How to Run a Successful Business

How to Run a Successful Business

Janice Arenofsky

Anyone with a marketable idea and the initiative to make it work can start a business. Do you have what it takes? This article will help you find out.

Mike Moylan and his brother Brendan were only high school students when the took the biggest step of their lives. They launched Eurosport (www.soccer.com), a catalog business that sells soccer equipment and related products. “We were not the most sophisticated business people in the world, but we understood the game of soccer,” says Brendan in Entrepreneur Magazine’s “Young Millionaires” by Rieva Lesonsky. “People let us know right away that there was a market for our expertise.”

That was in 1984. Today, the two brothers have renamed their business Sports Endeavors. In 1997, sales surpassed $38 million. “We were in the right place at the right time,” says Brendan.

Biz Sense

But it’s not just luck that turns a good idea into a great success. Six-figure CEOs-whether teenagers or adults–are not born with the skills and abilities necessary to mass-market a product or service successfully.

Becoming an entrepreneur, or business person, is a learning process, says Robin Anderson, a business professor and director of the Center for Entrepreneurship at the University of Portland in Oregon. Anderson says businesses motivate students to learn skills that connect them with the real world.

Take, for instance, Jennifer Kushell, author of The Young Entrepreneur’s Edge: Using Your Ambition, Independence and Youth to Launch a Successful Business: By the age of 19, Jennifer had operated four businesses: They involved T-shirts, gift baskets, women’s safety seminars, and videotapes of college tours. Handson experience taught Jennifer a lot about business. But she wanted to learn more. She started reading entrepreneur-related books and magazines and began attending conferences and seminars. At a conference, she came up with her bets money-making venture. The Young Entrepreneurs Network, an organization that supports and educates entrepreneurs, and puts members into contact with other young business people.

What It Takes

Most entrepreneurs are not Ivy-League whiz kids like Robert Sundara hen, who graduated from Stanford and founded a multimillion dollar sporting-goods site, FogDog. Still, it takes a certain kind of person to go it alone as an entrepreneur. You must be a risk-taker, for one thing. You must be creative and enjoy working hard in an area you find fascinating. You also must enjoy the independence and responsibility of being your own boss. “I like having my own hours,” says D’Arcy Marlow, 18, who operates a bench-building business. D’Arcy makes benches during spring summer and winter breaks an West Texas A&M University.

To succeed as an entrepreneur, in also helps to be skilled in a practical area. May be you like to garden, make crafts, or build furniture. Or perhaps you can fix appliances or bikes or whip up a tasty dessert. For example, brothers Sean, Brenden, and Paddy O’Connell realized they had the skills o teach younger kids the basics of basket-ball. So the three teens organized the O’Connell Basketball Camp in River Forest, Illinois. They turned a hobby they loved into a business that pays did Regina Jackson, 18, of Washington, D.C. She took $50 and talent for crafting beautiful ornaments and opened a jewels design business. Her long range goal is to own an international chain of shops.

Entrepreneurs also must be working hard. By the time Katie Beeman, from Duluth, Minnesota was 18, she had started and operated two successful businesses a lawn service and a Christmas tree lot. Thanks to this experience and her school accomplishments she won a four-year Young Entrepreneurial Business Scholar to the University of St. Thomas.

It’s important for business people to be able to recognized good idea and act quickly implement it. Take Claire Meunier. The 17-year-old New Orleans high-school campus survival pack as a gift for an older brother going off to college. When the idea began attracting attention, Claire recognized its money-making potential. So last year she surveyed college kids, tapped family friends for financial information, and wrote a business plan for Meuniers”s Commodities. The plan won the Independent Means National Business Plan Competition. Now a freshman at Vanderbilt University, Claire has opted to become a business major.

Turn Bytes Into Bucks

A knowledge of computers is vital to becoming an entrepreneur, reports Young Biz’s “Report on Youth Entrepreneurship.” At least 75 percent of the top 100 businesses use computers to perform tasks. And the three highest moneymaking categories are computer-related.

Take Rishi Bhat, 15, for example. A 10th grader from Chicago, Rishi co-wrote the computer program, SiegeSoft, which lets people surf the Internet anonymously. He then set up a Web site to market. copies of the program. Within a few months, Rishi sold the program for $1.6 million.

