YOUTH GARAGE

12 Steps To Successful Entrepreneurship

Last modified on 2012-02-21 00:33:49 GMT. 0 comments. Top.

Entrepreneurship is a goal to which many wish to aspire.  But, why do so many fall short?  In my 2 decades of helping small business owners to grow their business here are 12 things that I often see overlooked.

1. Know what you want personally before you get started (personal goals)

When people start a business they do it for a reason.  It’s what I call their “WHY”.  Over time with all the demands of a small business, many owners lose track of this “why” and they become dissatisfied by their business and their life.  You can read more about this dynamic in my blog post titled Why Are So Many Small Business Owners Unhappy.  If you know what you want from your life before you start it makes it much easier to build your business to get what you want from life!

2. Make sure your business vision is tied directly to your personal goal (passion motivates)

You have to do a lot of things that you don’t know how to do or don’t like to do while building your business.  If your business’ foundation is built on your passion, you’ll always be motivated to do whatever it takes to be successful.  This means creating goals that motivate.

3. Know the difference between and learn how to think strategically and execute tactically

Frequently I find small business owners that can think big, but can’t put the details together to make their big ideas a reality.  On the other hand, I find many that want to talk about all the details, but can’t tell you how they all fit together.  A successful entrepreneur needs to do be able to think both strategically and tactically, or you need to have a partner who can do whichever one you do not do well.

4. Know your strengths and weaknesses both personal and professional

Nobody does everything well, but an entrepreneur needs to do it all.  So, knowing your own capabilities is critical.  This means a willingness to take a hard look in the mirror.   Apply your strengths to your business and get help to improve your weaknesses.  Success will be the result of accepting yourself, or frustration will continue to consume you by avoiding the inevitable.

5. Learn how to ask for help and delegate

Often small business owners are “go getters”, doing whatever it takes to get the result they seek.  In the overall scheme of things this often is an entrepreneur’s downfall.  To grow a business you must divide and conquer.  That means delegating work to others.  If you do not master this skill your business will never grow beyond your span of control.  And, your business’ cash flow becomes dependent on a person – YOU.   This will impact the market value of your business significantly and how investors will look at your company when you look for funding.  LEARN TO DELEGATE AND THRIVE!

6. Build a management team to assist you in growing your business

I often hear small business owners say “I cannot afford to hire a management team to manage my business.  My question to them is “do you have a banker, CPA, lawyer, and/or business coach?”  What are these advisers doing for you?  If they’re not assisting you, you need to fire your current team and look for a new team.  This is one of the first things I do with ALL of my coaching clients.

7. Know your “exist strategy” before you start

You’ve heard the adage “if you don’t know where you’re going any road will get you there.”  Not having an exit strategy before you begin is exactly the same thing.  How you build your business is based on what you ultimately plan to do with it.  Depending on how you plan to exit your business: sell it to an investor, pass it on to your family, sell it to your employees, or just close it down, each has a different set of requirements.  Frequently when I get a client that wants to exit their business and they didn’t have an exit strategy it isn’t built it correctly.   It can  3 – 5 years to undo what’s been done and get it ready to sell.   If you start out with the end in mind you can build your business the way it  needs to be built and reap the benefits along the way!

8. Know your current business capabilities before developing a business plan

It amazes me how many entrepreneurs don’t know how much revenue their business is currently capable of generating.  If you don’t know this key fact then how do you know how much to sell and how much marketing you need to do?  You can understand this concept better by watching the 5 minute videoTuning Your Revenue Engine.

9. Understand the small business growth cycle stages

Growing a small business is a process.  As such, it has a very predictable cycle with key objectives on which you must  focus based on your stage.  If you don’t understand the cycle and at what stage your business is in it’s a crap shoot as to whether you’ll get where you want to go.  Find out more about the growth cycle by reading the posts within our Business Growth Series on this website.

10. Avoid “shiny object syndrome”

Most entrepreneurs can see an opportunity from a mile away.  The problem is too frequently they get distracted by these “shiny objects.”  Focus your business model so you don’t take on more than the resource you have available for your currently stage of growth. There are plenty of opportunities out their.  Focuse based on where you are in the growth cycle and you will find many more opportunities available to you in the future when you have the resources to fully reap the benefits which they present.

