Should you start your own business?
Professional bodybuilder Jeff Willet always knew he would have his own business.
“I thought I would one day traffic my career to open my own gym,” said Willet, the owner of Jeff Willet's Powerhouse Gym in Adrian, Mich. “It was a long-term aspiration.”
With unemployment high in many areas and many people feeling nervous about their jobs, going into business for yourself might be a tempting idea. And for many local small-business owners, striking out on their own has led to both happiness and success. But be warned: As Willet and other local entrepreneurs know, getting a new business off the ground requires lots of heavy lifting.
Willet holds a bachelor’s degree in business and exercise science and has found success in business to be just as much work as winning a world championship.
He said he knew that a high percentage of businesses failed within the first two years and an even greater number closed their doors in the first five years. Willet didn’t want to be in either category and found help from his bankers, who helped coach him on the particulars of being an entrepreneur.
“I didn’t know what I would need (in terms of capital), but they could tell me,” he said. “I had a business plan and they worked with me to help me get to that level and the people in my life helped me as well. It really made a difference.”
Patrick Quinlan, professor of business at Adrian College, said the biggest mistake people make when starting a business is “starting the business without sufficient capital.”
Quinlan added a second mistake people often make is not knowing their target market.
“Most markets are comprised of a number of different groups, each having somewhat differing needs,” he said. “Not intentionally targeting one or more of these groups often leads to a product or service that, in a competitive environment where others are targeting, fails to trigger a consumer response.”
Margaret O’Malley, owner of Guided By Grace in downtown Adrian, took a different route to business ownership. Born in Chicago and raised on Detroit’s west side, O’Malley first came to Adrian in 1994 to work for the Adrian Dominican Sisters as director of worship.
“I had thought about starting a business in general terms on and off for years,” she recalled. “As I approached my 50th birthday, I started to think it was now or never.”
O’Malley did some serious soul-searching and research and decided to open a store for Catholic-themed books and other items, both of which appeared to be in short supply when she started out in 2003. She started first in her home and then expanded to a storefront downtown as demand rose for her products.
“I don’t think anything actually prepares you for being an independent business owner,” she said. “I thought a degree in business management and one in pastoral ministry would be a good mix for opening a religious bookstore.”
William Bachman, who teaches in the Adrian College business department, said he thinks one of the biggest mistakes people make in starting their own business is making that decision because they don’t want to work for someone else.
“Not only must a person have a passion for the product, service, or process he or she is offering, but the business must be able to offer or add more value for the potential customer than that of any of the competition,” Bachman said.
O’Malley added classes in entrepreneurship, marketing and inventory management to supplement her knowledge base. She also created a business plan and because she started small and worked out of her home, she did not approach a bank for financing.
“I began with my savings and some private investment,” she said. “If I had to do it over, I probably would have had more money set aside and probably would seek bank financing. I also would have stuck with the business plan and kept it home for at least a full year before branching out into a storefront.”
Bachman said most start-up businesses are “under-capitalized.”
“This most likely is caused by not having a complete, realistic business plan, not only for the start-up but for the first few years,” he explained.
Quinlan said he also sees businesses fail when owners do not have a good record-keeping system. He strongly recommends hiring a professional accountant when opening a new business.
“Not having a good financial strategy, including a good record-keeping system, is often a deficiency,” he said.
Donna Baker, owner of Donna Baker and Associates in Adrian, said a good business plan is important.
“Work with someone on all aspects of planning so you have no financial surprises,” said Baker, who has taught accounting at Siena Heights University in Adrian for 18 years. “The business plan also should look at the market research and potential customers.”
She recommends working with a person who has experience in starting a business.
“So many good ideas fail because the person does not look at startup costs, advertising and market to the fullest extent and then cannot fund the business,” she said.
Willet and O’Malley agree being self-employed takes a strong commitment to wearing many hats and understanding that when you make a bad decision, you usually have only yourself to blame for it.
“I think to make your business work you have to have a willingness to grind away at it — you have to be in it for the long haul, to be willing to roll up your sleeves and do every dirty job,” Willet said.
O’Malley points to the importance of being patient.
“You need to know how long it will take before you will be making money,” she said. “Realize that it is a lot of work. Time is a very big issue,” she said. “I knew what I was getting into but it is all-consuming. Even when you are not working, you’re thinking about it.”