Students at St. Helens High School in Oregon also have taken advantage of the demand for technology. They started a computer company–one of the nine businesses the students operate. Other businesses include a catering company, an art gallery, and a construction firm. Most of the students working in the companies receive class credit for their jobs. But a few of the jobs pay.

Just Do It!

Joshua Fagan, from Camarillo, California, recently won a $12,000 college scholarship from the National Association for the Self-Employed for his business, Cute Stuff Artworks, which sells creative art for children’s rooms. “Entrepreneurs succeed because they don’t just wish things would happen. They make them happen,” Joshua,. 15, said in a recent interview.

Want to start a business? Here’s how to set one up:

* Write a Plan

A business plan is really an action plan. It usually includes a description of your finances (startup costs, prices of products or services, and projected income), market research (gathered from customer surveys, library research, and discussions), advertising (for instance, flyers and business cards), and a description of sales goals.

* Get $$$

To make money you must have money to invest. Before Evan Kiley, 18, and Renold Aparicio, 19, from Corona, California, established Impact Clothing, their vintage clothing store, they wrote a 30-page business plan. The main reason? To get start-up money: $1,500 from a local grant and $12,000 in bank loans. You may also want to borrow from parents, other relatives, or adult mentors, but make sure your agreement includes repaying debt.

* Advertise for Customers

At age 14, Mallory Gollick, from Denver, Colorado, learned how to publicize Jungle Beans, a coffee bean business. Mallory ran off flyers and did a lot of networking to spread the word about her business.

Internet sites also are great for advertising, suggests Eryn Ozanne, from Binghamton, New York. The 17-year-old runs a sewing business–www.clothesforthesoul.com. Her site attracts clients from all over the country. Of course she also sells clothes to local retail outlets.

* Hire Staff

Most entrepreneurs start out alone or with a few partners and then gradually add employees. James Carpenter, a 17-year-old high-school senior from Louisville, Colorado, is an exception. He operates Athletic Dance Studio International. He hires dance instructors to help him choreograph and teach routines to competitive teams of high-school dancers and cheerleaders.

Pros and Cons

The entrepreneurial life has advantages and disadvantages. On the negative side, you risk spending money and time on a venture that could fail. You also may be subject to emotional highs and lows, not to mention a lack of take-home pay and less free time. On the other hand, Bonnie Drew and Marilyn Kourilsky, editors of Young Entrepreneur Magazine, say, “Running a business offers you a tremendous opportunity to improve your leadership, communication, and management skills while earning income.”

You become a better decision maker. For example, when Michelle Barsamian, a 16-year-old student in an entrepreneurial class, had to decide if she should sell Las Vegas souvenirs in Boston (as her father suggested), she weighed her personality against the demands of the business. Michelle decided against the enterprise for three reasons: She wouldn’t like standing all day in a mall kiosk or booth, she didn’t like Las Vegas souvenirs, and she wasn’t a “people person.”

Another excellent skill you develop is seeing the “big picture,” says Arthur Berg Bochner, who at age 11 co-authored The Totally Awesome Money Book for Kids and Their Parents. Bochner says you learn to recognize whether a situation is doable under a certain set of factors, such as costs, necessary skills, and supplies.

The most immediate advantage, however, is money. Young Biz magazine found that its four highest teenage earners were Internet entrepreneurs who made an average of $432,500 per year. Michael Furdyk, from Toronto, Canada, who recently started BuyBudcly.com (a comparison shopping service), sold his first Web company for more than $1 million.

When Fred De Luca opened his first sandwich shop, he was a 17-year-old high school graduate who wanted to earn money for his college education. With $1,000 in startup funds from a friend, Fred established the Subway sandwich shops!

Another advantage to taking the entrepreneurial road is self-development. Most teen entrepreneurs say they grow in self-confidence and initiative. For instance, Tayron Lynch from New York City says he feels more “intelligent.” And it’s no wonder! To run his stationery business, Tayron learned to use computers, keep track of inventory, manage money, and research the market. “It also gave me something to do other than hang out and waste my time,” he says.

Last of all, becoming an entrepreneur can help you test out possible career choices. Discovering that a pet-sitting business gives you less time for interacting with animals (something you enjoy) and requires more customer relations (which you dislike) is valuable information. It can affect the choice of a college major or graduate school program.

