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January 25, 2008

Starting a business

The new year is always a time to set plans and goals. One economic goal that many people have is to be their own boss by starting their own business. What advice do you have for these folks? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, I would certainly encourage people to pursue this dream or goal, but I would also encourage them to be realistic. The number one question you have to ask and hopefully answer if you want to start a business is: Why would anyone come and buy from you, buy what you have instead of going to a competitor?

"Now, one reason may be no one else has what you have to sell, but then you are creating a new market, so you still have to worry about getting buyers. How are you going to attract them? Are you going to attract them with a new or better product, better service, better location, better price? You have to fundamentally answer that question.

"The next thing you have to do is draw up a business plan. This is going to include projections for your cost, for your sales, for your profits and very importantly, when you are sketching out your profits, remember to include as a cost your time.

"And then lastly, something that people don't want to think about, but is absolutely necessary you do, is have an exit strategy. If things don't work out, have a plan for when are you going to shut down, how are you going to pay off losses if you have them and think about that. Hopefully, that day will never come, but you do have to consider that as part of the goal of going into a new business."

Posted by Dave at January 25, 2008 08:00 AM