Summary

More than 60% of American adults say they want to own their own business, and more than 5,000,000 new businesses are started every year. Unfortunately, 50-70% of new businesses fail. In this book, two of the world's leading experts on entrepreneurship identify the 8 'killer mistakes' that cause most of these business failures and give entrepreneurs all the knowledge, tools, templates, strategies, and hands-on how-to advice they need to avoid these errors. Unlike other books that focus on topics like writing business plans and finding investors, this book focuses on the crucial operational issues that make the difference between consistent profitability and costly failure. You'll learn how to identify the right opportunities and customers; effectively design your products and services; set the right price; overcome customer inertia; avoid common day-to-day management mistakes; find and keep good employees; and finally, smoothly manage growth. Throughout, the authors draw on real life entrepreneurial experiences, case studies, and leading-edge research. But there's nothing theoretical here: from start to finish, this book delivers fast-paced, 100% practical advice you can begin using right this minute!

Author Biography

Edward D. Hess, JD, LLM, has spent most of his business life advising entrepreneurs and financing their business ventures. He is currently Professor of Business Administration and Batten Executive-in-Residence at the Darden School of Business, University of Virginia. He founded and led the Center for Entrepreneurship and Corporate Growth and the Values-Based Leadership Institute at the Goizueta Business School, Emory University. His books include The Successful Family Business, The Search For Organic Growth, and The Road To Organic Growth. He has personally built three successful service businesses. His website is www.EDHLTD.com.

Charles F. Goetz, MBA, Distinguished Lecturer in Entrepreneurship at Emory’s Goizueta Business School, has built nine successful businesses in six industries. He serves on the boards of several entrepreneurial ventures and not-for-profits. He recently published The Great Entrepreneurial Divide. His specialties are marketing, customer acquisition, and product development.

Acknowledgments	p. xvii
About the Authors	p. xix
Introduction	p. xx
Who Should Buy This Book?	p. xx
Why Is This Book Important?	p. xx
What Topics Are Covered?	p. xx
Why Are We Qualified to Write This Book?	p. xxi
How to Use This Book	p. xxii
Can You Be a Successful Entrepreneur?	p. 1
What Do Successful Entrepreneurs Do?	p. 2
Who Are Successful Entrepreneurs?	p. 3
Key Definitions	p. 5
Two Common Paths to Entrepreneurial Success	p. 5
Lessons Learned	p. 6
Basic Rules of Business Success	p. 9
The 8 Common Start-Up Mistakes	p. 10
Choosing a Bad Business Opportunity	p. 10
Choosing the Wrong Customers	p. 12
The Wrong Product	p. 12
Pricing Products or Services Improperly	p. 13
Not Selling to Enough Customers Fast Enough	p. 14
Not Executing Well	p. 15
People Problems	p. 16
Mismanaging Growth	p. 17
Basic Rules of Business Success	p. 18
Lessons Learned	p. 19
What Is a Good Business Opportunity?	p. 21
Pencil It	p. 23
The Best Sandwich Shop	p. 24
What Is the Average Price You Can Sell Your Sandwiches For?	p. 25
Competitors	p. 26
Back to the Math	p. 28
Children's Clothing Shop	p. 30
Customer Conversion Ratio	p. 31
Customer Conversion Rates	p. 32
Two Different Types of Businesses	p. 32
Estimating Your Costs	p. 35
What Does Net Profit Margin Tell You About Costs?	p. 36
Why Do You Need to Know Your Costs?	p. 37
7 Ws	p. 38
Lessons Learned	p. 38
How Do You Choose the Right Customers?	p. 41
The Right Customers	p. 42
Who Is a Prospect?	p. 42
Example Survey Questions	p. 47
The Competition	p. 52
Lessons Learned	p. 58
How Do You Design Your Product or Service?	p. 59
Give Customers Only What They Truly Need	p. 60
Features or Benefits	p. 60
What Is Value?	p. 61
Example: Enhancing Your Product/Service Value	p. 62
Your "Reason for Being"	p. 66
Low Innovation	p. 68
It's Now Time to Build Your Product/Service	p. 69
Can You Build or Produce It?	p. 70
The Prototype-The Test	p. 70
What Is a Prototype and How Does It Work?	p. 71
Other Tips	p. 71
3 Ws	p. 74
Lessons Learned	p. 74
What Is the Right Price for Your Product or Service?	p. 77
Competitive Pricing	p. 80
Break-even Formula	p. 81
Number of Products Required to Be Sold to Break Even	p. 82
Additional Pricing Factors	p. 82
Lessons Learned	p. 84
How Can You Overcome Customer Inertia?	p. 87
Obstacles to a Sale	p. 88
The Risks of Buying from You	p. 89
Making Sales Takes Practice	p. 92
The Psychology of Sales	p. 92
The Customer Buying Timeline	p. 92
Time Is Your Enemy-Your Money Is Burning	p. 93
Selling Is Like Fishing	p. 93
Customer Referral Programs and Customer Loyalty Programs	p. 94
Start with a Customer	p. 94
Lessons Learned	p. 95
How to Manage Your Business	p. 97
Start-Up Overload	p. 98
Your Value Chain	p. 99
Your Supply Chain	p. 100
Your Manufacturing (Assembling) Chain	p. 101
Why Do You Flow Chart Your Business?	p. 102
Management by Objectives	p. 103
Management by Exceptions	p. 106
The Power of Simplicity	p. 108
Rule of 3s	p. 109
Rule of 7s	p. 110
Measurements and Rewards	p. 110
Stay on the Front Lines	p. 114
Iteration	p. 114
Make Work Fun	p. 115
Lessons Learned	p. 116
How Do You Find and Keep Good Employees?	p. 119
This People Stuff Is Hard	p. 120
What Do Employees Want?	p. 121
Why Is High Employee Turnover Bad?	p. 121
Hire for Fit	p. 121
Hiring Tools	p. 122
Probationary Hiring	p. 123
Buy-In	p. 123
The Rules of the Game	p. 124
Best Practices of Managing Employees	p. 124
Promote from Within	p. 125
The Meaning of Work	p. 126
Mental Rehearsal	p. 127
Mental Replay	p. 127
Lessons Learned	p. 128
How Do You Manage Growth?	p. 131
Growth Can Be Good or Bad	p. 132
The Two Absolutes	p. 134
Process	p. 135
Financing Growth	p. 136
Financial Controls	p. 137
Managing the Unexpected	p. 137
People	p. 138
Small Business Services	p. 139
Check-Off	p. 140
Legal	p. 140
Legal Structure	p. 140
Small Business Networks	p. 141
Upgrading People	p. 142
Customer Diversification	p. 142
Growth Changes Your Job	p. 142
Lessons Learned	p. 145
Conclusion	p. 147
Business Rules	p. 148
Lessons Learned	p. 160
Bibliography and Resources	p. 169
Books	p. 169
"Building a Company" Books	p. 169
Business Strategy Books	p. 172
Entrepreneurship Books	p. 173
Family Business Books	p. 174
Finance, Accounting, and Measurement Books	p. 175
Leadership Books	p. 176
Books on Lessons to Learn from Bad Leadership	p. 178
Management Books	p. 178
Marketing and Sales Books	p. 180
Articles	p. 181
Information Portals	p. 183
Author's Commentaries	p. 184
Index	p. 187
Table of Contents provided by Ingram. All Rights Reserved.

