Key Pointers to Starting a New Business
Maria Contreras-Sweet, a former corporate executive and one-time government official, started Promerica Bank, the first Hispanic-owned bank, in Los Angeles in 35 years. In an IBM webcast during Global Entrepreneurship Week in November, she gave the audience pointers on how to start a successful business. She advised future entrepreneurs to do research first before quitting their jobs. “Do some things in the evenings, on weekends and holidays to push that business forward so you’re not burning through your own capital,” she said. A start-up should have a unique product that distinguishes itself from other producs. It could be something new or an innovation of an existing product. To avoid someone from copying your concept, she strongly suggested to trademark and to register the product. Entrepreneur.com has more information on her recommendations.
1. Is your concept unique? If you’re planning to start a business, Contreras-Sweet recommends you ask yourself these questions: “What’s my niche? How do I distinguish myself in the field? What’s the innovation here? What am I fixing that isn’t fixed today?
2. Do you have barriers to entry? “Make sure you’ve trademarked it [and] registered it. What can you do to make yours special that somebody else can’t do?”
3. Choose an emerging market. “You want to be in a place that is growing. You want to be in a place where it has potential to have a long-term viability,” she says.
4. You need a good network. Contreras-Sweet says your network should include your personal confidential network, like a good lawyer, accountant and marketer, along with friends and people who’ll give you a discounted rate until you grow your business. Also network with what Contreras-Sweet calls “disciples of change”–people who’re talking about and promoting your product and thus spreading the word about your company.
You can create your network while still in your job, getting involved in organizations that include your target customers.
5. You have to have passion. “I call it passion, but it really is endless energy,” Contreras-Sweet says. ”
Avoid draining yourself, and make sure you take care of yourself before taking care of everything else.
6. Have good credit. You need to call creditors and rework your payment schedule or ask them to work with you on the interest rate.
“When you have crummy credit, you have to go to private equity or angel financiers or venture capital. Then you’re giving someone else a part of your company because you don’t have enough credit to take out a loan.”
She likens equity capital to marriage. “Once you receive equity capital from somebody, you can’t fire them,” she says. “Equity partners are there for the long haul. You can’t get rid of them that easily. They’re part-owner of your business.” …
Photo by Lars Plougmann