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Ground Rules For Starting Your Own Business

Jim McLoughlin

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The content of this blog message is extensive. But this might be the only time a reader will have access to a concise presentation on the subject of "How To Start A Business"  - something superintendents should prepare for in case the desire/need arises later in their careers.

 

Superintendents should always be mentally prepared to start a business at an appropriate time in their careers for the following reasons:

  1. Course operators are hesitant to assure superintendents employment beyond their early to mid 50 years of age generally because it is cheaper to hire less experienced superintendents.

Accordingly, many veteran superintendents face 10 to 12 years of forced unemployment late in their careers - a daunting circumstance that should encourage every superintendent to prepare early in life for the possibility of starting a business later in life.

  1. Because superintendents have a wide range of proven skill sets that are better prepared than most to start a new business.

What Elements Are Needed To Start A Business?

The three steps a potential entrepreneur must execute to start a business are:

  1. Identify a target audience that is not being well-served by society's spectrum of businesses (either because a market void currently exists, or because a bad economy has weakened a previously vibrant market) where a new business can provide needed services/products.
  1. Prepare a due diligence feasibility study to determine: (i) what the competitive quality and fee levels are throughout the marketing region; (ii) whether the target market has the revenue potential needed to support a new business; and (iii) what the minimum cost would be to start and sustain a new business for at least three years while in-house revenues are building to a point where they could support a new business entirely.

 

FYI: Some new businesses can be developed at low cost because: (i) the entrepreneurs' brain power, muscle power and experience come free to the party; (ii) free access to the Internet produces an untold wealth of intangible and tangible assets; and (iii) today's communications technologies allows a new business to create a brand supported by a complete visual image (logo, business cards, stationary, web sites, etc.) virtually free of cost.

 

If a superintendent can't conduct his own feasibility study (a more than likely occurrence) he should hire an experienced consultant to do so for him.

 

FYI: History indicates first and foremost that roughly 75% of all new small businesses fail; and second, that the primary reason why they do fail is because no one conducted credible feasible studies that would have indicated that certain new businesses should never have been started.

  1. Identify the specific personal skill sets a potential entrepreneur must be able to apply to the intended new business to succeed.

What Is The Impact Of A Bad Economy On Starting A Business?

Because bad economies create greater economic needs within society there is, accordingly, more opportunities to start new businesses although they may be of a different nature than in a routine economy. However, definitive feasibility studies will be needed to identify the pricing schedule customers will be able to afford in the bad economy.

 

Examples Of The Two Categories of Start-up Businesses - Outside Of Golf

  1. Addressing a void market: Laura is a knitting guru who noticed that there were no blogs promoting the sale of knitting goods and knitting patterns not only across the USA, but around the world as well.

Accordingly, Laura started a blog (at virtually no cost) a while back that sells knitting patterns around the world and today her blog averages 4,000 hits a month with about half of the contacts ordering knitting patterns at a respectable price.

  1. Addressing a needs market: When the economy went sour back in the 1990s Ken noticed that high tech companies were having a problem affording the technicians needed to keep their in-house tech equipment going because labor costs had sky rocketed. Suddenly, there was a need for more affordable technical equipment support throughout the industry.

Fortunately, one of Ken's proven skill sets was a thorough working knowledge of how to use the Internet in a variety of ways to support high tech intra-business communications.

 

Accordingly, Ken started a new firm that allowed the tech companies to have their in-house tech equipment serviced via the Internet from an outside central location (Ken's new company office) - a strategy that allowed these companies to terminate their expensive in-house tech personnel thereby saving a fortune and at the same time presenting Ken with a very successful start-up business.

 

Early in their careers superintendents should analyze the above two approaches to starting a business and be on the look out for similar but different opportunities to start their own businesses in due course. Months of hypothesizing are needed before anyone can conclude that they have identified the right opportunity to start a business.

 

Examples Of Golf-Based Businesses Superintendents Have Traditionally Started:

  1. Lawn care companies to service private home and corporate facilities: a highly competitive field but one where better service at better pricing can prevail.
  2. Irrigation System Installation and Consulting companies to service private home and corporate facilities. New customer market here is reasonably available because few property owners understand the nuances of getting irrigation/pumping systems up and keeping them up and running.
  3. Rock Garden Design and Installation companies to service private home and corporate facilities. A real business potential exists here but not necessarily an easy one because home owners and companies like the concept but find it difficult to do because there are so few qualified/reliable companies and these projects are expensive. Best way to approach this new business concept is by becoming a multi-service company that combines design with any and/or all of the other start-up options mentioned here.
  4. Consulting To Regional Golf Course Operations where less experienced superintendents lack the total know how to manage their maintenance programs expertly. There is a definite market here not one necessarily easy to start: because superintendents fear that their employers will see hiring an outside consultant as a sign of weakness; and because approved operating budgets leave little room to pay the unexpected hiring of consultants. A good way around this is to set consulting fees so low that they can't be refused - meaning that while revenues will be low - a vital client list is being assembled that often is enough to get hired again.
  5. A Marketing/Sales company that will sell products/services to golf course operations that are not readily available through traditional company sales reps. Once a unique product/service or two are identified (a challenging but do-able task) the new business should flourish.
  6. A Hybrid Company that would provide all of (or some of) the service lines listed above that would offer efficiencies in staffing and operational costs - which could be either a start-up firm, or an existing company that was purchased, etc.

      Reminder: (i) A due diligence feasibility study is needed before starting any one

      of above listed new businesses; and (ii) A dynamic newly prepared start-up 

      company website, one link of which would present the superintendent's career

      track record, should be developed to effectively sell any new company.

 

Partnership Options:

It is a critical decision whether a superintendent should be a sole principal, or one of two principals/partners within a start-up firm.

 

If a superintendent possesses the skill sets to address all the needs a start-up company will require to succeed (a rare occurrence), being a sole principal should be a consideration. If not, a second partner can serve a useful purpose.

 

Caution: When forming a new company always use a lawyer to ensure a legal set-up for the new business; and when two or more partners will be involved make sure the creating paperwork requires using arbitration to resolve all issues between partners - otherwise court cases will bankrupt everyone.

 

What To Expect When Starting A New Business?

It is a myth to think that operating your own business will be a cake walk because experience consistently shows that workloads can/will average +/- 75 hours per week and profit margins will be relatively thin during the early years of company development. So plan accordingly.

 

The primary benefit of owning and operating your own company is that you are calling the shots and controlling your company's destiny without the customary outside interference/politics routinely associated with the employment world. Starting a new business is a difficult challenge to overcome but one that promises untold rewards.



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