Table of Contents
  1. Know Yourself
  2. Plan Your Business
  3. Finance For The Long Term
  4. Balance Your Books
  5. Practice Good Management
  6. Know Your Market
  7. Hire The Right People
  8. Choosing The Right Location
  9. Quality & Customer Service
  10. Don't Be Afraid To Ask For Help
  11. Technology - Key To Future Success

Many people fantasize at one time or another about going into business and being their own boss. Now a growing number of Americans are turning that fantasy into a reality. In an economic climate that encourages and nurtures entrepreneurship, hundreds of thousands of corporate executives, MBAs, retirees and individuals interested in a career change are striking off on their own. And as owners of small businesses, they are creating a dynamic force that is revolutionizing business as we have known it in this country.

The total number of non-farm businesses (including self-employed individuals and part -time entrepreneurs) reached 20 million in 1990 - up 54 percent since 1980. And the U.S. Small Business Administration reports that small businesses account for 58 percent of the private U.S. workforce and 40 percent of the gross national product. Moreover, a National Science Foundation analysis reveals that small business has been a more prolific source of innovation per research and development dollar than large business.

This new age of the entrepreneur is also an age of opportunity. For example, a substantial number of today's small business operators are women. By 1987, they controlled 30 percent of the nation's 13.7 million small firms and generated more than $65 billion annually in gross receipts. During the 1980s, women-owned companies increased at twice the rate of male-operated start-ups.

But success is far from automatic. Starting a small business is risky, and the odds of succeeding are daunting. According to the SBA, only 50 percent of small businesses survive their first year of operation. By the tenth year, between 80 and 90 percent have failed.

These figures aren't intended to scare you, but rather prepare you for the sometimes rocky path that lies ahead. Underestimating the difficulties inherent in running a business is one of the biggest obstacles entrepreneurs face.

However, chances of surviving and prospering are greatly increased if you are patient, willing to work hard, and take all the necessary steps. The following 11 subjects, gathered from a variety of experts, are the most important ones for new business owners to consider. Not heeding them is often the reason entrepreneurs spend so much time climbing out of the holes they've dug rather than scaling the ladder of success.

1 - Know Yourself

Not everyone is cut out to be an entrepreneur. It takes a special talent. Some owners of small businesses have it and some don't. Before investing time, energy, money and a piece of your heart, it's important to do some serious self-analysis. Answer such questions as: Am I prepared to work hard and make sacrifices? Am I self-disciplined? Do I have management ability? Am I experienced enough in this field? What do I want out of life? Are my goals realistic and attainable?

Studies have shown that successful entrepreneurs share certain characteristics including an overpowering need to achieve. Entrepreneurs tend to be more creative and innovative than the average person. They are self-confident and not easily defeated. They also thrive in a challenging environment and have a tremendous need to be in control. They are risk takers. They welcome responsibility, and are willing and able to make decisions. In addition, they are able to learn from their mistakes.

Successful entrepreneurs possess an optimistic and cooperative outlook, and usually get along well with people. They have well developed oral and written communication skills, and overall technical knowledge of the goods or services they produce.

Moreover, successful entrepreneurs are patient and able to wait out the sometimes slow beginnings of a business. They devote countless hours to their endeavor, often at the expense of family and friends. Entrepreneurs, in short, are often termed "workaholics." They will continue to work despite headaches or other ailments which might keep others away from the job.

According to Rod Beck, chief of administration for California's Office of the Small Business Advocate, entrepreneurs share another common trait as well. "In addition to desiring independence at all costs," he claims, "they have observed what other business owners are doing, and feel convinced they can do it better."

Take a good look. Do those traits describe you? "Know yourself and be willing to work 60 hours a week. Starting a business is one of life's biggest commitments," advises Roy Nordman, director of the Emerging Business Services Practice for the San Francisco office of Coopers & Lybrand.

Small business owner Nancy Wansick of Wansick Graphics echoes those sentiments: "My business has become my whole life. Day becomes night and work has become play."

One thing is obvious: you have to love your work. And if you choose a business that meshes with your personality, those extra hours spent won't be as difficult. The key is to identify what you enjoy doing the most, and then find a business opportunity that makes use of skills and interests.

