Friday, December 17, 2010

What do You Need to Know and Have in the Bank to Start or Buy a Business?

The answer to the question I get alot about starting a business will be answered in several sections. You will need some combination of the following to get my encouragement to start your own business:
1. Adequate personal capital
2. Adequate risk capital
3. Industriousness and enthusiam (borrowed from Coach John Wooden)
4. Take over (via leveraged buyout) a business you’ve had a significant profit and loss role in with 3 consecutive years of profits
5 Expert skills which will keep you ahead of the competition
6 Some appropriate combination of the above that will give you a sustainable competitive advantage
7 Successful track record owning a different business
8 Reasonable expectations of growth
I’m going to answer these one by one, and maybe add a few other points if I think of them later. The actual yes or no answer is mostly dependent on these factors, but I’d need to personally talk to you to try to shoot down your dream – as a favor to you I’ll try to stop you if I think it is a bad idea.

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