11. Know who your customers are and speak to them in their language, not yours

A common problem in many small businesses is that the owner is an expert in their area of discipline, while their customer is not.  That’s why they hire you!  But, too frequently the owner/expert uses technical language or the features of their product/service instead of the benefits their customers get as a result of buying their product/service.  Change the way you speak to your customers and watch how many more turn up on your doorstep!

12. Build systems every step of the way so your business can easily scale as you grow

What gives a business real market value is the ability for the product or service to be built or delivered by anyone!  This is the basis of the franchise business model.  As you create your business if you build processes anyone can follow it becomes very easy to train others as your business grows.  I believe this one key factor is where most small businesses get stuck in the quagmire and stagnate more than any other.  I cannot remember a client I ever worked with that had systems built for every aspect of their business.  As a result, some piece of the business was operating less than optimally and slowing down the rest of the Revenue Engine.  Build systems for your business and the sky is them limit!

There you have it.  The 12 things I think are most important to entrepreneurship.  What about you?  Is there something I missed?  Or, did this help you uncover that one thing that was holding you back from breaking out.  Share your experiences and let’s get a dialog going…

Too Much Entrepreneurship Is a Bad Thing

Last modified on 2011-08-20 06:34:23 GMT. 1 comment. Top.

- Bill Taylor

At the risk of sounding like a Grumpy Old Man, and with near certainty that this post will be roasted by many who read it, I am about to make the case that there is such a thing as too much entrepreneurship — or at least too much excitement about becoming an entrepreneur too early in life.

I know, I know. This blog, and all of my work over the last 15 years, has celebrated the spirit of innovation, disruption, and changing the game. But last week, when the New York Timespublished one of those bound-for-the-time-capsule reports on the culture of Silicon Valley, I for one had had enough. Anything in excess is a poison, after all, and in America we’ve made the phenomenon of taking every good idea to excess our new national pastime. That’s what we may be doing with entrepreneurship today. The startup bug has become a startup fever, and that fever may be driving many people to hysteria.

The Times piece was all about the new “War for Talent” in Silicon Valley, a replay of the battle waged more than a decade ago to recruit top-flight young engineers and coders from elite colleges and assorted countercultural pursuits. “The atmosphere is brutally competitive,” one executive said. “Recruiting in Silicon Valley is more competitive and intense and furious than college football recruiting of high school athletes.”

Talk about partying like it’s 1999: Zynga, the red-hot game maker, “dangles free haircuts and iPods to recruits, who are also told that they can bring their dogs to work.” (No word if the dogs get free haircuts too.) At Integra, a photo-sharing site, “workers take personal food and drink orders from employees, fill them at Costco, and keep the supplies on hand for lunches and snacks.”

All of this is pretty familiar, if slightly ridiculous, stuff. (I guess I am a Grumpy Old Man.) But what is truly new, and to me, at least, rather worrisome, is that companies have agreed to teach new employees how to start their own companies virtually from the minute they walk in the door. The hot new perk, for people who have barely spent a day working inside the company they have been recruited to join, is training and advice and lessons on how to leave that company and start one of their own. As the piece concludes, “Many of the most talented engineers want to be the next Mark Zuckerberg, not work for him.”

I suppose I’d like to be the next Mark Zuckerberg too, if only to get Jesse Eisenberg to play me on the big screen. But to me, this cult of the young entrepreneur runs the risk of becoming just another business-culture fad, the Silicon Valley version of every East Coast smarty-pants who aspired to be the next Gordon Gekko (a Hollywood-created crook, who, bizarrely, inspired countless young people to flock to Wall Street).

Here’s my major beef with what’s happening. The real metric of business success is whether you have a positive impact — on your industry, on your community, on (in a small way) the world at large. That doesn’t always mean starting your own company. Most of the time, in fact, it means becoming part of a company that you love, with a purpose you believe in, and people who you can’t imagine not working with. It’s all about the cause, the mission, the values you embrace, and the value you create. I’ve always admired talented people who want to be part of something bigger than themselves, rather than those who think it’s all about them, even when they’re in their mid-twenties.