Before You Take the Plunge

Before jumping into the entrepreneurial pool, get as much advice as possible. For one thing, study the industry you’re entering, counsels 16-year-old Pankaj Arora, a high-school student and computer programming entrepreneur from Rochester, Minnesota.

Here are some other ideas for maximizing your chances for success:

* Make sure you match the right business with your experience. Review past volunteer or paid jobs you have had. What useful skills did you pick up? Scan the newsstand or your library shelf for magazines and books with start-up ideas.

* Use the Internet to investigate other competing entrepreneurial ideas. How does yours differ? Are you bringing a new twist to an old idea? Is there a need for this unique product or service?

* Write a business plan that focuses on three resources: money, strategies, and people. Ask yourself questions, such as: Who can bankroll this idea? What methods of advertising should I use? How much money must I charge to cover my costs (expenses) and still make a profit? What people or groups will be my customers?

* Start small, says Jennifer Kushell. Use free office space such as your bedroom or dorm. Make do with equipment you already have, such as your personal computer. “Beg” supplies from family members or relatives. Borrow money. You can repay people later when your business booms!

* Join an on-line or in-person support group for feedback and encouragement. Consult local business owners, friends, and family for advice.

* Join Junior Achievement (www.ja.org). Check out chat-rooms or bulletin boards at Web sites such as www.YoungBiz.com; ideacafe.com; TheMint.com; and Black Enterprise for Teens (blackenterprise.com).

* Consider enrolling in summer programs that focus on business skills, such as summer camps run by 4-H councils and YWCAs or YMCAs. The NAACP also offers summer programs, as do Boys and Girls Clubs, Scouts, the Small Business Development Center, and some universities and colleges. After attending EntrePrep, a summer camp program offered by the Kauffman Center for Entrepreneurial Leadership (www.emkf.org), Ephren Taylor and Michael Stahl launched their business, careers4teens.com. “Building your own business is an adventure and a lot more fun than working nine to five in a cubicle,” says Taylor.

* Take advantage of any available high school business programs. At Johnson County High School in Tennessee, students run a fish farm, for example. At Flagstaff High School in Arizona, students run a restaurant.

A Gutsy Challenge

Whether you tough it out alone or take advantage of programs and resources, creating your own business is challenging. Being your own boss takes guts–it’s not for everyone. But for the right people, it’s a rewarding adventure.

Christopher Short: Neighborhood Newsletters

At age 9, Christopher Short of Fairfax, Virginia, got an idea one day when he was watching “Mr. Belvedere” on TV. He decided to imitate “Welsey’s” idea for starting his own yard maintenance business.

Three years later, Short was still mowing lawns, but in Cave Creek, Arizona. The eighth grader also cleaned pools. But after his grandmother showed him a community flyer, Short got another idea. “I figured, why not get other people to pay for my advertising,” says Short. He did this by signing up 12 local advertisers. In November, 1995, Short, age 13, designed, printed, and distributed 1,000 copies of the “Rancho Review” to homes in his neighborhood. The newsletter became so profitable that Short gave up his lawn and pool business and worked on the newsletter part-time while in high school.

Are You Entrepreneurial?

Take this self-quiz and find out if you have what it takes to run a small business. In the blanks provided, write a Y for Yes or N for No.

__1. Do you like to compete with others?

__2. Do you like coping with challenges and problems?

__3. Do you consider yourself a leader?

__4. Do you keep trying even when things aren’t going just right?

__5. Do you set and achieve goals?

__6. Do you like the idea of flexible hours rather than set work times?

__7. Are you good at organizing your workload?

__8. Are you bored with your current volunteer, part-time, or summer job?

__9. Do you come up with creative ideas?

__10. Do you like to have the responsibility for “calling the shots”?

__11. Do you like living with constant change?

__12. Can you cope with the possibility of not receiving a steady paycheck?

__13. Can you handle owing others money?

Add up the numbers of Yes responses you wrote down.

1-3 Back away from being a boss.

4-6 Think twice before starting a business.

7-9 You may have an entrepreneurial streak.

10-12 You’re a natural “biz kid.”

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