Small Business Owner Characteristics - Essay Example

Bill, It was good to hear from you. Your new business opportunity sounds exciting. There are just a few things to keep in mind. I wouldn’t want you to opt into this business without any information. The first thing I would consider is personal attributes. I mean really examine your self, not just the good, but the bad as well. We both know that you a first class machinist. You have a great relationship with the other employees, and more importantly the customers. These traits could lead to great success for your small business dreams.

However, you do not have any background in business management. The only other downside I see is your lack of personal assets. To overcome your weaknesses, you have several options. There really is not much you can do to raise your personal assets rapidly. If you would have listen to my investment advice years ago, maybe you wouldn’t be in this situation. You can look into a small business loan. There is something you can do about your non-existent business background. The first thing I would do is look up this website, http://www.sba.gov/starting_business/planning/basic.html. It is the United States Small Business Association website.

They offer help in many different ranges, from business planning to small loans. Since your small business is already established, some of their services wouldn’t be helpful. They do have free online courses to help manage a small business. The Small Business Association should be able to help you not only with bookkeeping, but with business planning. Business planning is a must. It not only helps you define your profit and losses, it helps you market and achieve longtime goals. You can go this route, or if you don’t have time, you can hire a part time bookkeeper/manager.

This will decrease from your profits. I believe you told me Hugo does his own books. If he can do his own books, manage and still find time to do machinist work, it should be possible for you to achieve as well. Small businesses fail because of the owner’s vision of his business, not what the business really does. You must go into this venture with your eyes wide open. A business owner has to be able to not only manage his staff critically, but his self as well. For example, if a job is going to put you into debt because of your need for perfection, you have to be able to turn that job down.

You cannot let the machinist in you override your ability to manage this business. Hugo’s decision to take a small down payment and then take a percentage of the profit for the next fifteen years could be wise or very stupid. The Small Business Association website has a section on financing. You should check it out. If you take my advice and use this source, you business could be a great success. If you make the business a success, Hugo’s decision is a wise one. On the other hand, what happens to Hugo’s interest if you run the business into the ground?

What would happen if you and Hugo have a falling out? When you draw up your contract it needs to protect you and Hugo. I would make it where you both have a buy out option. That way if you two have a falling out, either of you can own the business for x amount of dollars. You might want to consider a small business loan. The government has low rates. If you pay Hugo a set amount, it might save a friendship. Don’t make any decisions until you go to the Small Business Association site, http://www.sba.gov/starting_business/planning/basic.html. It will help you make a more informed choice.

Hugo might want to go there as well. He can find out the pros and cons on taking a percentage of the profit or if he wants a set amount. I’ll talk to you in the near future. I only wish you the best in your new venture.