Don’t get me wrong. I’m not against teaching people at a company how to be entrepreneurs. And, unlike say at Bloomberg, where people who leave the company are banished forever, I’m all for encouraging people to try new things with the hope that they will return. But I think it’s incredibly wrongheaded to compete for talented people based on pitching a company as a training ground for someone’s individual dreams, as opposed to a place where individuals can’t imagine not being — because the product is so important, the values so robust, the culture so engaging. Business ultimately is a team sport. As someone building a company, I’d much prefer people who genuinely want to be part of the team for the long haul, rather than “free agents” who are willing to suffer through a brief stint on the roster before they field a team of their own.

Malcolm Gladwell looked at this very issue a decade ago, during the last War for Talent, in a longNew Yorker piece called ”The Talent Myth.” The object of his attention (and scorn) was a company that vowed to attract the brainiest and most high-powered people in its field, and who promised that spending a few years there would give them the skills and mindset they needed to do whatever they wanted with the rest of their lives. That company was Enron, and we know how that turned out.

There’s a difference between attracting brilliant stars, Gladwell argued and building a brilliant systems for the long term. The most successful organizations, he said, “are the ones where the system is the star.” Indeed, he asked, “What if Enron failed not in spite of its talent mind-set but because of it?” he asked. “What if smart people are overrated?”

That was a heckuva question 10 years ago, and it’s a heckuva question today. Does it really make sense to move heaven and earth to recruit young people to your company whose real commitment is starting their own company? How about focusing on people (even if they are a little less young or a little less talented) who believe in your company and are committed to its success?

Let the debate begin….

 

Entrepreneurship as Disease

Last modified on 2011-08-20 06:31:12 GMT. 0 comments. Top.

- by Jeffrey Stibel

What does it mean to be an entrepreneur? I have heard far too many answers to this question. Everything from being a risk taker, inventor, a small business owner, to being just plain crazy or lucky. But none of these things have anything to do with entrepreneurialism, and frankly neither does much of what I have read in business books. Even the always insightful Malcolm Gladwell, in a recent New Yorker article on the subject, only got it half right.

Being an entrepreneur is something far different than what most people think. It is not about behavior (whether risk-prone or risk-averse); it is not about business type (you can run a small business, a public company, a division of a company, or be an investor); and it is not about title (you do not have to be a CEO to be an entrepreneur). Instead, I see it as a personality trait. There are plenty of small business owners and start-up founders who do exceptionally well — but are not what I would consider entrepreneurs. Just like in big business, you can be a successful general manager without being an entrepreneur or entrepreneurial.

I liken entrepreneurism to a disease. Having it myself, I am not always sure it is a good thing. That so many people wish to suffer from it just tells me they don’t understand it. Entrepreneurs, as the story goes, embody the American dream. They come from nowhere to build large empires, reap huge rewards, and live a lavish lifestyle. There is Larry Ellison and his yachts; Bill Gates and his 66,000-square foot smart house; Ted Turner and his nearly 2 million acres of land; Larry Page and his 747.

But those are the outliers. Gladwell’s well-received book of the same name estimated it takes nearly 10,000 hours of work to gain true expertise. Entrepreneurs are all in, all the time. Entrepreneurs love what they do and obsess over it. It is a predisposition; a path that has already been laid for you. It is a character trait, a labor of love, a zeal that cannot be trained, a condition that cannot be treated, an illness that cannot be caught. You’ve either got it or you don’t. Here are some questions to see if you have it:

• Do you wake up before your alarm goes off, hop out of bed excited to go to work? (good)
• Do you race to the car, forgetting breakfast, your morning coffee, and the paper? (better)
• Halfway to work, do you look down, realize you forgot to shower, shave, or get dressed? (great)
• Do you pause for a second, and then decide–what the hell–and head to work anyways? (diagnosis: entrepreneurialism; cure unknown)

I have done this far too many times, without any hesitation or embarrassment (my team jokingly calls these antics “Stibel-isms” but it’s really just entrepreneurism). Think of it as a very deep focus that is quite difficult to shake out of, especially when juxtaposed against life’s daily activities. Most people use a calendar to remind them of meetings and events; I have on my calendar such mundane things as eating lunch! Many people mistake entrepreneurism for ADD, or obsessiveness, or risk-taking, or hyper-mania or a host of other quirks. But entrepreneurs are really just manic-manic — there is one switch and it is always turned to on.

