80% of new businesses fail each year, according to the Small Business Administration. Many of these entrepreneurs lose their life savings, years of hard work, and the dream of being their own boss.
An estate planning attorney once told me that people typically spend more time planning a vacation than they do their financial future. The same can be said for the way most people approach a new business.
There is a very simple step that anyone can take to dramatically reduce the risk of start-up failure. Volunteering, being an intern, or simply working for someone else in the field you'd like to enter will give you the experience you need to become an expert before you open the doors of your own venture.
"I was CEO and dog-washer of a rescue group, and brought greyhounds out to meet the public wherever and whenever I could to find them homes," says Janet Huey who volunteered for 12 years before coming up with the idea for Pet Stuff Resale, which sells sanitized used pet supplies out of several Houston locations. It was because of her familiarity with pets and the rescue community that she came up with a unique and profitable business idea.
Put Your Experience to Work
Not only does becoming an expert in the business you'd like to start makes entrepreneurship a lot less risky. It makes it more likely that you'll enjoy your work than someone who impulsively starts a new business and doesn't realize what difficulties lie ahead.
Here are some of the ways her desire to help a retired racing greyhound find a comfortable couch to call it's own paid off for Janet:
1. Do What You Love for Free to Do What You Love for a Fee
"I had just about given up the idea of making money doing greyhound adoptions," tells Janet. "I was being downsized from my sales position at the Lipton Tea company, and I had to get a job. I started working at a large pet store chain. One day a customer pointed to a travel kennel and asked, 'Do you know where I can buy one of these used?' I started to wonder if selling used pet items might be a business I could start. If I hadn't been doing animal adoption work for years, I never would have come up with the idea for Pet Stuff Resale."
Opportunities are going to come your way. If you are in banking, banking opportunities will appear. By getting involved in doing something you love, even if it's part-time or a hobby, you put yourself in a position to find opportunities, or create a business concept, doing something you really enjoy.
2. Market Research Made Easy
Because Janet spent the previous 12 years working closely with veterinarians, other rescue groups and animal shelters, pet stores, and pet owners, she had easy access to numerous people who could help her determine:
- whether pet owners wanted to buy used pet items
- where to focus initial efforts
- how to attract her best customers
Targeted and valid market research tells you what problems to expect, and what questions to ask to prevent the ones that could kill your business before it starts growing. If you investigate both the market for your services/products and prospective referral sources, the numbers in your business plan will actually be useful instead of wishful thinking.
3. Referrals: Put Your Fan Club to Work
Wouldn't you feel more comfortable creating a new business if you knew there were many well-respected people who thought you're terrific, and who have gotten to know your dedication and professionalism over a period of years? You can jump-start a new business if you have a small network of people ready to make referrals and become your customers. Referrals from people who believe in you and want you to succeed are far more effective than any amount of advertising.
The pet experts with whom Janet had been networking for years knew that she was honest, detail oriented, and loved pets. They were glad to help her get started. "Janet is a woman of integrity and strong beliefs," says Dr. Darren Williams, DVM of Mayde Creek Animal Health Center in Katy, Texas. "I know my clients will be treated fairly." Her brightly colored brochures are given out by vets, rescue groups, and others who love to tell their customers what a gem she is.
4. Know Your Niche
Selling is educating! And the more you know, the better an educator you'll be. If you love what you do, it's rewarding and fun to share useful information with others. "It took me a long time before I felt comfortable calling myself an expert," says Janet. "Women aren't used to tooting their own horn." Now that she's more at ease in her role as pet expert, she knows that she's not a 'salesperson' to her customers. She's an animal lover and trusted resource. When she makes recommendations, it's similar to a doctor giving advice to a patient. Her customer feels that with her expert advice, they can make the right decision about what to purchase for their pet.
5. Be in Two Places at Once
"I can't tell you how often I hear, 'I got your info from the treat lady,'" Janet says. The treat lady is Greta Kirkland, also based in Houston, who met Janet shortly after she adopted a greyhound and borrowed a racing blanket from her. Greta is the founder of Raleigh B's, and makes handmade, all-natural dog treats. "When I'm helping customers choose treats for their dog, it often becomes obvious that they can utilize Janet's Pet Stuff Resale for items they either have or need," tells Greta. "One of her brochures goes in the bag with every purchase, and I have a display of them on my info table as well."
As both the owner and only employee, Janet has to be careful to maximize her time and energy. Having a networking partner like Greta lets her be in two places at once without losing the personal touch.
6. Perfect Pitch
Harder to pitch: "I have a new business. You should have me on your T.V. show."
Easier to pitch: "I've got some adorable rescued greyhounds for adoption, and your show could help the public see what great pets they are!"
"It was so much easier to promote my business once I had the experience promoting greyhound adoption. Plus the media was more receptive to my business because they knew about my rescue endeavors." It didn't hurt that the journalists covering her greyhound work loved the dogs.
"I'm still in touch with the reporter that interviewed me at the greyhound rescue in 1990. And a couple of newspaper people adopted dogs from me." Now when Janet sends a press release to her media contacts, she's likely to get a return phone call. And because she learned the ropes of promotion as a volunteer, no one expected her to craft the perfect press release.
Many entrepreneurs are not experienced at doing their own P.R. Because they haven't budgeted for an outside service, they get very little or no press for their business. If you're involved in a community organization, religious group, or any cause you care about, offer to help them with publicity. If they already have a P.R. person, act as their assistant. If not, read some books about preparing press releases and press kits, and talk to volunteers helping other groups get their message out. Pretty soon, you'll know the finer points of publicizing any business.
Just Do It
There are lots of reasons why NOT to start out as a volunteer or work at an existing business. You may think you don't have enough time. Or you can't stand working for someone else another moment. Or, like a young engaged couple that doesn't want pre-marital counseling, preparing to avoid failure seems "unromantic" when things feel so right.
But if you want to have interesting problems to solve, and avoid the financial and emotional pain of failure, the most productive step to take is to learn the ropes as a volunteer or employee. Janet went from being over 40, laid off, and computer-phobic, to creating a growing business that brings her tremendous satisfaction. Because she volunteered to work at something she loved, she learned on-the-job lessons that many entrepreneurs encounter when the stakes are much higher after they have started their business. And she's no longer computer-phobic. "Greta surprised me and registered a website for me." I'll bet she asked her network of vets, customers, animal shelters and rescues, and pet stores for input before she launched her website, http://www.petstuffresale.com/.
Janet's tips for bringing home your new puppy
- Only buy metal or ceramic bowls. Plastic absorbs bacteria, and can cause gum infections.
- When housebreaking your puppy, if you are crate training, don't speak to them while letting them out. They'll get excited and could pee in their crate. The same goes for when you just get home.
- Use an I.D. tag even if your dog has a microchip. Microchips are embedded in the skin and have to be scanned by a device. The tag is visible to any passerby. People are more likely to help a lost pet than a stray.