handbook 30 Questions to Ask Before Becoming an Independent Business Owner
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1 30 Questions to Ask Before Becoming an Independent Business Owner By Doug Baarman
2 Contents Introduction Questions to Ask About WHERE YOU ARE TODAY Questions to Ask About WHY YOU WANT TO MAKE THE MOVE Questions to Ask About MAKING THE MOVE Questions to Ask About WHAT I NEED TO KNOW/WHAT SKILLS I NEED TO ACHIEVE SUCCESS Questions to Ask About THE RIGHT TIME TO MAKE THE MOVE Questions to Ask About WHO CAN HELP YOU MAKE THE MOVE...11 BONUS WHO CAN HELP YOU
3 Introduction Dear Fellow Entrepreneur, After spending 18 years of my hospitality career on the hotel side, I have enjoyed my 7+ on the meeting planning side. Although it has not always been easy being an entrepreneur and small business owner in the hospitality industry, I must admit, it is truly one of the most exciting and rewarding opportunities I have experienced. As I have made the transition and enjoyed my new career, I have found that many who want to consider this option do not know where to start or who to speak with to see if this is the right move for them. I decided to do something about it and in this Handbook; I am sharing a series of 5 Questions to Ask About 1. Where You Are Today? 2. Why Do You Want To Make The Move? 3. How Do You Make The Move? 4. What You Need To Know / What Skills Do You Need To Make The Move? 5. When To Make The Move? 6. Who Can Help You Make The Move? We all want to have the best life possible for ourselves and our families. This is not solely based on income, but the desired outcome and lifestyle that will enable us reach our goals. I hope this Handbook and the information that we share in our Hospitality Lifestyles blog will help you improve both your career and lifestyle. Every business should generate time, money and significance for us. Why do we only ask it to make money? -Chuck Blakeman I wish you continued success in this amazing industry. Doug Baarman 3
4 5 Questions to Ask About Where You Are Today 1. What are you doing today? Is it time to step back and look at where you are in your career today? Are you where you planned to be at this point in your career? If not, what are you doing to improve your situation? 2. Are you using your education, knowledge and experience to its full potential? You have a wealth of knowledge and experience. Are you putting it to use every day in a way that benefits you? Examine your past objectively to see whether you have assumed leadership roles or initiated solo projects anything that might suggest you re good at executing ideas? 3. If you could do anything, what would it be? This is your time to dream. If money were no object (you just won the lottery), what would you be doing? What steps do you need to take today (not just playing the lottery) to achieve your dream? 4. Are you able to spend the amount of time with family and friends that you thought you would? Do you have a good work-life balance? This is a tough one to answer but be honest with yourself. Are you truly spending quality time with family and friends? 5. Are you living in the location (geography) you want to be in? Is your career controlling where you live or are you in control of where you live and the lifestyle you want? Would you move to a different city or even to a new country if an opportunity came up? 4
5 5 Questions to Ask About Why You Want To Make The Move 1. Are you living your ideal lifestyle? Have you determined your big why for making this move? Entrepreneurship offers the kind of lifestyle few people will ever know but it takes sacrifice and hard work to get there. We all have goals that we want to achieve in life (it must be more than monetary goals) and we need to clearly define the lifestyle that will help us achieve these goals. Why do we get up every morning? 2. Do you want more personal time or time to spend with family? I hope this is an easy question for you to answer, but do want to make sure we are defining it as quality time (not time with the family while ing and texting). 3. Has your current employment situation changed? If your employment situation changed (not by your choice), is this the time to step back and make the move that you have been dreaming about? 4. Has your dream always been to be in business for yourself? Personally, I was always very entrepreneurial, even within a large organization. I always knew that one day I wanted to go off on my own and be in control of my own destiny. Do you have this dream? If so, what are you doing about it? Trust your instinct (the little voice inside that tells you your true purpose in life), and you will get meaning in your life. 5. Do you want to create wealth? Did you know that you can create greater wealth in business for yourself than as an employee of an organization? Entrepreneur Employee - Earns income even while sleeping - Only earns income during work hours - Has unlimited income opportunities - Has fixed and safe limited income - Gives jobs - Finds a job - Taxed on income after deducting expenses - Taxed on all taxable income - Can expand business when time is right - Employees are typically restricted b/c of non compete agreements - Can be an owner of other small businesses - Cannot be a worker with other similar employers - Can transfer enterprise as a legacy or inheritance to spouse or children - Cannot transfer employment - Takes the risk and becomes accountable for it - Stays in so called comfort zone 5
6 5 Questions to Ask About Making The Move 1. Do you want to start your own company? This may be the most difficult option, but also provide the most rewarding outcome. Many have the dream of starting and building their own company from the ground up. The key point is to have a well mapped out plan and understand that there are many start-up costs. You will need to create all of the systems, processes and procedures. It will be challenging but can also be very rewarding. 2. Do you want to buy an existing company? This is a way to be in business for yourself more quickly. You will need to rely on outside resources to evaluate the current state of the business. Do your homework so you know; the current condition of the business you are buying, the historical data on how the business has been doing, what customers say about the business, why they are selling? etc. 3. Do you want to buy a franchise? Again, this is a way to get into business more quickly. You will have template start-up processes, procedures and ongoing support. You can use someone else s proven business concept as your entrepreneurial road map. However, you will need to factor in start-up franchise costs and ongoing fees. 4. Do you want to utilize an existing channel (like direct selling) to launch your product or service? There are other ways to get into business. I have seen many take their product or service to the direct selling model with success. Have you researched the other options available? 5. Do you want to become an independent contractor? This gives you the best opportunity to put your experience and knowledge to work for yourself in an industry that you love. This model allows you to test the entrepreneurial waters without having to spend money on real estate and staff. It is the most financially viable and flexible of all the options listed above. 6