What drives an entrepreneur is not money. That is what drives businesses and businesspeople. But for an entrepreneur, money is merely a yardstick. Frankly, entrepreneurism is a very difficult and unpredictable way to make a living. It is often binary: either you make more money than your children, grandchildren, and even great-grandchildren will know what to do with; or you go broke. Most entrepreneurs fail miserably. If you want to guarantee a good living — one that will offer you a successful, stable career and a nice inheritance for your kids — listen to your mother and become a doctor, lawyer, or businessperson.

What makes some entrepreneurs successful is the same thing that makes others successful: relying on strengths and avoiding weaknesses. To be sure, entrepreneurs have an upper hand (or at least I like to think so): the energy level is higher, the confidence level is higher, and with time, entrepreneurs have a higher tendency to acquire subject-matter expertise. But success comes not from those things alone, but by leveraging core competencies. What makes me successful (sometimes) is that I combine my entrepreneurism with my strengths in taking calculated risks, decision making, and building teams of people I admire.

If you are an entrepreneur, use it to your advantage. But if not, don’t try to become one. (It won’t work — and why try to contract a disease? You wouldn’t try to get the measles). Instead, figure out what you do best and aim to do it better than anyone else. And if your organization needs an entrepreneur for it to succeed, just hire one.

Jeffrey M. Stibel is Chairman and CEO of Dun & Bradstreet Credibility Corp. He is an entrepreneur, a brain scientist, and the author of Wired for Thought: How the Brain Is Shaping the Future of the Internet.

 

The Heart of Entrepreneurship

Last modified on 2011-08-20 06:27:43 GMT. 0 comments. Top.

Suddenly entrepreneurship is in vogue. If only our nation’s businesses—large and small—could become more entrepreneurial, the thinking goes, we would improve our productivity and compete more effectively in the world marketplace.

But what does entrepreneurial mean? Managers describe entrepreneurship with such terms as innovative, flexible, dynamic, risk taking, creative, and growth oriented. The popular press, on the other hand, often defines the term as starting and operating new ventures. That view is reinforced by the enticing success of such upstarts as Apple Computer, Domino’s Pizza, and Lotus Development.

Neither approach to a definition of entrepreneurship is precise or prescriptive enough for managers who wish to be more entrepreneurial. Everybody wants to be innovative, flexible, and creative. But for every Apple, Domino’s, and Lotus, there are thousands of new restaurants, clothing stores, and consulting firms that presumably have tried to be innovative, to grow, and to show other characteristics that are entrepreneurial in the dynamic sense—but have failed.

As for the idea of equating the beginning stages of a business with entrepreneurship, note a 1983 study by McKinsey & Company on behalf of the American Business Conference. It concluded that many mature, medium-sized companies, having annual sales of $25 million to $1 billion, consistently develop new products and markets and also grow at rates far exceeding national averages.¹ Moreover, we’re all aware of many of the largest corporations—IBM, 3M, and Hewlett-Packard are just a few of the best known—that make a practice of innovating, taking risks, and showing creativity. And they continue to expand.

So the question for the would-be entrepreneur is: How can I make innovation, flexibility, and creativity operational? To help this person discover some answers, we must first look at entrepreneurial behavior.

At the outset we should discard the notion that entrepreneurship is an all-or-none trait that some people or organizations possess and others don’t. Rather, we suggest viewing entrepreneurship in the context of a range of behavior. To simplify our analysis, it is useful to view managerial behavior in terms of extremes.

At one extreme is what we might call the promoter type of manager, who feels confident of his or her ability to seize opportunity. This manager expects surprises and expects not only to adjust to change but also to capitalize on it and make things happen. At the other extreme is the trusteetype, who feels threatened by change and the unknown and whose inclination is to rely on the status quo. To the trustee type, predictability fosters effective management of existing resources while unpredictability endangers them.

