The Owner's Manual for Small Business. Rhonda Abrams

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cut my head ice skating. But I continued.

      You learn you can live with bruises; they go away. And almost no falls are truly life-threatening. The same thing is true in business. You’ll make mistakes. They’ll bruise your ego or your balance sheet. They’ll knock the wind out of you, and you may have to sit it out for awhile. But if you get back in, you’ll be stronger, better, more confident.

      A ski instructor once told me, “If you’re not falling, you’re not learning.” So one thing I do when I fall—in sports or in business—is ask myself, “What did I learn?” When I make a mistake, I try to reflect on what I learned from that experience.

      Famed 49ers football coach Bill Walsh told me, “Some people think it’s either win or lose. But every game is followed by another … You’re always preparing for the next one … Even in the process of losing … you’re improving and refining your skills, and how well you perform when you lose is important in determining whether you will eventually win.”

      So be gentle on yourself when you take a risk and it doesn’t work out quite right. Don’t use the word “failure.” Very few of us fail entirely. We just fall down, make a mistake.

      You’ll find it far easier to take more risks if you pick yourself up, learn from each experience, forgive yourself, and move on.

      It’s also important to remember the risks associated with not taking risks. Often we think the safest course is to stay in one place, try to be content with a miserable situation. But that might be the worst course of action of all. We may have misjudged the level of security we truly have. Or even worse, we may slowly eat away at our own sense of worth, our own happiness.

      So if you’re one of those who think you’re not a risk taker, why not challenge yourself? Take a few small, unimportant risks. Allow yourself to make mistakes. Try again. You may surprise yourself and find you’re more of a risk taker than you ever imagined.

Succeeding in Your First Business

      I’m what’s called a “serial entrepreneur.” I’m now running my fourth business; I doubt it will be my last. I’m not alone. Many successful entrepreneurs build one company after another, expanding the scope and size of each subsequent company.

      If you’re new to the entrepreneurial life, it’s helpful to know your first business may not be your last. Many first-time entrepreneurs believe they have to be a huge success the very first time they’re the boss. They don’t. You can become a big success by starting small.

      It’s natural—and desirable—to have big dreams and big goals. Just remember, you’re going to be learning a lot this first time out. You’re getting used to dealing with customers, making sales, devising marketing plans, handling finances, adjusting to the risk and responsibility. All of that takes time.

      Moreover, as you increase your knowledge of your market, your product or service, and you make additional contacts, you’ll almost certainly decide to change many aspects of your business. Eventually, you may choose to close your first business and start another.

      Since it’s your first business—not your last—why not start with what I call a “training-wheel business?”

      By “training-wheel business,” I don’t mean to be insulting, or to imply that’s it a business to be run by kids. I mean choosing a type of business that provides enough support to the first-time entrepreneur so that when you make the inevitable mistakes, you won’t fall so hard.

      My own “training-wheel business,” for instance, was my management consulting practice. I was a consultant for fourteen years, and if I didn’t attract and retain clients, I couldn’t keep a roof over my head or food on my table. It was certainly a serious—and fortunately, successful—business.

      But consulting is the type of business that is a perfect example of a “training-wheel business.” Consulting costs little to start: I needed a computer, business cards, and a phone line. The overhead was low: I worked out of my home and my advertising consisted of attending networking events. All of that meant I had more time to build and grow my business; I had more time to learn.

      Making a product? Sell it first at local crafts fairs instead of trying to get it in department stores. Becoming a consultant? Start with small businesses instead of trying to land corporate clients.

      If you’re new to business, give yourself the opportunity to learn. After all, as I’ve learned, you’ll have plenty of other chances.

Keys to a “Training-Wheel Business”

      

Low start-up costs. If you need a lot of equipment, facilities, or staff to start, you’ll have to borrow or raise money or use up all your savings in start-up costs. Avoid business concepts that require large up-front expenditures, so you can get into business sooner.

      

Low overhead. Low fixed expenses will make it easier to pay your monthly bills. Avoid businesses such as manufacturing and retail, which require inventory, raw materials, high rent, or high labor costs. Instead, choose businesses with low overhead such as independent sales, consulting, and most service businesses.

      

Proven product or service. It’s hard to sell customers on a new idea or new product. It’s a lot easier to get a piece of an existing market than to build a new one—even if you have competition. If your product or service is too new, it takes much longer to build a customer base.

      

Established marketing channels. If you have to be creative to reach customers, it’s going to cost a lot and take time. It’s much easier to sell products or services through proven methods such as trade shows, networking events, and newspaper advertisements.

      

Simple sales structure. Many first-time entrepreneurs are attracted by multilevel—or network—marketing programs. These have complicated sales structures, focusing on building “down lines.” Avoid these. Instead, look for businesses where you sell directly to the customer/client or with very few layers between the manufacturer and the customer.

      

A niche. It’s much easier to compete for customers when you specialize. By clearly targeting a specific market—a specific industry or demographic group—you’ll make the most of your marketing dollars and can command higher prices.

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      Your Business Concept

      Your Business Concept

      Meeting needs is the basis of all business. You can devise a wonderful new machine, but if it doesn’t address some real and important need or desire, people won’t buy it, and your business will fail. Even Thomas Edison recognized this fact when he said, “Anything that won’t sell, I don’t want to invent.”

      The success of a concept often hinges on whether it does something newer or better than anything else. Being newer or better can take

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