According to Statistics Canada, about fifty percent of new businesses close within the first four years of their existence (Jarman 17).
In order to prevent the beginning entrepreneurs from immediate failure in the world of business, several guidelines are provided by experienced and successful businesspeople. Initially, it is significant to establish a client base even before one quits one’s old job and sets up a business. A good client base includes sufficient quality and quantity of customers may take several years to build.
That is why it is advisable to start working on a client base in advance and to use a number of possible client sources, such as: one’s previous job contacts, community and business clubs, and various professional associations (Jarman 17-18). References from one’s previous job may be of great help when establishing a client base, since they add credibility to the business owner.
Another way of creating a credible image of a new business is possessing multiple designations. For one hand, this imparts an air of expertise to one’s business card. For another thing, it allows to succeed professionally in several overlapping areas, which increases one’s competitiveness.
In any case, it is advisable to take time and enter a mature age before starting an own enterprise. The reason for this is that once a person is older, financial obligations are settled and more money is available for the needs of the new business (Jarman 18). In addition, mature age can boast more references and contacts, as well as results in higher credibility. Last but not least, mature people do not have to care for dependant children and therefore have more time and energy for setting up a business.
Family support is a vital factor for the success of a new business. Once a business is started, the family should realize that the business-owner cannot maintain an ideal work-life balance and therefore he or she should obtain more help with the domestic tasks. Care should be taken when entering into a partnership with a family member, since it may lead to a collapse of both the relation and the business.
As for gender stereotypes, Jarman claims that being a male or a female does not matter for the success of a business (19). The last guideline for beginning entrepreneurs is not to ignore the opportunities of a franchise, since despite the necessity of paying fees and royalties, a new business can benefit from the training, marketing, and referential help obtained within a franchise (Jarman 19).
The article under discussion is most closely connected to concepts and ideas presented in Chapter 3, “The Challenges of Starting a Business” (Collins 49–70). The subject highlighted in the article is the way beginning entrepreneurs can increase their chances for success. Jarman provides simple yet efficient advice based on the experience of self-employed professionals who have prospered in their business initiatives.
The author of the textbook emphasizes the idea that small business ownership can be very rewarding: it provides the business owner with such benefits as independence, financial rewards, lifestyle advantages, learning opportunities, as well as creates freedom and personal satisfaction (Collins 55).
The article echoes this idea in a similar way, stressing the especial value of personal satisfaction voiced by successful entrepreneurs (Jarman 19). In spite of the existing financial risks and the necessity to bring one’s lifestyle in accordance with the new business requirements, the independence and the personal freedom obtained by self-employed businesspeople provide sufficient compensation for the possible inconveniencies.
Both Collins and Jarman discuss the factors that should be taken into account before starting a new business. Among the possible options, starting from scratch is described by both authors as risky, since the beginning entrepreneur does not possess the necessary background and reputation among customers (Collins 58; Jarman 18). Building a loyal customer base is named as one of the key priorities for a beginning businessperson.
Franchise is seen as an attractive business opportunity by the authors of both the textbook and the article. Among the advantages of franchise as an ownership option, both Collins and Jarman name the expertise of franchisor head office that can provide guidance on many aspects of starting and developing a business (Collins 58; Jarman 19).
The disadvantages of franchise, agreed upon by both authors, are the necessity to follow the general company rules even if they do not seem attractive to the business owner, and to pay rather high fees for participation in a franchise.
Entrepreneur is defined as “an individual who identifies a business opportunity and assumes the risks of creating and running a business to take advantage of it” (Collins 51). The article is addressed to beginning entrepreneurs who need guidance with starting their business.
Small and Medium-Sized Enterprise (SME) is defined as “a business that is independently operated and employs fewer than 500 people” (Collins 51). The article addressed the issues of starting a small enterprise.
Business is defined as “an activity that provides goods or services to consumers for the purpose of making a profit” (Collins 3). The article focuses on the principles of starting a new business .
Franchise is defined as “a form of business in which a franchisor (a seller) grants a franchisee (a buyer) the right to use a brand name and to sell its products or services” (Collins 59). In the article, franchise is discussed as one of the attractive opportunities for beginning businesspeople since it provides a lot of highly professional guidance on starting and running a business.
Marketing is described as “everything that a company does to identify customers’ needs and design products to meet those needs” (Collins 4). In the article, marketing is mentioned among the areas where starting entrepreneurs need guidance in.
Self-employed is defined as “not working for an employer but finding work for yourself or having your own business” (Cambridge Advanced Learner’s Dictionary). The article provides advice on self-employed people.
The article has confirmed many of the key principles of starting a business that are laid out in the textbook. The lively and down-to-earth style used by the author of the article, together with a scientific approach to research, sounds the more convincing and produces a deep impact on me as a reader.
Examples of successful or unsuccessful decisions for starting a business provided by the author serve as convincing proofs to support her guidelines. The article has summarized and extended my knowledge about the possible pitfalls faced by beginning entrepreneurs and about the ways to avoid those pitfalls.
In terms of future, the information learnt form the article can serve as a guiding material for me in case I want to start an own business. Knowing the necessary background for small entrepreneurship, I can access the risks better and therefore can prepare myself for a business career much more efficiently.
Cambridge Advanced Learner’s Dictionary. Cambridge Dictionaries Online, 2010. Web. 18 Oct. 2010.
Collins, Karen M. Exploring Business. Toronto, Ontario: Pearson Education Canada, 2010. Print.
Jarman, Samantha. “Thinking of starting your own business? Six tactics for increasing your chances of success.” CMA Management 83.9 (2010): 16-19. Business Source Premier. EBSCO. Web. 18 Oct. 2010.