2 - Plan Your Business

After deciding to start or expand your business, it's critical to take the necessary time to formulate a realistic path for yourself. In an increasing competitive world where businesses face an uphill battle, planning helps minimize the risks involved.

A Harvard University study showed that the amount of time spent in planning a business is directly related to its success.

Owners spending six months or less ended up with an 80 percent failure rate. Those who took a year or more to plan ended up with an 80 percent success rate.

Many new entrepreneurs don't realize the business plan is perhaps the most crucial document to develop during the planning stage because it tells a complete story about their business. A well-prepared and comprehensive business plan (updated every six months) serves several purposes.

Business plans are not all the same. They vary depending on the type and size of the enterprise. However, all plans should be organized into distinct sections as shown on page 6 under "Business Plan Checklist." If you need assistance in preparing your business plan, the Service Corps of Retired Executives (SCORE) is an organization of skilled professionals who will counsel you free of charge. Or you may decide to hire a consultant. However, even if you turn to outside help, you should be completely familiar with every detail of your plan, because at some point you will have to meet with prospective lenders. Your knowledge and understanding of the plan will influence their decision.

In summary, the importance of a business plan is not just the written document itself, but rather the process and thinking involved in developing it. Many owners will argue that the marketplace changes too fast for a business plan to be useful, or that they are too busy running the venture to prepare one. While many owners are reluctant to invest the necessary effort to put down the details in writing, the time is well spent if the business grows and prospers as a result.

One final word of advice from Marty Rabkin, the principal of VTR Associates, a Berkeley- based firm that consults with new business startups: "After preparing your plan, have at least two other individuals review it. They should understand lending and investments and be able to give you constructive suggestions. That way, if your plan needs work, you can revise it before submitting it to lenders."


"The most hazardous period for a new business is the first two years due to insufficient working capital," says Bernard Schnitzer, a counselor at SCORE.

One of the major causes of small business failure is inadequate start-up financing. Before you open for business, it is critical to determine how much cash you will need. Many over-eager entrepreneurs start operations without adequate capital to sustain them and their business until profits begin to roll in which is typically three to six months. They have only enough money for a few months' rent, some equipment and minimum inventory. Many experts advise having at least a 12-month financial cushion to handle all business and personal expenses. This will allow you to remain self-sufficient and minimize the risks should your endeavor prove unprofitable.

Prior to starting out, carefully review your total financial needs. The checklist entitled "How Much Money Do You Need?" should assist you in this evaluation process. Don't forget to add in the additional funds that will be necessary for personal and living expenses. Some examples include mortgage or rent payments, medical and insurance costs, entertainment, food, clothing, utilities and transportation.

Equally important is the preparation of a cash budget. This analysis forces the entrepreneur to think ahead by estimating the firm's income and expenses. It will also warn you about possible deficits that could require additional funding. By carefully projecting your financial needs, you can avoid some of the crises that would otherwise arise from a shortage of funds in the future.

While new business owners will not have actuals for various budget categories, they can approximate operating expenses with a little investigation. For example, talking to other business owners can help pinpoint tax, utility and trash removal charges, while a real estate agent can project rental costs. In addition, most professions, industries, and trades have organizations that can provide averages for both income and expenses.

Once you have estimated your present and future financial needs, you may realize you need to seek outside financing. There are a number of sources available to the small business owner besides partners, family and friends. For the vast majority of businesses, loan financing comes from the private sector through banks, savings and loans and other financial services institutions.

The government is a secondary source of assistance, primarily through the U.S. Small Business Administration's Loan Guarantee Program. Other financing alternatives include local government programs, and venture capitalists - wealthy individuals and firms which make their money as investors. Some entrepreneurs borrow against their life insurance policies.

Before filling out a loan request - no matter who the prospective lender is find out what documentation is required. Finally, borrow carefully. As one small business owner advises, "Having financing is critical during the growth phases. But be careful not to overextend yourself.


Experts agree that a comprehensive and understandable bookkeeping system is one of the most basic requirements of a successful business. While very few entrepreneurs enjoy the number- crunching aspects of running an operation, a simple system can be maintained with a minimum amount of time and effort. And the results are well worth the expenditure. For good records will provide the critical information you need to determine how your business is functioning. They will also assist you in making better short-and long-term decisions.

