Career Planning and Changing (Encyclopedia of Small Business)
A change in career, whether initiated voluntarily or involuntarily, can be a time of significant anxiety. Even if one is excited about future career plans, a certain degree of apprehension is perfectly natural. If you have been forced out of a jobither because of outright dismissal, painful realizations about professional prospects in the position you had previously held, or simple burnouthese feelings of anxiety are apt to be even more profound.
But a change in career can also be a time of great opportunity and personal freedom. "Careers are linear in foresight but circuitous in hindsight, and chance favors the prepared mind," Richard Ream wrote in Information Today. "What you need as you plan yours is to sustain curiosity, optimism, flexibility, and open-mindedness." The casting off of old ways can be a liberating experience, for it frees people to consider a variety of professional and personal avenues that were previously closed to them because of their work attachments. Some choose to return to school to pursue courses of study that can lead into whole new careers, while others use their skills and experience to take a position similar to their previous one, but in a fresh environment. Many others, howevernd especially those who have voluntarily changed their career pathhoose to join the ever-growing ranks of small business owners in America.
The decision to launch a small business is one that should not be arrived at in hasty or haphazard fashion. Indeed, any entrepreneur faces obstacles that have to be addressed, whether those obstacles take the form of capital shortfalls, tough competition, problems with location, management issues, or arriving at a satisfactory balance of work and family time. Those who neglect to investigate or anticipate these barriers to business success are far more likely to flounder. Conversely, the well-prepared, realistic entrepreneur who takes the time to lay the groundwork for his or her business initiative is significantly more likely to be ultimately successful in his or her endeavor. "Give yourself every chance to succeed," wrote the editors of How to Run a Small Business. "Successful entrepeneurs, aware of the various chances for failure in a new venture, work hard to shift the odds in their favor by thorough investigation at the outset. The person destined for failure is the one who is carried into a business on the euphoria of going it alone without doing the essential preparatory work."
LAYING THE GROUNDWORK FOR A NEW BUSINESS
People launch their own businesses for all sorts of reasons. Some are weary of the corporate settings in which they have previously labored, and hunger for an opportunity to exercise greater control over their lives. Some want to make greater use of their skills and education, while others envision entrepreneurship/small business ownership as a path to a different lifestyle. Finally, many people start new business enterprises in hopes of improving their financial circumstances.
But before beginning a new business, economic and entrepeneurial analysts recommend that prospective small business owners take time to honestly assess not only the viability of their business idea, but the level of motivation, talent, money and other resources that they can bring to bear to best ensure that their enterprise succeeds. For example, the would-be entrepeneur needs to frankly consider a number of aspects of his or her own personality before embarking on a small business venture. These issues include: assessing how you like to spend your time; determining how compatible your skills and interests are with the proposed business; deciding how much money you are willing or able to invest in a new business enterprise; deciding how much debt you are willing to accrue in establishing a new business; defining how many hours you are willing to invest in the business on a week-in, week-out basis; determining if that allotment of time will be sufficient to make your business a success; and assessing the level of support you can expect to receive from your family and other important people in your life. It is important to be realistic in considering these issues; a decision to start a new business that is built on a foundation of best-case scenarios or unrealistic hopes is almost certainly doomed to struggle and ultimately fail.
In addition, one needs to ponder the following questions about the proposed venture itself:
- What services or products will you offer?
- How much time will be required?
- What economic trends are evident in the industry which you propose to enter?
- Who are your likely competitors, and how well entrenched are they?
- How can you wrest business away from those competitors?
- Where will you locate your business?
- What equipment or supplies will you need to start your business?
- How many employees will you need?
- What will be your start-up costs?
- How will you finance your business?
- How will you market your products or services?
- What demographic group (or groups) do you intend to target with your business?
- How long will it likely take for your business to become profitable?
- Who will you seek to target as customers/clients of your products/services?
- What legal structure will you choose for your enterprise?
- What kinds of insurance will you need to secure for your company?
- How will your business's legal and financial needs be addressed?
Each of the above factors has its own complexities and qualities that need to be fully researched and considered. Cursory consideration of any of these factors, warn business experts, is simply unacceptable in preparing to launch a business. For instance, a prospective small business owner might include rent (including first-month rent, final-month rent, and security deposits), employee payroll (including benefits), equipment costs, inventory requirements, insurance, and leasehold improvements in calculating startup costs for his or her business. But if the prospective entrepeneur neglects to include such financial factors as product/service marketing costs, licensing costs, pre-opening payroll costs (for painters, builders, etc.), and attorney and/or accountant fees, then that person is entering the small business world with insufficient data, which can disable a business from the very beginning.
