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The Business Start-Up Kit: Everything You Need To Know About Starting And Growing Your Own Business
By Steven D. Strauss
The Business Start-Up Kit: Everything You Need To Know About Starting And Growing Your Own Business by attorney and small business columnist Steven Strauss is a solid introduction to starting a new business.
Strauss covers these topics very well:
* Buying A Franchise Or Other Business
* Planning Your Business
* Laws, Taxes, and Insurance (A Brief Overview)
* Bootstrap Financing
Strauss tells us that one million new home-based business start-up every year and that as many as 15-40 million home-based businesses exist in the United States. Quoting an SBA survey, we learn that almost 25 percent of all home-based businesses have a yearly gross income between $100,000 and $500,000.
Strauss says home-based businesses have a big advantage—low overhead. And, some home-based businesses grow into much larger endeavors. We learn that Disney, amazon.com, and Microsoft are among some businesses that originated as home-based businesses.
Strauss writes: "Maybe your dream is to be a multimillionaire. That’s fine. But so too is a dream to create a business that makes enough money to allow you to stay home, play with the kids… and shoot a round of golf on Friday afternoons. That’s fine too. That you are the boss and can do what you want is one of the best things about starting your own home-based business. Doing what you want—that’s the whole idea."
The Business Start-Up Kit emphasizes that industry research, planning, and letting the numbers do the talking are crucial to success.
Strauss writes: "For example, assume that your business is looking to add a new product line. How do you know if it will work? Such an important decision should not be based on guesswork or hunches. Instead, you have to let the numbers do the talking. Knowing how to crunch the numbers—figuring out what it will cost you to launch the new line, how much you can expect to make, and how quickly you can reasonably expect to make it—will make the decision easy for you. Can you afford a new product line? Will your cash flow allow you to afford it? What kind of return on this investment of capital and time can you expect? Let the numbers do the talking."
Throughout the book, Strauss encourages the reader by interjecting interesting tidbits about successful entrepreneurs. And, Strauss tells those who fear failure to let fear motivate them and not to give up easily.
We learn that Microsoft had only $16,000 in revenue and three employees in 1975. In 1976, Microsoft had $22,000 in revenue and six employees. It lost money both years. Strauss says that many entrepreneurs might have been tempted to give up after two dismal years.
To help entrepreneurs stretch their initial investment, Strauss suggests: "You must invest your time, money, and energy in only your best, most profitable ideas."
Strauss says entrepreneurs should enter a field they feel passionate about and an area where they see a need or an opportunity.
For example, Strauss writes: "…when Chris Haney and Scott Abbot got together to play a board game one night, they choose… Scrabble. As they pulled out Chris’s Scrabble game, the two friends discovered that some of the tiles were missing. As they went out to buy another Scrabble game, Chris thought: This was the sixth game of Scrabble he’d bought in his life. The two friends decided then and there to start a business and invent a board game. … the two friends sold more than 20 million copies of Trivial Pursuit within three years."
Strauss also discusses legal mistakes to avoid when starting your business. Strauss says many entrepreneurs will need to learn some basic law about:
* Avoiding negligence
* Protecting your ideas and products with copyrights, trademarks, and patents
* Basic employer-employee law
* Laws regulating your industry
Strauss says one of the most common mistakes entrepreneurs make is to operate as a sole proprietorship or as a partnership, which can put your personal assets at risk. Strauss writes: "If instead of a sole proprietorship or partnership, you start the business as a corporation, LLC, or limited partnership, you avoid that possibility [not always] and thereby greatly reduce your risk." (Aside: In another chapter, Strauss correctly discusses the limited partnership in detail. But, this paragraph is a bit awkward. A limited partnership itself provides no protection to the general partners. Those with limited liability are typically the investors, who aren’t active in the management of the business. Sometimes, another business structure, such as a corporation serves as the general partner. But, a limited partnership, itself, doesn’t provide full liability limitation to the entrepreneur.)
In addition to providing encouragement and help with developing a business strategy, Strauss also provides a list of books, websites, and other resources for more information at the end of each section.
I highly recommend The Business Start-Up Kit: Everything You Need To Know About Starting And Growing Your Own Business to new entrepreneurs.