What are the characteristics that make a good entrepreneur? Understanding whether or not you have the personality, the temperament, the support, and the resources to run your own business are an important — and often overlooked — part of developing a business plan, according to Bill Lichtman, CEO and president of the Princeton chapter of SCORE.
Lichtman will present “The Business Plan — A Tool for Funding” on Tuesday, December 14, at 6:30 p.m. at the Lawrence Headquarters Branch of the Mercer County Library. The free seminar will review the basic elements of a business plan, from vision through financials. It will also include a schedule, examples, and an overview of potential sources of financing. Visit www.scoreprinceton.org.
SCORE, the Service Corps of Retired Executives, provides free and confidential business counseling, coaching, and mentoring, tailored toward small businesses. The Princeton chapter has roughly 40 volunteers serving entrepreneurs in Middlesex and Mercer counties.
Lichtman has been an active volunteer with SCORE since the 1990s and has helped prepare business plans for small, medium, large, and start-up companies for decades. An electrical engineer by training, he received his bachelor’s degree from Tufts and his master’s from Brooklyn Polytechnic.
After retiring from corporate life he began a career as a consultant, first in technical fields, but after several years, “I found that I was less interested in keeping up with all the latest technology and more interested in helping people who were starting businesses,” he says. He found that SCORE was an excellent fit. “At SCORE we help hundreds of business owners. That means we are helping to create hundreds of new jobs each month,” he says.
While his seminar will focus on the traditional ingredients of a business plan, such as finding your target market, developing a market plan, and developing a budget and financial plan for the first year of business, it will also focus on the personal characteristics a person needs to start and run a successful business.
#b#Be passionate#/b#. “You have to realize that you are going to be working on your business 110 to 120 percent of the time for the next several years. You had better love what you are doing or you won’t make it,” says Lichtman.
Have the right skills. Of course, a new business owner must have the knowledge and skill to work in the particular industry he has chosen, but he must also have a wide variety of other skills to successfully run a business. “You don’t have to be an expert in everything, but you do need to know enough about these things to hire the right people,” he says.
A few of the areas one needs at least a working familiarity with are accounting and bookkeeping, marketing, sales, and leadership.
Recognize excellence. Whether you are looking for a business expert such as a lawyer or a CPA, or planning to hire your first employee, recognizing people who are also experts in their field and passionate about their work is one of the first steps in making sure that you create a team of people who will help your business to succeed.
#b#Know how to sell#/b#. An important part of every business owner’s job, particularly a start-up business, is salesmanship. “Even if you plan to hire a salesperson, you have to understand that you will also be selling your business — to prospective clients, to investors, to bankers if you need a loan,” Litchman says. “No matter what business you are in, if you plan to be a business owner, you have to sell.”
#b#Get family support#/b#. If your family is not behind you, it will be very difficult for your business to become successful. Support, or the lack of it, can mean many things, Lichtman says. Of course, the breadwinner who quits a job to start a business must have the understanding from family members that financial sacrifices will have to be made, but support is also important for the owner of a second-income business in which the financial effects might not be as great.
“Your family members can’t be interrupting you in the middle of a client meeting to ask you to go pick up the kids or act as a babysitter,” Lichtman says. He recommends having frank discussions with everyone in your family about the time your business will take before you get started.
#b#Have good health#/b#. “Owning a business takes a lot of time and a lot of energy. You have to be generally in good health if you plan to be successful,” says Lichtman. While emergencies do happen, chronic health problems take time. If you do have a health problem, take it into consideration when you are planning your new business.
How much time each month do you need to devote to medical treatments and doctor visits? Are there certain times of the day or the year that you are more likely to have health problems? Are you responsible for caring for a family member with health problems? All of these issues will cut into the time you have to work on your business. If you don’t plan for them ahead of time, they could make it difficult for you to be successful, Lichtman points out.
#b#Have cash flow#/b#. While it may not seem like a “personal characteristic,” having enough financial resources behind you before you begin is one of the big secrets to a successful business. Starting a business takes money. Even if your business plan is service-oriented and requires little investment to start, you will need cash flow to pay your personal bills and to handle business expenses until the new venture begins to pay for itself.
“If you don’t understand the cash flow, if you don’t have what you need to financially take care of yourself and your business you will spend your time focusing on the cash, and not on the business,” says Lichtman. In the end, that is the biggest reason for small business failure, not success.