Crucial Steps to Getting Started

Entrepreneurs and startup experts weigh in on what they consider most important when launching a new business

by Karen E. Klein

I am taking a basic product and enhancing it to make it more attractive for my customers. What is the most important thing I can get right in order to start off successfully in business?

—L.A., Redlands, Calif.

We posed your question via e-mail to a number of entrepreneurs and startup experts and got a variety of responses. Here are their thoughts:

Profits Right Away

"The one thing most important to get right is profitability. Many new business owners start their company with the goal of being profitable down the road, and then never get there. The capital they started with is gone, and they can't sustain themselves. They will take out loans, borrow from their savings, or find investors to start their company, and get enough money to run the business for one year or two years without turning a profit. Profit, even if it is a small amount, is the score of how well you did in your business. You are winning the game if your business is in the black. If you're profitable, chances are you are doing a few things right: 1. Customers are purchasing products or services because you offer marketable products or services; 2. Your sales and marketing strategies are being fulfilled; 3. There is attention and intention on the money; and 4. There is a thoughtful financial plan and more money is coming in than out." —Lorenda Phillips of Los Angeles-based Phillips Coaching & Consulting.

Be Sure of Support

"Make sure that all affected family members are supportive of your venture. Starting a new business takes a huge amount of time and money. Buy-in and support from spouses, significant others, children, and partners will make a critical difference for you when you're spending long hours away from home." —Gene Marks, president, Marks Group, based in Bala Cynwyd, Pa.

Control Your Costs

"We certainly know what will kill a business, and that's undercapitalization—running out of money. But successful new business owners will have tight controls over their money and truly not spend what they don't bring in. You must have a business plan that sets out terms of profitability at each step along the way. Growth and increased sales do not ensure increased profits. Control of costs is also key." —Denise Kotula, president of West Hollywood (Calif.)-based DK Strategic Consulting.

Don't Start From Scratch

"You cannot be successful by starting a small business. You should start an 'emerging' or 'growing' business if you don't want to stay small forever." —Donald Stukes, certified management consultant at Cypress (Calif.)-based SSM Consulting Group.

Research the Market

"Determine whether there's a real market for your product or service and whether you know how to effectively reach that market. Make sure you have a written business plan that will make sense to a bank loan officer or any other knowledgeable person who reads it. Finally, figure out if you have or can get sufficient financial resources to get started." —Jack B. ReVelle, chair-elect, Orange County chapter of SCORE.

The Right Business Partner

"The answer, at least in my opinion as someone who has lost $4 million, is the right business partner. The majority of startup companies have two key people at the top. One person is the sales and public persona of the company and the other is production and the internal operational manager. If these two people aren't in agreement about what the business should be, or have different goals for the company, then no business plan, venture capital investor, cash infusion, employee incentive program, or publicity will help. The company will fail. As for me, my business partner and I were in perfect alignment—until he started drinking, that is. And then his No. 1 goal became getting his next glass of whiskey, and I ended up having to fire him, but not before the company had spun out of control.