Most people, of course, fall somewhere between the extremes. But it’s safe to say that as managers move closer to the promoter end of the scale they become more entrepreneurial, and as they move toward the trustee end of the scale they become less so (or, perhaps, more administrative)

 

Does an Entrepreneur Need an MBA?

Last modified on 2011-08-20 06:19:06 GMT. 1 comment. Top.

by Stephen Greer

I started my career as an entrepreneur at twenty-four years old, right out of college. I ultimately built and sold a $250 million global scrap metal company, an experience I wrote about in my book Starting from Scrap. HBR wrote about my experiences in the December issue.

After my book came out, I visited several U.S. business schools and met with MBA students to talk about my experiences launching a company in emerging markets. Many of the students who came to hear me speak were aspiring entrepreneurs in the process of getting MBAs. Many of them asked similar questions: “You didn’t get an MBA, nor did many other successful entrepreneurs, so if I want to start my own company, is business school a worthwhile experience? Is it worth paying all this tuition — or will my degree just be a resume-builder?”

I once had a conversation about this topic with Dr. John Yang, the dean of the Beijing International MBA program at Beijing University. Here’s what he had to say: “In my opinion, entrepreneurship is a matter of the heart, and education is a matter of the brain. It is difficult to teach a heart.”

I share his perspective. By definition, an entrepreneur is one who takes risk. It’s an attitude and an appetite, one which may be hardwired into one’s personality. Education can influence one’s attitude toward risk: for instance, understanding the principle of diversification or the long-term returns of equities versus bonds may make an investor more willing to create a “riskier” stock portfolio. But ultimately, can you teach someone to really enjoy taking risks? I don’t think you can.

When I think about the value of an MBA for aspiring entrepreneurs, I see a parallel with the military. Countries spend billions of dollars training soldiers so they’ll be ready for combat — they’re taught to fire rifles and operate in simulated high-pressure situations. But that training only goes so far. A Marine colonel once told me that he never knows how a soldier will respond — whether he’ll hide in his foxhole, run in the other direction, or stand and fight as he’s been trained #8212; until the bullets start flying. How someone reacts in times of great stress relies largely in instincts and the makeup of his or her personality — and training only takes you so far.

The same is true with entrepreneurship. Understanding strategy, finance and marketing can be very helpful. But it’s also important to possess self-confidence, a need for independence, energy and passion, curiosity, and an ability to communicate ideas. If you don’t have these natural assets, you’ll struggle as an entrepreneur.

I’m lucky, because those are personal attributes that I have. I don’t have an MBA, but I’ve picked up many of the business skills I needed during more than 15 years running a company. (My grandfather referred to me as having an MBA from the School of Hard Knocks, whose official colors are black and blue — an expensive education that makes Harvard Business School appear inexpensive by comparison). Many of the lessons I learned from those tough and painful experiences I might have learned in an MBA program — and if I’d learned them earlier, my company might have been even more successful.

As the HBR article makes clear, if I’d understood the use and importance of financial and inventory controls, I could have prevented millions of dollars in fraud. Perhaps studying cases about companies that had grown too fast and lost control of both their finances and the quality of their products would have encouraged me to expand at a more sober pace. We wasted years trying to re-organize after over-expanding and perhaps missed countless opportunities in the process. I could have saved or made a lot more money had I taken some courses in business law or venture capital financing. (We ended up getting strong armed by our investors, and they got away with it due to our early-stage naiveté.) I also would have benefited if I’d known more about human resources and the need for well-designed compensation and incentive systems. These are just a few of the tools you can get in business school — and they’re all tools I wished I’d had.

So I believe MBA programs do give future entrepreneurs valuable tools to help them mitigate risk and increase the probabilities of success. But even with those tools, only you know whether or not you have the heart to execute on the opportunities we all recognize to launch a compelling new business. That is when the real bullets start flying.

 

 

How to Prepare to Be Your Own Boss

Last modified on 2011-06-28 10:58:06 GMT. 3 comments. Top.

Five tips for young hopefuls to consider before hanging their own shingle

For aspiring entrepreneurs, especially new college grads opting to be their own boss rather than report to one, the task of getting ready to launch a business can be overwhelming. Consider these tips from entrepreneurs who learned how to position a new business for success from the start.

