Characteristics of a Successful Entrepreneur "Be able to sustain a financial commitment to whatever business you start.

Guts: Guts means you must have an entrepreneurial instinct, which is an overwhelming desire to have your own business. You must have the guts and dedication to be completely devoted to your goal. Incidentally, devotion to your goal is much more likely if you have a love for your intended business. Life is too short to start a business that doesn't give you satisfaction and joy. And, through good times and bad times, you will stick with something you love. As Solomon said, "There is nothing better for men (and women!) than they should be happy in their work-so let them enjoy it now." Brains: While appropriate educational credentials are important, entrepreneurial "brains" means more than scholastic achievements. To become a successful entrepreneur, you must have a working knowledge about the business you plan to start before you start it. Common sense combined with appropriate experience is the necessary brainpower. Prudence, follow through and attention to detail are very important. Capital: You will need seed money of your own plus sufficient cash to maintain a positive cash flow for at least the first year. In a future session you will learn how to forecast future cash requirements through cash flow control. Many businesses can be started on a very small scale with a small investment. Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases you don't need starting capital to hire other people because you might start by doing everything yourself. The "do it yourself" start is a good way to learn everything about your business and also makes you better qualified to delegate work to others later on. You can control your risk by placing a limit on how much you invest in your business. Step-by-Step Approach "Hiring good staff members who also share the same philosophy has been very important Decide if you really want to be in business: You will be putting some (not all, hopefully) of your net worth at risk. You will run the risk of becoming eccentric, meaning creating a life that is out of balance, with working hours taking away from other family or pleasurable activities. There may be levels of stress you have not experienced as an employee. Decide what business and where: Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Selection strategy is covered later on in this Session. Decide whether to start full-time or moonlight: There are some interesting advantages and some pitfalls in starting as a moonlight business. (That is, a business you start in your off hours while still working at your current job.) More often than not, the advantages of starting as a moonlighter outweigh the risks: You avoid burning your bridges of earnings, including retirement, health and fringe benefits and vacations.

Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including compartmentalizing your job and business into completely separate worlds. You can avoid conflict of interest with your job by choosing a business that is appropriate for moonlighting, such as: single products, real estate, specialized food, e-commerce, direct marketing or family-run operations. There are great advantages for operating a family business. The family can run the business while you are at work. You have a built-in organizational structure. You can teach your kids the benefits of being in business. But there are also some pitfalls to consider in starting a moonlight business: There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances. (You may need a family member or some trusted person to cover emergencies when you are at your job.) Another problem may be competing with your employer, which, again, is not right. Think of how you would feel or handle this employee if you were the boss. Any kind of conflict with your regular work can jeopardize your job and your moonlight business. Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs. Selection Strategy "As the saying goes, fail to plan and you are planning to fail. Selecting the wrong business is the most frequent mistake that start-up entrepreneurs make. Here is a checklist to help you select a successful one: Take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success. Don't tackle businesses that may be too challenging. It is better to identify a one-foot hurdle than try to jump a seven-footer. Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is." A big mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you. Keep in mind that as a general rule specialists do better than nonspecialists. Wouldn't you be more inclined to take your sick cat to a veterinarian whose practice is limited to cats rather than to a general practitioner? Look for a business that will grow in today's and tomorrow's markets. Many small retail stores are no longer in business because huge stores such as

Wal-Mart and Home Depot provide more choices to the customer and often at a cheaper price. Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc. and the most successful business picker in American history: Mr. Buffett looks for businesses that focus on a "consumer monopoly" with pricing power and long-term predictable growth prospects. Here are two books that will give you invaluable insights into how Mr. Buffett picks businesses to invest in. You can copycat these basic principals to help select your own business. BUFFETTOLOGY by Mary Buffett and David Clark. The previously unexplained techniques that have made Warren Buffett the world's most famous investor. THE WARREN BUFFETT WAY by Robert G. Hagstrom, Jr. Investment Strategies of the World's Greatest Investor. Businesses to avoid are "commodity" businesses where you must compete entirely on price and in which you must have the lowest cost to survive. As Mr. Buffett has said, "In a commodity type business you're only as smart as your dumbest competitor." Most service businesses have pricing power. Pricing power means that you will not need to have the lowest price in order to secure business. Your customers will be willing to pay a fair price for a better product or service. Should you bet on a business you don't know when you can bet on a business you do know? If you intend to manufacture a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging. If your intended business is based on marketing an invention or patent, keep in mind to: First check to determine if there are any issued patents similar to your idea. Be cautious about getting involved with firms that ask for up-front fees to market an invention. No matter what you hope for, you will need a product to test, to show and to get feedback on.

