Posted on 30 December 2012
By Mark Miller
Jeff Williams left an eighteen-year corporate career as a sales and marketing executive to start his first entrepreneurial training company in 1988. He launched Bizstarters.com in 2000, which focuses on helping 50+ entrepreneurs launch businesses. In 2008, he launched the Virtual Incubator Coaches Network.
Jeff is a nationally known expert in starting a business and is frequently quoted in national business media such as BusinessWeek.com, Kiplinger’s Personal Finance magazine, MSNBC and Fortune.com.
Jeff’s latest e-book, Start Your Business Now, is a step-by-step workbook that walks would-be entrepreneurs through the key steps for getting started. I talked recently with Jeff about the key challenges facing older entrepreneurs.
Q: Jeff, you’ve been working with older entrepreneurs for many years. It’s a great solution for some people in their fifties and beyond who want to re-boot their careers, perhaps not for others. How can you tell if someone fits the profile?
A: The number one factor we look for in a prospective coaching client is how well he (or she) visualizes using his business skill or other talent to solve a specific problem for either businesses or consumers. If he can clearly see his solution to the specific problem we find that he is much more confident and determined to bring his idea to life as a new business. And these two traits differentiate the “blue sky dreamer” from a successful new business owner.
A: Far and away the most common reason we see for talented people not moving forward with their entrepreneurial ambition is their uncertainty that turning their business idea into a fully functioning business will produce the level of income they wish.
A good number of prospective 50+ entrepreneurs also are burned out on work and concerned about how many hours of work per week they will need to put in to launch and grow their business. And some over-50 folks are reluctant to completely leave the world of corporate work because they are uncertain about how to replace their health insurance coverage. At one time, the size of the start-up cost was also an obstacle, but today most of our clients launch for well under $10,000, so that’s not really an obstacle anymore.
Q: How can would-be entrepreneurs determine if they have a good idea – one that will find traction in the market, generate sales and provide a living?
A: Well, as I already mentioned the prospective entrepreneur needs to identify a problem she can solve with her business. We suggest that she take out a piece of blank paper and write down a description of the problem. Once this opportunity is identified, then the prospect needs to realistically project how many dollars a typical interaction produces in this kind of business.
Dividing the prospect’s income goal for the first year in business by the dollars per transaction shows how many transactions are needed to produce the desired income. At this point, the prospect needs to ask herself: Can I realistically do this in a year by myself? If the answer is no, then she needs to rescale her business concept.
Q: How much money will it cost for most entrepreneurs to get started? How much capital should be set aside, and what are the best sources for raising it?
A: Probably 90 percent of our coaching clients end up starting a business in one of three categories– consulting, selling a knowledge product or service or selling product via a web store. All three types of business can be started for relatively small amounts of money, thanks largely to easy availability of online services.
Let me give you an example. When my team and I were designing the original Bizstarters website in 1999, there were few “off the shelf” shopping cart services available, so we ended up investing more than $8,000 to have a shopping cart custom designed. Today, an e-merchant can grab all of the power we had, plus much more, for a cost of less than $800 per year.
Far and away the largest amount of money the new entrepreneur needs today is to have a cushion in the bank to cover his family expenses for 3-6 months, typically an amount in the $10,000-$25,000 range This is a relatively small enough dollar amount that most new 50+ entrepreneurs can cover from their savings.
Q: You’ve assembled a very detailed workbook to help entrepreneurs conceptualize, build and launch a business. In your experience, what are the one or two steps entrepreneurs consistently fail to take before they startup a business?
A: Well, of course, if they use our workbook and related start-up course they won’t miss any steps! But for those who have no professional guidance, I would say that the most commonly missed organizational steps are failure to complete some sort of written description of their business strategy and projected financial results; and failure to build a strong sales prospecting plan and/or not putting enough dedication into sales prospecting – many new business owners get lazy about continually looking for new customers.