One small business owner realized that vision, optimism and a willingness to work hard were key to the success of her venture, but also discovered that attention to the balance sheets was equally vital. "It took me a while to learn it," she explains, "but you really have to run a business by the numbers." And you can't run a business by the numbers without an adequate accounting system to use as a management tool.

To begin with, your books should include accurate and thorough statements of sales and operating results, fixed and variable costs, profit and loss, inventory levels, and credit and collection totals. Also needed are tax returns and reports to regulatory agencies, and comparisons of current data with prior years' operating results as well as budgeted goals.

In addition, you should track daily cash receipts and credit sales, expenses and inventory received, and employee expenses including pay and deductions.

A good record-keeping system should be easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis.

There are two methods of accounting: cash and accrual. Using the cash method, income is reported the same year it is received, and expenses deducted the same year they are paid. With accrual accounting, income is reported the same year it is earned, even if it hasn't been received. In most cases, the method you choose for accounting will also be used for tax purposes.

Due to its simplicity, cash basis accounting is generally used by sole proprietorships and partnerships unless inventory is involved, in which case the IRS mandates use of the accrual method. Most corporations use the accrual method.

To determine which system is preferable, or required, for your business, it is best to consult with a financial advisor or public accountant.

Once you have done so, a number of options exist to ensure that your accounting gets done accurately. These options include:

5 - Practice good management

According to the U.S. Small Business Administration, poor management is the greatest single cause of business failure. Management of a business encompasses a number of activities: organizing, planning, controlling, directing and communicating. Most business failures aren't the result of bad economic times; rather, they stem from improper management. The cardinal rule of small business management is to know exactly where you stand at all times.

Some of the more common mistakes managers make include:

In a large company, a bad month in one division can be offset by other divisions. In a small firm, in contrast, there's nothing else on which to fall back, so a bad week can be fatal. Managing a small company means staying on top of key aspects of the operation so you can react instantly and decisively when problems arise.

However, bad management isn't limited to poor economic periods. It can happen even when the climate is positive. Some management consultants who work with small businesses confirm that over expanding, hiring weak personnel and being overconfident are frequent management mistakes that occur when times are good.

Along with those is the inability to handle growth. "If the business is successful, it takes on a life of its own," says one owner. You become a "situation manager" rather than just a people or business manager. Suddenly, you are trying to balance opportunities, investments and energy.

Whether times are good or bad, the successful manager is the one who remains calm and confident and who turns adversity into opportunity. In addition to seizing short-term opportunities, the ability to plan for the long term is also crucial. This involves being aware of subtle shifts such as increased competition, a change in area demographics, products which no longer meet customer needs and inadequate technology. This continual analysis and planning process allows the owner to reevaluate what the firm is doing, what prospects can be developed, and what actions need to be taken to strengthen the company position over time.

In addition, a successful manager must also be a good leader. Many experts claim leadership is a form of behavior which includes persuading, inducing, guiding and motivating. They believe a well-rounded leader is a master of certain skills which can create a climate that encourages productivity and directs and controls employees' activities.

Very often, leadership style reflects an individual's personality. However, what works well with one group or individual may not work as well with the next. As a result, good leadership requires a flexible approach that is based on the people involved and the situation at hand.

Advises one small business owner, "Surround yourself with competent people, then train them and learn to delegate." And when you do delegate, keep the following tips in mind:

"Delegation is an issue of trust," says another owner. "But it cuts both ways. You can't get someone to trust you unless you trust them, too."

A final note of advice: not all owners are necessarily good managers. If you feel you lack the necessary managerial or leadership skills, the wisest move you can make is to bring someone on board who can better fulfill this function in the interests of the business overall.


Marketing is the complex process of creating customers for your products or services. Finding and keeping customers is a way of thinking - of doing business - that is close to the heart of every successful entrepreneur. It involves knowing and reaching out to customers, listening very carefully to their needs and preferences - and complaints - and acting to service them better and better every time.