Things to Watch Out "To get ahead in this business you do everything to get the job Impatience Do not let overconfidence short-circuit you from analyzing your selection of businesses carefully. You must not fear of hearing the negative aspects; it is much better to be aware of them and face them early on. Be realistic. Do not become lured by high rewards. They will come if you choose the right business and if you understand every aspect of the business before you open its' doors. Required Activities It is worth repeating again: The most common mistake and the most costly one is not picking the right business to begin with. This is the time for soul searching. IF YOU HAVE NOT DECIDED ON A BUSINESS, DO THIS: 1. On the top of a blank sheet of paper, write an activity you like to do (make this the heading). Do a separate page for each activity or interest you have. 2. On those same sheets list as many businesses you can think of that are related to that activity. 3. On the same sheets list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could do. 4. Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawnshops, auto repairs and fabric stores. EXAMPLE Let's assume you end up with three potential businesses: towing service, selling used cars and auto repairs. You can now make a comparative evaluation using the following checklist (or better still your own checklist) with a 1-10 scoring system. This kind of analysis can help you gain objectivity in selecting your business. Towing Service Selling Used Cars Auto Repair --------------------------------Can I do what I love to do? Will I fill an expanding need? Can I specialize? Can I learn it and test it first? This kind of analysis can help you gain objectivity in selecting your business. How To Evaluate A Specific Business You Have In Mind Here are some questions to help clarify your thoughts: 1. Is it something I will enjoy doing? As Harvey McKay has said, "Find something you love to do and you'll never have to work a day in your life." Also, if you're doing something you love, you're much more likely to stick with it through thick and thin times. My favorite activities are: __________________________ I like to serve people by: ________________________________

2. Will it serve an expanding need for which there is no close substitute? 3. Can I be so good at a specialized, targeted need that customers will think there is no close substitute? For example, in California, nobody comes close to See's Candies. 4. Can I handle the capital requirements? In Session 8, you will learn a simple cash flow control method to forecast your future cash needs. 5. Can I learn the business by working for someone else first? 6. Could I operate as a hollow corporation, without a factory and with a minimum number of employees? For example, if you have in mind marketing a line of furniture, you might consider outsourcing to a manufacturing vendor in China. Cost savings is often the prime objective but you also free up your time and capital. The major risk is the performance of the vendor and your success in developing good relationships that provide mutual benefits. 7. Is this a product or service that I can test first? Your concept of a successful product or service may not be in harmony with the reality of the market place. On a small scale, prove it out first. As Wolfgang Puck states: "I learned more from the one restaurant that didn't work than from all the ones that were successes." 8. Should I consider a partner who has complementary skills to mine or who could help finance the business? Make a "for" and "against" list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the "for's" and on the other all the "against's." Sometimes this will help clarify your thinking. Or, you can use the template provided at the end of this session. We have provided a "for" and "against" template for you to use at the end of this session. 1. Write down the names of at least five successful businesses in your chosen field. 2. Analyze what these five businesses have in common and make a list of reasons that make them successful. 3. Talk to several people in your intended business. Don't be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls: better now than after you open your doors. Take notes if possible. Write down the information as soon as you can. 4. Analyze the competition that are not doing well and write down the reasons. 5. Get Completely Qualified. The best way to become qualified is to go to work for someone in the same business. 6. Attend all classes you can on the subjects you need, for example: accounting, computers and selling. 7. Don't be afraid to ask questions or seek help from the most successful people in your intended business. Decision Time What could you sell or what services could you perform that would make money and you would enjoy? To complete this session you should have decided on a business or at least selected a business you think would be best for you. To get the most benefit out of the next eleven sessions you should have a definite plan in mind.

