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You may know Lillian Katz better by the name Lillian Vernon. She is the founder of the $258 million direct-marketing company Lillian Vernon Corporation. Below are 10 questions Vernon thinks you should ask yourself before you attempt to start your own business.
1. Do you have the necessary commitment?
To succeed, you must feel passionate about the work you have chosen. Lukewarm enthusiasm will not sustain you through the challenges you will face in a start-up business.
2. Are you prepared to work extremely hard?
Launching your own business demands long hours of labor. Are you sure you want to give up a good part of your social life: your weekends, golf games and vacations? For your developing business to succeed, you will need to focus all your energies on it.
Learn to recognize potential problems before they threaten the survival of your business.
During the bleak days of the Depression, an aggressive politician from New York named Franklin Roosevelt made a bold promise that his administration would put “two chickens in every pot and a car in every garage.” As it turned out, this was one of the few times in history when a political exaggeration was actually an economic understatement.
Today, poultry is so inexpensive that it is the most common meat used in pet food. And the automobile has become such a fixture in the American home that owning just one is a handicap rather than a privilege. In fact, we have such an innate understanding of the internal combustion engine that most of us have a rough idea of how it works and why it sometimes doesn’t.
One of the more significant challenges of owning a business is having enough cash to pay the bills. Your ability to pay your bills on time, to a large effect, is based on how successful you are in collecting your accounts receivable in a timely manner.
What is the biggest worry that keeps small business owners awake at night? More than likely, it’s the fear of having little or no cash flow to pay bills and make payroll. After all, if there isn’t anything in the bank, it is nearly impossible to keep the business operating.
Most of the smaller business owners I know, tend to look at their check books and see if they money in there. If they do, it is a good thing and if they don’t it creates a lot of stress. As the business grows using this simplistic system will get the business owner in trouble and depending on the seasonality of the business and the rate of growth, it can create a very big problem.
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When I was growing up on a farm and operating equipment, it was important to grease each of the moving parts on the equipment each day. That kept the equipment operating properly throughout the day.
The same fact is relevant today in business building. There has to be adequate lubricant in the business machine to keep it operating smoothly; the lubricant in every business is CASH; cash to keep the vendors, lenders, employees, etc. operating smoothly.
Business with $100k in the bank will have a much easier time building their business than those that are always cash tight (line of credit maxed out and creditors banging on their doors). Want to achieve that $100k in the bank? Develop a plan that will grant you that goal in 6 to 12 months, most businesses can attain it in a relatively short period of time with a plan that focused on profit and cash flow.