A sound marketing plan is key to the success of your venture. It helps you manage the process of creating customers, including the action steps needed to make the plan work. Before developing a plan, however, you must do your homework. Effective marketing, planning and promotion begin with gathering factual information about the marketplace. Visit your local library, talk to customers, study the advertising of other businesses in your community (including that of your competition), and consult with related industry associations.

Answers to the following series of questions comprise critical components of your marketing plan.

1. Marketing Overview

2. Products and Services

3. Customers and Prospects

4. Competitive Analysis

5. Price, Location and Sales Practices

6. Strengths and Weaknesses

The final component in your marketing plan should be your overall promotional objectives: to communicate your message, create an awareness of your product or service, motivate customers to buy and increase sales. Defining objectives makes it easier to design a successful promotional campaign, choose the methods that will be most effective, and keep that campaign on the right track.

7. Advertising and Promotion

8. Long-Term Strategic Marketing

The essential element underlying effective marketing efforts is targeting. That is, making sure your message reaches the people you want to attract to your business' products or services. Today's marketplace is too fragmented and diffused to reach everyone without the expenditure of vast amounts of money, which small businesses certainly cannot afford - nor do they need - to spend.

A long-time entrepreneur affirms the importance of targeting: "Before, we always tried to get everybody and their brother to buy from us. Needless to say, that approach didn't work. Then we developed a marketing plan that zeroed in on a specific geographic area, and it brought in all the business we hoped for."

7 - Hire the Right People

Employees are one of the most valuable assets your business can have. Their cooperation, enthusiasm and well-being can make the difference between a mediocre or an outstanding business. Untrained unmotivated employees can cause a business to fail just as surely as strong competition or economic downturns. It's absolutely imperative that you carefully plan the staffing needs of your company.

Two of the most critical points to be considered in terms of employees are productivity and trust. Productivity equates to how much is produced for every dollar you spend on labor. Too many owners think about what they pay in wages, rather than how much useful work their dollars will buy.

The second key point is trust. One basic reason otherwise successful businesses remain small is that their owners can't bring themselves to trust other people enough to give them authority and power. Three secrets to trust are believing in yourself, taking the necessary time to recruit and hire diligently, and making responsibility a part of every job - even the most menial. If you do these three things, your employees will continually grow in their abilities, and learn to handle major responsibilities more readily.

The hiring process should not be haphazard. Before you begin, carefully analyze your business needs and write down the specific duties for each new employee you think is required. Also determine what you are willing to pay in salary and benefits. Going through this process enables you to clarify and prioritize the skills, experience and qualities you are seeking.

Be careful not to "over specify" the position. By imposing too many specifications, you might limit the type and number of resumes you receive. Whenever possible, remove any qualifications that are not absolutely necessary to perform the job, and ask yourself where you would compromise if you had to. All too often entrepreneurs hire people who have skills identical to their own, rather than those with complementary skills. This type of repetition can be particularly detrimental to small operations. Also be sure to determine if you actually need to hire any new fulltime employees. There may be more effective and efficient ways to get the job done, such as buying a computer software program to help with accounting functions, or contracting out for phone answering or janitorial needs. Use of freelancers and/or independent contractors is another possibility, as is hiring short-term temporary workers.

If you haven't already formulated a personnel policy, now is the time. You need to consider the number of hours to be worked each week, the number of days per week, holiday work and the time and method for overtime pay; fringe benefits; vacation and sick leave; time off for personal needs; training; retirement; a grievance procedure; performance review and promotion; and termination.

There are a number of sources to which you can turn for job candidates: classified advertising in newspapers and magazines, private employment agencies, temporary agencies (for short-notice or seasonal needs), state employment agencies, labor unions, schools, community organizations, former employees or friends and family.

Once you've narrowed the field of candidates, it's time to set up interviews, which are critical to the selection process. Ineffective or inexperienced interviewers are usually marked by four main failures: not spending enough time analyzing the job they are trying to fill; failing to ask the right questions to determine a candidate's strengths and weaknesses; talking too much during the interview; and overly trusting their gut reaction rather than evaluating candidates objectively against the criteria they've established for the job.

