According to a study by the U.S. Small Business Association, only 2/3 of all small business start-ups survive the first two years and less than half make it to four years.  As the founder and CEO of a company that has just enjoyed its 20th anniversary, I would like to share some tips to people out there thinking of starting their own business and hope other small business owners will add some of their thoughts.

1. Never open a business you are not passionate about and are an expert in – one of my recent tenants who bought a mildly successful auto tinting business is a classic example of what not to do. This man had some money to invest and he decided to buy his own business and went to a broker who showed him the types of businesses he could afford to buy and he choose the auto tinting one.  He ignored the fact that he didn’t know a thing about auto tinting and had never owned his own business before. He ran through the investment money and closed his doors within 6 months.

2. Don’t think being your own boss is easier than having a boss – Be prepared to work harder than you ever have before in your life if you want to make it.  For years, I worked 6-7 days a week because I was (and still am) so passionate about what I do. You have to be twice as smart and three times as dedicated as you were when you were an employee because there is no one above you to check your work. Attention to detail is so important, you need to double and triple check everything that leaves your office so that you make the right impression early on.

3. Be careful about overhead (literally)- do you really need office  or retail space to operate your business? The #1 reason my business was so successful from the start was that I didn’t have to invest a dime to start it and I ran it out of my house (still do even though I own an office/warehouse now).  Obviously some businesses need to have a location but not all do and if you can start a business that doesn’t require large overhead you are more likely to succeed. For example, perhaps start selling your goods on line before opening a mortar and brick store.

4. Start small – if you can keep your day job and begin the business part time, you will have a better chance of seeing if this is the life for you and being successful. I started mine working at night and on weekends.

5. Hire when necessary and not before – hiring good people is probably the hardest part of owning/managing a business. I spent a lot of time reading articles and books on how to interview, what questions to ask and what to look for to find a good employee and you know what? That only worked 1/3 of the time! There is no magic formula on getting good people so be careful and hire only when you absolutely need help. Again, if you are starting your own business to have more personal time, think again. And before you hire anyone, create a very detailed job description for that person. Don’t even place an ad before you have this job description in writing ready to share with the people you interview.

6. Hire the person who meets the job description AND will mesh well with your company – OK, I did learn a bit after all that research and 15 years of hiring (yes, only 15 years because the first 5 I did everything myself). The #1 mistake I made (and I know others do as well) is to compare candidates to each other — their education, their past job history, etc — but instead you should be comparing them to the job description. Ask the candidates about EACH job description and what experience they have doing each one or how they would tackle it.  The #2 mistake I made was to hire people that had great resumes but just didn’t “fit in” with our group. The way to make sure they do is to have your other employees interview them as well. Another thing we do is to have all potential employees take a personality test. This helps us determine if we have a good mix of personalities to get the job done. We also find that certain personality types do certain jobs better. If you have never done one of these tests – try www.keirsey.com/aboutkts2.aspx  or www.humanmetrics.com. You want people to be on YOUR team and all work well together. This doesn’t mean all personalities are the same (in fact that is worse) but that they all play well together.

7. Analyze your productivity and always look for ways to improve on it. We were in such a growth mode for two years that my employees joked they didn’t take a shower for days but worked straight through (luckily they all work out of their home offices). Things were being over looked and we knew we needed to hire someone but before we did, we asked each employee to list what they LOVED about their jobs and what they HATED. We then made a job description with the things they hated and we found the perfect person who loved those exact things.

8. Let your employees share in the profits – employees that share in the profits are vested and work harder than those who are just hourly employees.

9. Learn to delegate – this was the hardest thing for me to do but once I did, my life changed! I now am great at delegating and because I have such an exceptional staff and made sure they were properly trained, I know that the things I delegate will get done correctly.

10. Have meetings regularly but not too much – many large companies move so slowly because of all the meetings their employees have to attend. But make sure you are having meetings — live ones if you can at least once every other month. Make sure you have an agenda and you lead the meeting and leave some time for brainstorming on ANY problem you have. You would be surprised how many times one of my employees came up with a suggestion that worked and was way out of their job description. Looking at things with different eyes opens up a whole new pot of “what ifs”.

11. Time IS money (especially when you are paying the salary) – Email instead of phoning, conference call instead of live meetings – you get the drift. Obviously, you need to do what your clients like best but most are as busy as you are so try the email approach and conference call approach and see how much time you can save to spend on solving their problems for them!

12. The customer is not always right– OK, they are always right at a restaurant or a retail shop but when you are in the marketing/consulting business of any type; you are the expert and your job is to make sure the client gets the best at the best price. This sometimes means not agreeing with them. And if they hired you in the first place, they should understand you are there to help them.

13. Know what your competition is up to – Know who their clients are, what their rates are, etc. Never bash the competition but make sure you know what they are doing. There is nothing worse than a business owner who doesn’t know there is someone doing the same thing they do at a better price or in a better way. Don’t let your client be the one to tell you!

14. Get a mentor if possible – before you even start your business, try to find a person who can mentor you. If you can’t find a personal contact, look to your local university and see if they have small business start up classes or check out SCORE – a website that helps entrepreneurs get FREE & CONFIDENTIAL business advice from SCORE – a group of retired business people who are willing to consult – www.score.org/index.html.

To everyone out there thinking about starting their own business,  I hope some of these tips are helpful. For  more information on my company, check out our website at www.cosproagency.com.