Inc.com reported on a recent survey conducted by Wells Fargo/Gallup Small Business Index. The results are instructive! If you’re contemplating starting a business, consider what others who have already done it had to say:
* 73% of the 600 small businesses were primarily funded by the owner’s personal savings.
* 37% were funded in part by loans and lines of credit.
* More than half said it would have been easier to start their companies had more money been available.
OK, those aren’t so surprising. But what surprised me was:
* 49% of respondents said advice from other business owners also would have made their start-up days easier
* 39% said a better understanding of financial management would have helped
What advice can you take from these survey results?
1) Start preparing by upping your savings, right now. It will involve modifications to your lifestyle. That’s good — get used to it. The rewards are farther down the road. (Suze Orman makes a similar point today. She says, “Set aside separate savings that will cover your family’s finances for at least a year if you decide to become an entrepreneur. If you can’t imagine where to come up with the money, it’s time to get back to basics: Scour your spending and make sacrifices so you can build up your entrepreneurial financial cushion.”)
2) Learn from others. That means
a) Get to know other business owners who you will be able to ask for advice. Join your local Chamber of Commerce or other business organization. That’s where you’ll find them. And,
b) Take some classes in finance or be prepared to hire a good accountant — or both.
[A tip of the hat to Business Opportunities Weblog for finding the Inc. article.]