Keep in mind that any person's potential for success in a given job is a function of three factors. The first is their ability (the "able to" factor). The second is their job knowledge (the "how to" factor), resulting from a candidate's education, training and experience. Don't be reluctant to ask candidates what they have done, and how well they did it. Ask about their successes and the problems they've faced. Ask for references and call them. Verify education and training as well.

The third factor is their motivation (the "want to" component). Motivation is based on what an employee gets from performing the job. And while salary is important to performance, it's not everything. The best employees are those who enjoy what they do. Your task in hiring is to find people who want and like to do the job for which you are hiring them.

When interviewing, it is also important to know the laws related to job discrimination. According to one expert, there are two simple rules that determine whether or not to ask a question:

  1. Is it job related? If it isn't, don't ask.
  2. Is the question presented only to a specific type of candidate? If it is, don't ask.

Once you have selected your new employee, the next step is to create a good working relationship. Open-mindedness, patience, communication skills and willingness to listen play a vital role in the development of such relationships. Another tried-and-true standby is positive reinforcement of desired behavior, from a simple "thank you" or praise for a job well done, to asking for employees' advice or opinion, or giving them a choice of work assignments or time off with pay.

One key to motivating and retaining good employees is to be a good manager yourself. The people at the top of an organization set the tone. Be sensitive to your employees' needs. Learn where you can be flexible in order to accommodate employees and enhance their job satisfaction. Create an environment where every person feels an important member of the group.

Although you are careful to hire the right people for the job, and are working hard to form rewarding relationships with your employees, you can still be subject to problems. That is the nature of business. Often the ones you experience mirror those of society in general.

One problem currently facing employers is drug and alcohol abuse, which is costing American business about $100 billion a year in lost production. While many large companies have set up in-house programs to help employees with substance abuse, such programs are too expensive for the small business owner. You can begin by writing out a policy statement concerning drug and alcohol use at work. The policy should state plainly that drug and alcohol use on the job is forbidden, and that violation of this policy is grounds for disciplinary action, including dismissal.

To aid troubled employees directly, you may want to investigate outside employee assistance programs (EAPs), which offer workers a place they can go for help for personal problems, including alcohol and drug abuse. These programs provide confidential counseling and can refer employees to specialists, if needed. The cost is usually several dollars a month per employee. If no such provider is available in the area, you may want to join with other local companies to create an EAP together. In some cases, outside employee assistance programs encourage more people to seek help and minimize the role the company plays in resolving employees' personal problems.

Once you have found a suitable EAP, make it an attractive alternative. Stress that you are implementing the program to keep people on the job, not as an excuse to fire them.

The success of your business depends on a large extent on your employees. And similar to a good marriage or friendship, the relationship between you and your employees should be a two- way street. Communication, trust and commitment are critical. If you want those relationships to last a long time, you must be willing to work hard to make them grow.


Choosing the location for your business is as crucial as deciding what product or service you will provide. Stories abound of entrepreneurs who selected or purchased a site without thorough investigation only to later discover the neighborhood was deteriorating, road or traffic patterns were being changed, the previous owner did not have clear title to the land, the site was polluted or a competitor was moving in next door - conditions which would adversely impact their business. It's extremely important not to rush the selection process and, if necessary, to use the services of a specialist in this area to assist you.

Your choice of a location will depend on your type of business, as well as who and where your customers are. For example, retail stores and restaurants (where location, location and location have been called the three most critical factors for success) have to be situated very near to their customers. Other considerations include the volume of pedestrian and vehicular traffic, parking availability, public transportation, the compatibility of neighboring businesses and the building itself.

Many business areas, from neighborhood trip centers (ventures clustered on the same street) to shopping malls, have anchor stores. These are large retailers such as department stores and supermarkets which attract a large, loyal customer base through reputation and heavy advertising. Smaller establishments often do well being located near these high-volume operations.

Service businesses operating out of storefronts that depend on foot or drive-by traffic, such as dry cleaners and shoe repair shops, should be situated where customers are going to pass them on a regular basis. Other service operations that are more personal in nature such as beauty parlors, health clubs or automobile repair shops can cultivate a base of steady clients who are willing to go out of their way. Also, whenever services are performed at the client's home or place of work, such as extermination and carpet cleaning, the company site is relatively unimportant.