1. Get educated. Prepare to take the entrepreneurial leap by learning about your future business, whether it’s through graduate school, technical training, or simply reading and “being a sponge” for related information.

Andrea Bloom, a graduate of Harvard Business School and owner of ConnectWell, a provider of innovative corporate wellness programs based in Pleasanton, Calif., attends alumni events and panels discussions with entrepreneurs which, “provide ideas to help you move forward, rather than just corporate business leaders telling you something won’t work.”

After Becky Ruby, owner of Indianapolis-based floral design shop lilly lane, graduated from Butler University with bachelor’s degrees in journalism and arts administration, she worked in the nonprofit sector before pursuing her passion for flowers – and eventually earning a certificate from the Chicago School of Floral Design. But when it came to learning how to run an actual business, she hired a coach, Charles Polcaster, and never doubted her talent.

2. Get “intrapreneurial.” Thinking and acting like an entrepreneur while working for someone else, also known as intrapreneurship, can be another stepping stone to business ownership. Take Peggy Paul, founder of SheTaxi, a website that provides content focused on women’s issues, for example. While working in corporate philanthropy, she learned everything from business planning to the importance of a company board.

“[Then], I realized with SheTaxi that I needed the support and perspective [of a board] to help me establish clear objectives and stay focused,” Paul says. “As an entrepreneur, it’s easy to want to do it all, and my advisory team keeps me on track.”

3. Get comfortable with failure. Michaela Conley of Washington, D.C.-based HPCareer.net, a social media company focused on advertising careers in the health promotion industry, found that “trial and error” offered some of the best training to grow her business as she learned quickly from her mistakes.

On the other hand, Lynn Griffith, founder of Welcome Events, realized she was an entrepreneur after she was fired from her 10th job in two years. “I had a total intolerance for working for people who I either did not respect or did not have the knowledge and ability I felt I had,” says Griffith, whose event management company is based in Fort Lauderdale, Fla.

While you might not want to go out and get fired from your day job to light your entrepreneurial fire, the ability to seek patterns of failure can lead much more quickly to the path of success.

4. Get out there. In many ways, entrepreneurship is considered a “contact sport.” “You can’t run a business sitting behind your desk,” says Denise Praul, founder of Accurate Tax Management Corp., an Indianapolis-based tax appraisal firm. “Get out into the world and start meeting people.”

Serial entrepreneur Larvetta Loftin took that rule a step further by creating her own group, Leading Ladies International, because she felt there were not enough outlets to empower women.

Dava Guthmiller of Noise 13 Design, a branding and design firm based in the San Francisco Bay area, also created a women’s network, Pow.Wow Network in San Francisco. She sought out other entrepreneurs to find talent, support and potential clients. Whether you join an established group or create your own, networking is an important element for any small business trying to get off the ground.

5. Get fully committed. Fear of starting a business can be your worst enemy, but don’t let succumb to it. Attorney Joan Champagne dealt with the “scariness” of starting her own firm by turning to a mentor, who ultimately advised her that the fear never totally goes away and she’ll have to get used to it. “I’m still adjusting…I’ll do what I have to do,” Champagne says.

“There’s never going to be the perfect moment to start a business,” adds Kristin Kuhlke Cobb, founder of Cupcake, a Charleston, S.C.-based specialty bakery. “But, there are moments you know you’re fully committed. If women can manage a household with kids, a husband, family, etc., beautifully, why can’t we run a business beautifully too?”

 

5 steps for getting your business up

Last modified on 2011-07-02 18:49:11 GMT. 6 comments. Top.

If you’re reading this, it means you’re interested about starting a business. Now it’s time to focus your entrepreneurial spirit using the following five steps.

1. Look for that “aha” moment
Sometimes the inspiration for business ventures comes from what’s around you–or from what isn’t. Take Entrepreneur magazine’s home base of Irvine, Calif. The lack of fast-food restaurants in the business area meant treks across town for lunch, prompting two young men to ponder, “Wouldn’t it be great if we could get some good food delivered?”

Rather than waiting for someone else to capitalize on the idea, they purchased one of Entrepreneur‘s business startup guides and launched a restaurant delivery business. So far, it’s served more than 15 million people.

