Straight talk about business startups
Published: Wednesday, January 19, 2011 at 9:02 p.m.
Last Modified: Wednesday, January 19, 2011 at 9:02 p.m.
How many times have you dreamed of being your own boss?
I've certainly been to my share of finance conferences where business owners make the audience of wannabe entrepreneurs long for the time when they can set their own hours or answer to no one but themselves.
Oh, there are the cautionary tales every once in a while, but generally the view concerning starting a business is overly rosy.
People are led to believe that if they don't aspire to start their own business, they are not living up to their entrepreneurial potential.
But Melinda F. Emerson, who started her own business after a career in television, is a small-business cheerleader with less cheer and more reality.
Emerson doesn't push entrepreneurship like someone hawking an invention on a late night cable program. Instead, she's a cautious coach.
"If you think you work hard now, just wait until you become your own boss. You will come to know what the word ‘sacrifice' means," Emerson writes in her book "Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business That Works" (Adams Media, $14.95).
I like her cautionary advice and it's why her book is this month's the Color of Money Book Club selection.
When jobs become scarce and layoffs increase, there's often a rise in startups. Nearly 9 percent of job-seekers gaining employment in the second quarter of 2009 did so by starting their own businesses, according to a survey by the outplacement and executive coaching firm Challenger, Gray & Christmas.
But as the current economy has gained strength, business startups have been declining.
Being wary about starting a business is a good thing, says Emerson, the founder and CEO of Quintessence Multimedia, a full-service multimedia production firm.
"Too many entrepreneurs underestimate and romanticize what is required to run a small business," she writes. "Because starting your own business will mean such a radical shift in your lifestyle, you need to think through what this will mean.
Only then are you ready to get into the nitty-gritty of your business planning."
While this book will certainly help people already running their businesses, it's best for those contemplating starting a firm.
To help you get started, Emerson lays out a to-do list. In the first month she urges people to develop a life plan.
And by that she means really spend time figuring out why you want to start a business.
Among other things, think about whether you have the energy for such an endeavor.
If you're married, is your spouse fully supportive? Calculate how long your household can operate without your generating any income.
This first phase isn't the same as a business plan, but rather an examination of how the business will affect your life.
"Everyone has tangible skills, but not everyone has all the skills needed to run a business," she says.
The best advice Emerson gives is to recommend having little to no debt. She also suggests that you have:
Six months of emergency savings.
Twelve months of living expenses (in addition to the emergency savings) to run your household.
The first year of operating expenses for your business.
That's tough advice to follow. But she's right. So many small businesses fail because owners overestimate the income their company will generate in the first year.
Emerson provides basic advice on developing a business plan, a marketing strategy, hiring financial professionals, and finding financing if you need it.
Emerson's road to entrepreneurship is full of encouragement but also much-needed reality checks.
I'll be hosting a live online chat about Emerson's book at noon Eastern Feb. 3 at washingtonpost.com/discussions. Emerson will join me to take your questions.
Every month, I also randomly select readers who will receive a copy of the featured book, donated by the publisher.
For a chance to win a copy of "Become Your Own Boss In 12 Months," e-mail firstname.lastname@example.org with your name and address.
Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her e-mail address is email@example.com. Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible.
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