If establishing a manufacturing, wholesaling or industrial supply business, make sure the site allows room for future expansion. Also consider taking an option for additional space. Choose a location that is relatively convenient for your employees, and accessible by car or public transportation. Many plants in out-of-the- way locations have difficulty retaining employees.

If your operation has heavy electrical power requirements, verify that these services are available since the line-work needed to provide additional electrical service can be costly. Also be sure to check the availability of freight, express and parcel delivery services so you won't have to pick up and deliver materials. If your facility is above or below the ground floor, investigate the condition and load capacity of the freight elevator. This is especially important if the total weight of all your equipment and materials is excessive.

In addition to these industry-specific considerations, certain basic items must be taken into account when selecting any new location. If you are renting, try to talk with former tenants and ask why they moved. Meet with other shopkeepers and learn as much as you can about the area and its customers. Be careful if you see numerous unoccupied buildings for rent or sale, as this could signal that the area is undergoing an economic downturn.

Also pay close attention to the zoning, building and fire codes of the locations in which you are interested. Make certain there are no present violations, or likely future conflicts with your business operations. The same concern also applies to electrical and plumbing codes.

Have both your lawyer and insurance agent review any lease before signing it. Key points include:

Before embarking on a search for the perfect location, outline your present and future needs and then find a site that best meets them. If you require assistance, a business real estate broker can often be helpful. In addition, your local chamber of commerce will be able to answer any questions you may have about the community.


Quality may well be the biggest competitive weapon of the 20th century and beyond. At today's prices, people don't want cars that aren't perfect, toothpaste tubes that leak, houses made with inferior materials, stores with rude employees, or airlines and restaurants that provide poor service. And while most customers don't bother to complain, they simply take their business to other companies which offer the service they expect or products of better quality.

Owners and managers of small, medium and large businesses alike need to understand that quality is more than a buzz word. It has become an imperative. The benefits to companies which embrace it are numerous and far reaching - from fewer product defects to less wasted management time, lower costs and higher customer retention rates.

The dictionary defines quality as "superiority of kind; degree or grade of excellence." As the owner of a business, your first concern should be building quality into your employees, or assisting them to continually strive to improve. Only after the "humanware" is securely in place should other aspects of the business be considered.

Normally, top level managers are concerned with the lofty concept of improvement, while lower level employees spend their entire day following instructions. In this hierarchical environment, a valuable resource is wasted. For many "worker bees" harbor a wealth of knowledge, information and insight about the processes for which they are responsible, the customers with whom they deal, and product/service enhancements that could make a difference.

Tied to the whole issue of quality is customer service. This means understanding what product and service attributes your customers value, why they value them, and how your company measures up against those attributes. It's no longer safe to assume that just because your customer complaints are low, the majority of your deliveries are on time, and your price is competitive that your customers perceive you as a quality- and customer service-focused organization.

One way to help your employees focus on customers and their needs is to have them view each other as internal customers. This means realizing that for whatever jobs they perform, other employees are impacted and impact them - from the chef in the kitchen to the person in the adjoining office, the stock boy, or the next person down an assembly line. Focusing on your internal customers is key to any successful quality/ customer service program, as is the mindset of never being satisfied even when you think things are perfect.

The bottom line in customer service is that it's only as good as the customer says it is. When employees start focusing on how to better meet the needs of their customers, they become more sensitive to the processes they perform and how to improve and/or change them to achieve the results the customer desires.

Building quality into a company also involves changing processes within the organization itself. It entails managers ceding some power and responsibility to fellow workers who can do the most about improving the business operations. It means giving employees the authority to satisfy customers' needs. Finally, it includes eliminating unnecessary steps in the approval processes that impede production, delivery or the processing itself. Basically, quality means pushing the decision making down into the ranks to the people who can make the biggest difference.

This entire scenario understandably creates risk and uncertainty for the manager who has not been trained or mentored to encourage such employee behavior. The CEO as coach/trainer must ensure that managers and employees do not become paralyzed by a desire for perfection and certainty of accountability. Training people at all levels of the business is key to the success of this approach.