BUYING A BUSINESS
Another option for the would-be entrepreneur who wishes to go into business for him or herself is to investigate buying an already established business. This option has a number of significant advantages. The financial investment, while it can be substantial if one is seeking to buy a profitable business, is easier to determine, since equipment is already in place and employee work force, location, equipment costs, and other aspects of the business have already been established. In addition, whatever financing is needed is often easier to obtain when creditors see that the money is intended for purchasing an already successful business. Moreover, if the business has been successful, one can realize a return on investment much more quickly than the small business owner who starts from scratch. Finally, purchasing a successful business generally gives the entrepreneur an established client or customer base and working relationships with suppliers.
Of course, there are dangers associated with purchasing a business as well; eroding market share, employees unhappy with the change in ownership, business debt (as a result of overexpansion, for instance), outdated inventory systems, and changes in the competitive environment such as the arrival of a new competitor in the area are all factors that have to be weighed when considering the purchase of an established business. As always, though, the prospective buyer can avoid many of these pitfalls by first undertaking a thorough investigation of the business and the trends in the industry of which it is a part.
People seeking to establish their own business can also look into franchising opportunities. A franchising opportunity allows the business owner to offer goods or services under the trademark of a franchiser, often a large corporation. The entrepreneur does not enjoy the same level of freedom in determining the character and direction of his or her enterprise under this arrangement, and securing franchise rights is typically an expensive proposition. In addition, royalty fees, in which the franchisee pays a certain percentage of revenue (as much as 15 percent) to franchisers, are a standard part of franchisee arrangements in many industries. Nonetheless, franchisees also receive several weighty benefits. These include instant name recognition, a proven marketing plan, and attractive odds of success (According to the 1991 Franchisees Owners Survey conducted by Arthur Anderson, for example, more than 96 percent of units owned by franchisees are still in business after five years). Indeed, franchising has emerged as an explosive component in America's overall economic growth in recent years. Franchise stores account for more than one-third of all retail sales in America, for example, and many business analysts note that this trend shows no sign of slowing.
As countless business people, financial experts, and academics have long observed, no new business venture is guaranteed to succeed. The marketing strategies of competitors, changes in the legal landscape, and personal issues such as health and family can all change quickly, and all can have a dramatic impact on your business. But by embarking on an honest and comprehensive course of research and planning, an entrepreneur will be far better equipped to prepare a business plan that will maximize the likelihood of making a new enterprise a successful one.
SOURCES TO CONSULT WHEN PONDERING A CAREER CHANGE
There are many valuable information sources readily available to individuals pondering the pros and cons of establishing a business or changing careers. Perhaps the most plentiful source of informationnd one of the least inexpensives the United States government. Many branches of the U.S. government publish large quantities of information of interest to the small business owner or prospective entrepreneur. The weekly Official Gazette of the U.S. Patent Office, for instance, offers particularly helpful information to the entrepreneur who hopes to establish a business based on a new product idea.
The U.S. Small Business Administration (SBA) is the most important of the government agencies for the prospective small business owner. It maintains several programs that offer services in the realms of training, counseling, research, and other assistance to the small business community. These include Small Business Development Centers (SBDCs), the Service Corps of Retired Executives (SCORE), Business Information Centers (BICs), Small Business Technology Transfer programs (SBTT), and Small Business Investment Companies (SBICs). The latter program is specifically designed to fund new companies, while the SBTT program concentrates on providing assistance to technology-oriented enterprises, especially at the start-up phase of business.
Other sources of information include state economic development agencies, municipal chambers of commerce, trade shows, fellow entrepreneurs, and small business or trade associations, such as the Center for Entrepreneurial Management, the Small Business Network, and the Small Business Service Bureau. Finally, as small businessesome-based and otherwisessume ever greater importance and influence in both the domestic and international economies, a massive body of literature devoted to attracting the entrepreneur and small business owner has emerged in recent years. In addition to the large number of books that have been published on various aspects of small business ownership, many periodicals devoted to small business issues can be found at your local bookstore, including The Business Owner, Entrepreneur, Journal of Small Business Management, and the U.S. Chamber of Commerce publication Nation's Business.
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