I was recently asked by a reporter: “What are the key ingredients to starting a successful small business?” After much thought, I came up with the following: Planning, adequate capitalization,knowledge and persistence. Twentyfour years of working with Long Island entrepreneurs have demonstrated to me that these are essential ingredients if one wants to create a successful, lasting business. While there are a lot of entrepreneurial dreams out there, dreams don’t pay the rent. A successfully run business requires a realizable dream and the means to implement it. There are guidelines and sources of assistance on Long Island to help provide three of the ingredients (persistence is not something you can contract for - it comes from believing in the dream).
The Small Business Development Centers and Service Corps. Of Retired Executives, along with many accountants, business consultants and financial planners can help you put that business plan together. In that plan, you must anticipate everything that can go right or wrong with the business and have contingency plans in place. Planning involves things like:who’s the targeted market; how will you make the product; who will deliver the service; who will manage the operation; how do you market; inventory control; how to collect moneys due; who are your vendors; how much money is needed to start and get through to break even; where is the money coming from, etc., etc., etc. Adequate capitalization is a must for any start up (and for existing businesses). The rule of thumb on startups is at least one third equity and a lender will consider lending two thirds.
Not only must you anticipate the hardcosts but also the working capital needs until the business generates enough cash flow to break even. Lack of adequate capitalization is one of the main reasons for small business failure. Knowledge is a key element in small business success. The most successful entrepreneurs take the time to learn everything about their business. Even with the best employees, it behooves the owner to know as much and more than them. Knowledge can often be the key to making it in the small business world. And, lenders want to see a business plan that reflects the fact that the entrepreneur knows all he/she needs to know about the business.
More knowledge increases the chance of success. Sound simple? It is not many start up businesses fail within the first year. But chances of making it are greatly increased by the presence of the key ingredients: planning, adequate capitalization, knowledge and the persistence to turn all those ingredients into a successful business.
If you are a woman business owner looking to grow and expand on Long Island or you're thinking about starting your women-owned business, there are numerous resources available to help you as well as lots of successful examples of woman owned businesses which are thriving and growing on Long Island. For more information on resources check out the links section of www.lidc.org