Supplemental Materials

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Excerpts

Praise for So, You Want to Start a Business Praise for So, You Want to Start a Business?"I used So, You Want To Start a Business? to restructure my furniture hardware company. The book was full of applicable information that I have used and will continue to incorporate into my company. I couldn't ask for a better resource." --Adam Prestwood, Vice President, Pampco, Inc."Practical, sensible advice to anyone starting a business. A great short course in entrepreneurship." --Billy D. Prim, Chairman and CEO, Primo Water Corporation, Winston-Salem, NC"This is exactly the kind of book first time entrepreneurs always needed but was never available. Everyone who is thinking about becoming an entrepreneur must read this book." --Dr. E.W. Leonard, Associate Dean, Executive MBA Program, Goizueta Business School, Emory University"Here is the straight story about being a successful entrepreneur from people who have been one and taught many. Clear, practical, and concise, this book delivers the goods." --Andy Fleming, Principal, Core Growth Partners, Atlanta, GA"Solid advice for building and growing a sustainable business." --Andrew Bourne, CEO, WayPoint Technologies, Phoenix, AZ"Professor Hess's book has helped me improve my services and make clients feel appreciated, respected, and most of all, like they're getting a great service at a fair price." --Sammy Starnes, Owner, Hair Concepts, Inc."A treasure trove of information! I just started my company, and I have to say that this book helped me make the right decisions from the very beginning." --Derica Justice, Owner, Bon Bini Print & Design"This is a great practical guide with lessons and insights for anyone who wants to start a business. You will go back to it again and again." --Ned Morgens, CEO, SarahCare.com, Atlanta, GA"Whether you are a striving young entrepreneur or a middle-aged person with the courage to trust your wits, this book is indispensable." --Ben Dyer, General Partner, Cordova Ventures, Atlanta, GA"A must read for entrepreneurs who want to know what it really takes to launch a successful small business." --Jay Myers, CEO, Interactive Solutions, Inc., Memphis, TN"A precise, pragmatic, wisdom-dripping, rich read. The authors walk the talk." --Jim Christian, CEO, Kandumedia.com, Denver, CO"A powerful book full of good how-to advice." --Philippe Sommer, Director of Entrepreneurship Programs, Batten Institute, Darden School of Business, Charlottesville, VA"This book is a great primer and an excellent reference book for an entrepreneur." --Walter Negley, CEO, TSP, Houston, TX Copyright Pearson Education. All rights reserved.