Top Ten Do's and Don'ts TOP TEN DO'S 1. Live frugally and begin saving up money for starting your business. 2. Learn your intended business by working for someone else in the same business first. 3. Consider the benefits of starting a moonlight business. 4. Consider the advantages of operating a family business. 5. Objectively measure your skills and training against potential competition. 6. Consider subcontracting to low cost suppliers if you're manufacturing a product. 7. Test market your product or service before starting or expanding. 8. Make "for" and "against" list describing the specific business you are considering. 9. Talk to lots of people in your intended business for advice. 10. Make a comparative analysis of all opportunities you are considering. TOP TEN DON'TS 1. Don't even think about leaving your job until you have completed start-up plans. 2. Don't consider starting a business in a field you do not enjoy. 3. Don't risk all the family assets. Limit your liabilities to a predetermined amount. 4. Don't compete with your employer in a moonlight business. 5. Don't be in a hurry to select a business. There is no penalty for missed opportunities. 6. Don't select a business that is too high a risk or hurdle. Go for the 2-foot hurdle. 7. Avoid a business in which you must have the lowest price to succeed. 8. Don't be afraid to seek out and learn the negative aspects of an intended business. 9. Don't let entrepreneurial self-confidence outweigh careful diligence. 10. Don't let the promise of a conceptual high reward deter reality testing first. **************************************************************

************************************************************** Collete Paul:STM Media Inc. Publisher of Trade Magazines My name is Collette Paul. My company is STM Media. We've been in business since 1991, and I am in business with my husband. We have a small publishing company in Redondo Beach, California. I have some pointers that I would like to talk about. One is, if you're going to start a business, one of the most important steps will be deciding what business you're going into. Once you make that determination, make a detailed spreadsheet, which includes as many aspects you can obtain about the business. Go to outside sources to get that information, including people who are already in that type of business. Then assess the risks and benefits very carefully before you jump off the edge. The second point is to be able to sustain a financial commitment to whatever business you start. Every business has a different financial commitment. For instance, my business doesn't have a whole lot of manufacturing equipment. We mainly have computers and people. But, we had

to sustain our living expenses for a long time before we could realize a profit. I believe that you'll have a greater level of success if you find something that you find a certain amount of joy in. If you choose a business that you don't enjoy, I really believe that you'd be doomed to failure. So, if you have something that you really see as a joy rather than work, you have an opportunity to make your business a success. I'm in business with my husband. We planned this business and we've sweated over it. We live it. If we were to do it over again, one thing we would do differently would be to define our individual roles more clearly. His role has been publisher and for many years, I've done everything he doesn't do. That's probably not a good way to go. I think it would be important to identify your strengths and your husband's strengths, or vice versa, and capitalize on those strengths. You might consider it like a contract, and be able to renegotiate that contract depending on how circumstances change in your business.

1. Learn from people already in your business 2. Your financial commitment includes living expenses 3. Husband and wife teams: define your roles Elaine Mitchell:Specialized Veterinarian My name is Elaine Wexler Mitchell. I am a veterinarian and I own the Cat Care Clinic, a veterinary practice dedicated exclusively to the care of cats, in Orange, California. I started the practice after I had been an associate for five years in a small animal practice and decided that I wanted to go out on my own. My husband told me that finding a niche within the veterinary world was my best chance for success, and I do believe that specialization was the right choice. I thought about a lot of aspects of veterinary medicine that I enjoyed, and one was working with cats. I knew that feline practice or feline-exclusive practice was an up and coming specialty. I decided to get involved with that and opened an all-cat practice. Since opening my practice almost nine years ago, it has grown in size every year, and I've grown from being a one-doctor practice to now being a threedoctor practice. Through my specialty, I have become board certified in feline practice. I've written a book; I do some speaking; I'm going to have some television segments on KNBC, hopefully in the next few months. So, it has kind of blossomed from being a regular veterinarian to specializing in one species to even getting involved in different aspects of the media. As far as what has led to success in my practice, I believe it to be many things. One is hard work as well as dedication and a true commitment to what I'm doing and really believing in what I'm doing. Also, hiring good staff members who also share the same philosophy has been very important. We are not a low-cost clinic. I kind of think of us as a Nordstrom-style clinic where we spend a lot of time communicating with our clients, offering good customer service, and taking care of problems after they've had our services here. We have a lot of referrals for our business. Many of our customers are very satisfied and refer other clients to us. I also have many clients who write us cards and letters and always tell us that they've never had so much TLC and personal care as they have with their pets here at the clinic.