Netflix provides a similar example. After founder and CEO Reed Hastings got charged $40 for returning a rental movie late, he didn’t get mad; he got inspired. That $40 led to a billion-dollar online DVD rental business.

The lesson? Everybody kvetches about what’s missing in their corner of the world, but only a select few–the entrepreneurs–do something about it. It may be cliché, but it’s true: Where there are problems, there are opportunities.

2. Plan ahead
You’ve got the inspiration. Do you really need a business plan?

Plenty of people argue yes. One is Sean Hackney, who co-founded Roaring Lion Energy Drink in Sun Valley, Calif., and grew it from a $62,000 investment to the No. 2 energy drink in bars and nightclubs. Hackney says writing a business planwas “absolutely” worthwhile: “I had a lot of stuff in my head that needed [to be] put on paper.”

Entrepreneurship professor William B. Gartner of Clemson University in South Carolina analyzed data from the Panel Study of Entrepreneurial Dynamics, a national survey of more than 800 people in the process of starting businesses. He found that writing a plan greatly increased the chances a person would actually go into business.

“You’re two and a half times more likely to get into business,” Gartner says. “People who write business plans also do more stuff.”

That stuff includes researching markets and preparing projections, which is valuable in itself, and also increases the chances that an entrepreneur will follow through. And if you want to get funding from banks, VCs or government agencies, a business plan often is required.

But more isn’t always better. Aim for 20 to 40 pages.

“The shorter, the better,” says William Bygrave, a professor emeritus at Babson College in Babson Park, Mass., and longtime entrepreneurship researcher. “And don’t have any numbers you can’t explain instantaneously.”

3. Value your business
Unless your startup funds are coming out of your own pocket, someone will have to value your business. Be prepared for a reality check: If investors say your startup is worth $1 million, then that’s what it’s worth. You might think it’s worth more and be able to back that up by pointing to, say, $2 million in liquid assets. But unless investors agree, you’ll have to live with their valuation.

That’s one example of how sometimes valuing a business is like pricing a home. Here’s another: comps. Use sites such as BizBuySell and BizQuest to determine what similar companies in your industry and geography are worth. Other potential sources are accountants and lawyers who specialize in your industry and geography.

4. Find the right location
Here’s another similarity with real estate: Location equals money. “In the brick-and-mortar retail world, it’s said that the three most important decisions [you'll make] are location, location and location,” says Irene Dickey, a lecturer in management and marketing at the University of Dayton’s School of Business Administration in Dayton, Ohio. “Careful determination of new sites is critical for most retail and consumer service businesses.”

For example, look at neighborhood traffic generators, such as other retailers that draw people to the area, industrial or office parks, schools, colleges and hospital complexes. (Or lack thereof, as in the case of the Irvine restaurant delivery business.) Consider both highway and foot traffic if most of your customers will be coming in that way as opposed to, say, the Internet.

While you’re at it, look for competitors. “Quite simply, the best place to be is as close to your biggest competitor as you can be,” says Greg Kahn, founder and CEO of Kahn Research Group in Huntersville, N.C., and a behavioral research veteran who’s done location research for Arby’s, Buffets Inc., Home Depot, Subway and other major and minor players. “By being in close proximity to your competitors, you can benefit from their marketing efforts.”

5. Find your first customers
Your first customers are key–and not just because they’re turning on the revenue spigot. They also legitimize your idea, demonstrating that there actually is a market for your products and services.

They’re also a source of valuable feedback that will help improve your business so more customers keep coming in. Don’t overlook the opportunity to ask if you can turn some of the positive feedback into testimonials.

Where do you find your first customers? The answer varies somewhat based on your industry, but one common strategy is to leverage your personal and professional contacts–and their contacts. Those could include former employers, employees and customers, contacts within your civic activities, such as Rotary or Kiwanis, and tradespeople and professionals, anyone from your dentist to your plumber.

Consider sending each one a personal letter, then follow up with a phone call a week to 10 days later. In this letter, announce your new business and offer something, such as a free consultation or a special discount, or even a finder’s fee for any referrals they send your way.