.
2. Know your credit score and how much money you can borrow. Nearly every entrepreneur or small-business owner had to start financing a startup out of his or her own pocket. If your credit is good, find out how big a credit line you can take and weigh that against the risk in the industry you’re targeting. If your credit is bad, try micro-financing options, “outbanked” lending, and creative ways to have several people, customers, or groups pool their money together for a loan.
3. Go online. Use free resources like Facebook, Twitter, and LinkedIn to find like-minded people, or reconnect with friends, who can help develop, strengthen, and market your business. Start small. The fewer people involved in the decisionmaking process, the easier it tends to be. But feel free to hire unpaid interns and come up with creative end-of-year compensation or a payment structure that can be implemented as soon as your business turns a profit.
4. Find outside funding to keep growing your business. Unless you’ve got a seemingly endless supply of internal capital, at some point or another you’re going to need to raise more working capital. Now that you’re talking to angel investors, individual investors, and other entrepreneurs, have your patter down. Work on your two-minute elevator pitch and have as much financial information as possible to back up both your valuation claims and revenue projections. This part of the process can take weeks and months. Be patient. And don’t hesitate to turn down an investment if the company or person offering it won’t be a good fit to your fledgling corporate culture.
5. Get out there. Industry and networking events are a must—and are tax deductible. The more people you meet, the more feedback you can get on your product and the more buzz you can generate. If hiring a PR team is in the budget, do it. Having a dedicated person or team to get your message out in a polished way is a plus, but if marketing falls under your job description (after all, who knows your company better than you do?), go on speaking engagements, fight to get on television and radio as an industry expert, and use social-media resources to make sure your company is a relevant part of the industry’s conversation.

Striking out on your own is often a daunting task, even for the born entrepreneur. But if sitting at home and waiting for companies to call with interview dates is simply not an option, starting your own business can be a rewarding experience that can lead to individual success or getting hired by a larger company that sees the value you bring to the marketplace.