1. Specialists can do better than non specialists 2. Customers will pay more for premium services 3. Referrals will build your business

Millard MacAdam:Pro Active Leadership I'm Millard MacAdam, and I head up Pro Active Leadership Consulting and Training in Newport Beach, California. What I'm sharing with you is based on my 16 years' experience as CEO of my own startup business, which began when I was 27 years old. I urge everyone who wants to start a new business to reflect on five key questions. If you come up with solid answers, you are more likely to be successful. The first question is: Do I have a passion to carry out the tasks necessary for the business to be successful? People who go into a business for moneymotivation alone are very likely to fail over time. The second question is: Have I clearly defined a high integrity set of governing operating values that will support the delivery of quality products and services to my customers? Will I be able to promise a lot and deliver more? The third question to ask yourself is: Do I have adequate funding in place, not just promised, to make sure that the business can make it through the first year without having to deal with financial crunches? The fourth question is: Do I have the necessary leadership and managerial skills to implement a complete written business plan that serves as my working guidelines? As the saying goes, "Fail to plan and you are planning to fail." The last question to ask yourself is: Do I know how to attract, select and hire only the best staff members? There's no excuse today for not using modern selection technology along with effective interviewing strategies to hire only the best staff members for all positions in your business. There are other questions you'll want to ask yourself after completing the My Own Business course. However, by answering these five questions, you'll gain a good sense if starting the business you have in mind should be a go or no go for you.

Using checklists will help spot your strengths and weaknesses Sophia Garcia:A-Z Glass Company My name is Sophia Garcia. I own A-Z Glass. I've had the business since 1980. The worst thing I did was mortgaging everything we had in order to purchase this business including our home, furnishing, expensive jewelry, automobiles and a small income unit. That was also the best thing we did because I was afraid of losing everything every day, so it made me work that much harder. When I purchased this business, it was doing the high end. The business had been here 35 years and it was mainly designers and architects. The recession hit and companies were going out of business, yet I was not too aware of this at the time. At that time, there was a push for minority, woman-owned, small businesses. So, I had to get myself certified as a woman-owned, minority, small business. And I had to focus on customers that really valued my certification, and that was the state, the city, and the federal government. So, once I was certified, I was able to bid city contracts. During that time the earthquake hit and the city rioted. These events were blessings that actually promoted our business. The support of my spouse was very important because I work many, many hours. And I have a God, and that helps me. Those two things I couldn't have done without. For me, it has been prayer and going home exhausted and getting back up and always being on call - we're on call 24 hours - that kind of pulled us through the real rough times. To get ahead in this business you do everything to get the job. I sub some work out to a carpenter and if customers call and ask, "Well, do you clean

this or do you do that?" Yes, we do and if we don't know how, we learn how to do it. In hindsight, probably one of the better things I did when I bought the business was that I also bought the building. I had to subdivide the building and turned it into rental offices so I could get income, and that helped us pay the mortgage. I am very happy that I purchased this business. I needed a change. This is probably one of the better things that I've done in my life. It was a lot of work. I'm looking to retire in four or five years. Lots of luck.

1. Some government contracts favor minority, women-owned businesses 2. Sometimes you need to offer more services to get the job Decision Time 1. What could you sell or what services could you perform that would make money and you would enjoy?