This approach to operating your business can improve morale and productivity by making workers' jobs more meaningful, reduce costly supervision and inspections, and provide more time for strategic planning. In addition, a reduction of unnecessary processing stages and layers of approval diminishes cycle time, lessens the possibility of errors, and allows you to deliver products or service at a faster rate to the marketplace.

It makes far more sense to build in quality during development and production, rather than after completion when making changes is costly and frequently delays meeting customer needs in a timely fashion. Partnering also helps eliminate the adversarial relationships that frequently develop in a business. Weaving quality and customer service into every fiber of the company can be the key to improved competitiveness and growth, and will provide that long-term edge in distinguishing your company or brand from the competition.


Turning to outside specialists to help avoid or solve problems is standard operating procedure for large companies. Yet with the exception of accountants and attorneys, many small business owners avoid using consultants, and thereby deny themselves valuable and timely advice.

The problem many entrepreneurs face is how to afford professional help at the point when their need is greatest: usually when their financial resources are most limited. But advice need not be expensive. In addition to professional consultants, sources of assistance include chambers of commerce, trade associations, specialty newsletters and magazines, and business libraries, to name a few. Moreover, chambers of commerce and many financial institutions publish how-to books for a small fee or just for the asking.

Most important, consultants say, is knowing what kind of help you need, and then getting it early enough.

"It's a shame more small businesses don't tap into the resources of a professional to help them realize their full potential," notes Howard Cohen, economist and chartered accountant in Tiburon, California.

Urges Dale Morseman, owner of Industrial Graphic Arts in Concord, California, "Gather advice from all available sources, particularly business and trade associations. When you have questions or problems outside your area of expertise, seek professional help."

Experts also recommend the appointment of an active outside board of directors or advisors with whom you meet regularly. A board can provide objectivity, install business performance accountability, and establish a valuable method of monitoring progress. Boards are most valuable when they contain directors carefully selected for expertise and skills that complement the given business.

The resources don't end there. Free counseling and workshops are also available through Small Business Development Centers, the U.S. Small Business Administration and SCORE, its volunteer arm. SCORE is staffed by experts in a wide variety of fields who have had successful careers of their own. SCORE counselors appreciate what small business means, and want to share their experiences and knowledge with any entrepreneur who needs help. The organization also publishes a number of practical guides and handbooks.

(See "Consultants and Your Business" in Volume IV of Small Business Success for more detailed information on finding the right consultants for your company.)


Among the many subjects small business owners must tackle, perhaps none is more daunting than technology - a word that encompasses a full spectrum of equipment that can radically alter a company's efficiency and productivity.

On the one hand, technology is seen by the uninitiated as a complex array of options that are difficult enough to understand, much less to master. Those at the other end of the spectrum imbue technology with the magical ability to revitalize a company, cut costs, and resolve problems ranging from personnel to product quality. Most people fall within these two extremes, having embraced technology to some extent, but still not tapping its full potential.

Just as each business is different, so is the degree to which automation makes sense. Certainly the needs of a home-based or several- person venture are not the same as those of a larger firm which relies heavily on the inputting of massive amounts of data, or which requires extensive inventory tracking. Yet no matter what an enterprise's size or scope, the technological tools available on the market today (ranging from phone systems to fax machines, computer hardware and software, paging systems and cellular phones) can help it run immeasurably more smoothly. These tools also help to maximize what is perhaps today's most valuable commodity - time.

One key point should be kept in mind when deciding to what extent to automate your business. There is no single answer that is "right" for everyone. Before any investment is made, it's crucial to identify your endeavor's specific needs and tailor the solution accordingly. Too much time and money rest on the outcome to undertake this process lightly, or without enough research. And, while problems will likely arise at some point in the process - be it technical difficulties or internal resistance to change - the long-term benefits far outweigh any short-term obstacles. For utilizing technology to increase the capabilities of your business is key to enhancing your competitive position in today's marketplace.

According to Lynn Brady, vice president, chief financial officer Finance & Information Systems at Pacific Bell Directory: "Many small firms that do not learn to implement the best technology, particularly in the areas of computers and telecommunications, will see larger companies gain competitive advantages that will allow them to lower costs, adjust prices, and take a larger share of the product or service market. Even a two or three percent cost advantage is sufficient to guarantee market erosion."

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