Oprah Winfrey is worth a cool US$2.9 billion. That, according to Forbes magazine, puts her at number 181 of the 400 richest people in America. Not bad for a self-made small-town girl who started with nothing. There are other women on the rich list, too. And some are very near the top indeed: Christy Walton of retailer Wal-Mart fame is at sixth spot (US$35.5 billion); Jacqueline Mars of confectioner Mars Inc. is at eighth (US$20.5 billion), Abigail Johnson of Fidelity Investments at 23rd (US$17.2 billion); Anne Cox Chambers of Cox Media at 29th (US$13.2 billion). The list goes on. Whether they’re self made or whether they inherited a business and made it bigger, all these enterprising women have one thing in common: Their big businesses were once small businesses.
Why start your own business?
Many women dream of starting their own business. And there are plenty of advantages. Without question, all of the independent businesswomen I’ve met say the same thing: The first and foremost attraction of owning your own business is that you are your own boss. That feeling of empowerment is priceless. Only you decide when, where, how, and with whom you’ll do business. You may have a handful of clients, a dozen, hundreds, or thousands depending on the type of product or service you decide to offer. But you will never, never again be at the mercy of that completely crazy “psycho” in the corner office. As an independent businesswoman, if a client or customer doesn’t pay, treats you as a form of slave labor, or is just plain nuts, you simply stop doing business with them. Period. You have other customers, or you’ll find them.
There are lots of other attractions, too. You get to challenge yourself to produce that product or service that you know no one can do as well as you. You get the satisfaction of filling a need and building an enterprise that, with plenty of grit and determination, will grow large enough that you’ll have to hire people to help you run it. There are tax advantages, too, including lucrative deductions, credits, writeoffs, and income-splitting opportunities.
Last, but not least, you stand a good chance of gaining true financial independence, and perhaps becoming independently wealthy (see above). Yet most of the successful businesswomen who consult with me on financial planning put the possibility of great wealth at the bottom of the list for starting a business. Mostly, it’s about the independence, flexibility, challenge, and let’s face it, exhilaration, of running your own business.
Yes, you can!
Where do you start with a new business? Isn’t it fraught with difficulty? Isn’t the marketplace hugely competitive? Who will ever buy what I’m offering. I’m often asked these questions by aspiring businesswomen, who look first at their bank balances, their apparently intractable responsibilities, their skill level, and wonder if they can ever get a business off the ground. So the first item of business in starting a business is an intangible: confidence. Above all, successful businesspeople are overflowing with confidence. It may be trite. It may be a cliché. But it’s nonetheless true. To start your own business, you have to crush any doubts and trepidation (and there will be plenty of that) with an overwhelming “can-do” attitude.
Most businesswomen I know started by doing what they love to do best. Whether it’s selling real estate, managing investment portfolios, running a bistro-bakery, or selling rare books or baby booties online, they started with something they knew how to do really well or were really good at. A good many had already started small businesses on the side, while working at that drudge day job (see “corner office psycho” above), providing services to friends, relatives, and colleagues part time. With some proven success already in hand, they decided to “go it alone” and make their part-time business their full-time work.
…But not alone
Another common trait of successful businesswomen is that they sought advice and support from their existing network of experienced business or professional colleagues who can offer invaluable insight into the ups and downs of self-employment. They expanded that network to include professional financial planners, accountants, and lawyers who are experts at business planning and financial management.
And networking through like-minded business groups, associations, and professional bodies can provide a goldmine of contacts, marketing know-how, and tricks of the trade to help get your business off the ground and keep it flying.
Money: the two “Cs”
Most small businesses will almost immediately run up against what I call the two “Cs” of money: capital and cash flow. Some small businesses can get started with very little in the way of start-up capital (most any home-office desktop service operation, for example). Some will require more, for manufacturing and marketing a new product, for instance, and for inventory storage, distribution, and so on.
Small businesses with a good idea and not much else have a tough slog ahead of them. So lining up start up seed capital is essential. Most small businesswomen dip into personal savings, apply for bank loans, or approach investors drawn from family and friends, or sometimes those appalling venture capital types (of the sort you see on TV reality shows where the word “shark” or “dragon” figures prominently in the title). Rest assured these people are not representative of all venture investors, many of whom prefer to call themselves “angel” investors.
Even so, in order to really take care of capital and cash flow, you have to have a professional plan – a business plan. This is actually quite a rigorous document (you can find templates at the BDC website) that sets out quite explicitly what you hope to do and how you hope to do it, including research and study of your market, competition, and plans for your marketing, management, operation, and financing. Armed with this, you’ll determine very quickly whether your business is viable and if so, you’ll also have a strong business presentation to make to your bank manager or potential investors.
Starting and running your own successful business is challenging, but it’s also hugely satisfying. As for getting rich…well, there’s always the possibility of that too. Just ask Oprah.
© 2013 by Robyn K. Thompson. All rights reserved. Reproduction without permission prohibited.