7 5 Questions to Ask About What I Need To Know/What Skills I Need To Achieve Success 1. Are you good at finance? In order to be successful running your business, you will need to know your numbers. You will not need to become an accountant, but you do need to understand your operating profit, cost of services and cash flow. The purpose of your business is to generate a profit and you need to understand the basic financial information that will help you make the decisions to achieve your goal. 2. Are you good at sales? You need to understand that your success depends on the ability to attract revenue generating customers. It is important to understand that customers do not buy services; they buy solutions to their problems or challenges. You need to learn how to describe your service in a way that enables the potential customer to understand that you have the solution for their challenge. Building a successful business lies in your ability to spot business opportunities that others miss. Constant and consistent follow up enables you to turn prospects into customers. 3. Are you good at networking? In order to attract new customers, you will need to get out and spread the word about the services you provide. In addition to your other sales and marketing techniques, networking will be one of the most valuable ways to attract customers. Some of us struggle to make small talk. It is a key skill to learn though; it is true what they say.that sometimes it is more who you know than what! When I worked for a corporation, I would grade myself as a C- networker. This is not acceptable if you want to be a successful independent business owner. Work on your networking skills- it will pay off for you! 4. Are you educating yourself on how to be an entrepreneur/small business owner? Invest in yourself! Top entrepreneurs buy and read business and marketing books, magazines, reports, journals, newsletters, websites, industry publications, etc. I recently read that being an entrepreneur is like getting a promotion to an entirely new position for which you had little previous background. This is so true and there are no secret or magic formulas to help. However, there are plenty of resources available to help you. I would strongly suggest that you read everything you can, attend industry events and talk to as many independent meeting planners as possible. I love the expression, be a sponge. You need to soak up all the information that you can. 7
8 5. Have you surrounded yourself with people who will tell you the truth? You need to surround yourself with people that will tell you the truth. You do not need a bunch of yes people around you. These individuals need to be willing to support you when you on track, challenge you when you need to make adjustments and help you be realistic about your goals. 8
9 5 Questions to Ask About The Right Time To Make The Move 1. Are you financially prepared? The majority of new businesses fail because they run out of capital. Do you have the money set aside to cover start-up fees, marketing budget, ongoing expenses and lost wages while you get the business up and running? You should have enough money set aside for your monthly household expenses for at least six months to one year as you may not be able to pay yourself for a while as your new business gets under way. Consider how much you ll have to invest in your business and how losing it would affect your other financial goals, such as having a sound retirement or paying your kids college tuition. Weigh the importance of starting a business and the potential upside against the sacrifices you might face. 2. Do you have the support of your family? Have you discussed this with your family? Do you have their commitment? You will need their emotional (and potentially financial) support especially in the beginning. Family members will have to commit to the new business too, understanding that money could be scarce for a while and they may have to limit their spending. Determine whether they would view the business as an imposition. 3. Do you have your strategic plan ready? You need a detailed plan on what you intend to accomplish in the next year. Without a plan, we plan to fail. This does not need to be a cumbersome document; my favorite is a 2-page document that is a constantly evolving game plan. You can always get a job, but you will not find the career you love until you know where you are going first. Success is never completely assured but a solid business plan will help enormously. 4. Do you have your marketing plan ready? Without a plan to capture customers, you will not be in business for long. Who is your market? Where are they located? What kind of image do you want to display? How do you differentiate yourself from your competition? The key to success is attaining and retaining profitable customers. 5. Why not today? If you have all of the above in place, you are ready. What are you waiting for why not today? It all comes down to will you do it or will you not? Life grants big rewards, but only to those who put in the work. 9
10 You really can do whatever you want, but you will have to step out of your comfort zone and out of your own way. For us, the timing is right as the hospitality industry is moving from recovery to strength: 10
11 5 Questions to Ask About Who Can Help You Make The Move 1. Family? Believe it or not, if you look throughout your extended family you will be amazed at the talent and resources that are available to you. Family is a great place to start spreading the word about your plans for the future. 2. Friends? If they are true friends, they want you to achieve success in your career and are willing to help you. Make a list of those that may be willing to push you and support you. Ask them to help you build your business. 3. Mentor/Coach? You need to have good mentors and coaches to guide you on this journey. You want to talk with those who have traveled the road before you. They will help you avoid some of the challenges they faced and help you achieve success more quickly. Do you have these individuals in place today? If not, do you know where you would go to find one? Are you talking to them about what you are planning to do? Make certain these individuals are ones that you are comfortable working with. 4. Current customers? Would any of your current customers join you when you start your current company? Depending on the business you plan to start, are you able to speak to them today about what you are planning to do? Make a list of all your current customers and who would join you. 5. Current employer? Is your current employer a potential customer of your new business? If not, are they competitors? Either way, maintaining relationships with former corporate colleagues is one of the best ways to expand your business. Learn how to leverage your connections. 11
12 BONUS I have one bonus point on who can help you make the move I can help you. I have a proven track record of assisting over 100 talented people successfully making the move from employee to independent business owner. I have one final question: Are you ready? Our hope is that the 30+ questions we have asked will help as you productively plan for your transition from employee to independent business owner in the hospitality industry. I wish you continued success in this amazing industry! 12
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