Taking the leap

You˜re a mechanic, and you˜re good. When people walk into your place of employment, they ask for you to work on their car. You put in a lot of hours. Family events are few and far between. But that˜s OK; you like your job.Then one day, your boss won˜t give you a raise. Unbelievable. You˜re killing yourself. You˜re working overtime, and they˜re making all the money. Don˜t they understand? You have loyal fans. They would follow if you just struck out on your own, started your own business.Plus, you could put in fewer hours, make more money and take the family on a vacation.
Bad idea.
A book called "The E Myth," by Mike Gerber explains why something like this doesn˜t work.
"It talks about how most businesses are started up by technicians with an entrepreneurial seizure," said Frank Pryor, director of the Larimer County Small Business Development Center. "Every business needs a technician, manager and entrepreneur. Rarely does one person have all of that."
That˜s just one of the many precautions provided by officials at small-business assistance centers. Here are some other "don˜ts":
n Don˜t start a business if the main goal is more money, leisure time and fewer headaches.
n Don˜t go into it underfunded.
n Don˜t go into it without planning.
Why? Dire statistics about business failure should be reason enough. Between 75 percent and 80 percent of new businesses fail, said Jim Lamprecht of the Laramie County Enterprise Center.
Senior Corps of Retired Executives (SCORE) volunteer Robert Aglar cited a 2-year-old Harvard Business study stating that the individuals who spent six months or less planning their business had an 80 percent failure rate. If they prepared for a year or more, the success was 80 percent. Aglar is the Colorado district manager for SCORE.
Small-business help-center officials also agree that before taking the leap and deciding to start a business these three things should be asked, and answered: What is the market? What about financing? And into what business do I really want to sink my time?
It˜s good to know the potential popularity of your business. For example, if you chose something in the service industry, you won˜t be alone. Services are expected to continue as the state˜s fastest-growing industry for the next 10 years at a rate of 50 percent, according to the Colorado Department of Labor and Employment. Wholesale and retail trade are expected to be second.
But Pryor advised that the final decision on the business you choose should be based on what you really want to do. Pryor said that passion for the thing you do is really the key. He said many of his clients want to buy a business in which they aren˜t interested. Their idea is to turn the business around, then sell it. Often they want to immediately quit their day jobs, dive right into the endeavor and make a lot of money so they can do what they really want.
Proyer said he urges these kinds of people to think twice. Making a business profitable in order to sell it takes longer than you think. Decide if the business will make you happy before you do it, he said.
"When you ask someone if they are really happy, it should be a yes or no answer," he said. "I had a woman who just started an interior-plant business, and she didn˜t even hesitate (to say yes). She˜s the right kind of person for that business."
Lamprecht agreed that taking time to decide what you want to do is important. It has to be your idea, and it should be "something you like to do as much as what you do in your leisure time."
After counseling new business owners for 20 years, he always comes back to this axiom: "Failing to plan a business adequately means you˜re planning to fail."
Chris Chavez, public affairs director of the U.S. Small Business Administration in Denver, also advocates ample planning.
"You need to have drive, patience, to be willing to take advice and to be able to learn fast," he said. "But before even beginning, before putting up the time or taking out a loan, you need a business plan that talks about the money, the market and the management."
The SBA offers a loan-guarantee program where the business person still gets the money from a commercial lender, but the loan is backed by the SBA. They˜ guarantee up to $750,000 for up to 10 years for nonspeculative business endeavors, Chavez said.
In 1996, the SBA guaranteed more than 52,700 loans totaling $10 billion to America˜s small businesses.
The services provided by the SBA, from how to write a business plan to funding programs, can help the business owner research what it will take to put his or her operation together.
There are also small-business assistance centers in the county or city you˜re targeting for your business that are good resources for research. Call for the information. Many have Web pages that all but roll out the welcome mat for new business. If you don˜t have Internet access at home, visit the library. Librarians are trained to help customers get around on the Internet, and it˜s free.
Don˜t know anything about Laramie, Wyo., but want to do business there? You can reach the Laramie Economic Development Corp.˜s Web page through http://www.ncbr.com. The address will take you to The Northern Colorado Business Report˜s web page, but it has links to most of the business-assistance centers in Northern Colorado and Southern Wyoming.
The Laramie Economic Development Corp.˜s Web page talks about Laramie as a growing technical manufacturing community. It lists prime office spaces, available sites and where to build to suit. The business climate of the area is spelled out, including information on sales tax, electrical rates and work-force education levels.
Greeley and Weld County Web pages carry similar information and a red-carpet invitation that begins: "We are very pro-growth. We are prepared to handle company needs and will assist in reducing development startup costs."
Enterprize zones, Colorado Economic Development Commission funds and local economic development plans are listed. See sidebar for addresses and phone numbers of area business assistance centers.