If you need a book to handhold you in whether you should start a business you aren't going to make it. Guts and glory. It's hard and you better want it.[/QUOT
"You better want it" is spot on. In fact, I would put it at the top of the list. He better want it so bad, that he?s willing to learn everything he?s going to need to learn, to be successful. That means learning to do the things he?s never had to do before. That means learning, which means reading books, attending workshops, getting a mentor and seeking out what works and what doesn?t work, because he doesn?t know, what he doesn?t know.
If he thinks he?s going to get by on his technical knowledge alone, he?s in for a rude awakening. The fact he?s asking for help developing a business plan is a good sign he?s not, most don?t.
Business isn't hard, it's easy; once you know what you need to do. Here are some things that will lead to failure in the contracting business (or any business for that matter) and will certainly make it ?hard? if ignored.
1. Failure to understand the responsibilities associated with
being a business owner
2. Failure to seek advice/assistance from credible and successful outside resources
3. Failure to hire properly, track and understand employee
performance by providing clearly written systems, procedures and job descriptions
4. Failure to charge correctly, based on your breakeven and desired profit for your services. Failure to implement flat rate pricing and quote work to qualified entities (customers).
5. Failure to understand the cyclical nature of the contracting
business and plan accordingly
6. Failure to build a solid customer base
7. Failure to understand the difference between advertising/ineffective advertising and marketing
8. Failure to focus on your core business
9. Failure to build a reliable resource network (accountants, tax attorneys, business consultants (consultants that have done it successfully), mentors, etc
10. Failure to set goals, properly plan and budget based on your numbers (that means knowing what to do with the plan(s) instead of putting them up on a shelf to collect dust
11. Failure to receive timely monthly financial statements and know what to do with them
12. Failure to implement financial control/discipline by tracking numbers daily, weekly and monthly
13. Failure to understand income statement/financial ratios and what they mean to your business
14. Failure to understand profits and cash flow management
15. Failure to understand the balance sheet
16. Failure to control excessive personal expenditures
17. Failure to understand the need to reinvest capital/replace
assets and avoid being undercapitalized
18. Failure to understand gross profits of different services
19. Failure to safeguard against fraud & implement an HR program
20. Failure to recognize what you?re not good at and hiring people who are
21. Failure to plan an exit strategy and estate planning
Once you completely understand, implement and quantify the above, business is easy.
Fail at any one of these basic business requirements and your right, it can be the hardest thing you ever do in your life; with dire consequences.
