Lift-Off! How to Launch a New Business
One of the great things about the information technology field is its capitalist spirit: No other industry has produced so many new businesses, ideas and products in such a short amount of time. The entrepreneurial ethos in IT is such that Bill Gates dropped out of Harvard University (Harvard, people!) to launch some company called “Micro-Soft.” Apparently, Mr. Gates felt that developing software was more worthwhile than getting a degree from the best school in the world. (I guess time will tell if he made the right decision or not.)
If you have a new and earth-shattering concept (or concepts), a strong work ethic, an inclination for innovation and a riverboat gambler’s penchant for risk-taking, you might want to consider starting your own IT business. I won’t lie to you: Starting a business isn’t as hard as you might think—it’s harder. You might be trading your 40- to 50-hour workweek for a 24×7 profession. For those truly creative, intrepid and industrious individuals, here are some suggestions on how you can make your ideas work for you, instead of working to make ideas for your employer.
Evaluate, Evaluate, Evaluate
One of the first things great entrepreneurs do is research the market for “holes.” They ask questions like, “What do consumers want that businesses aren’t delivering?” or “What is this particular product missing, and what should I add to it?” To be successful, your company has to bring something exceptional to customers. However, you don’t necessarily have to reinvent the wheel, figuratively speaking—just make it bigger, longer-lasting, cheaper or perhaps all of these. Remember: It’s all about demand.
Another factor to consider is you. You should carefully examine your own strengths and weaknesses: Do you have the technical expertise to launch and support a new product or service, or will you need to hire employees to work with you on your venture? Pure IT aptitude is only the tip of the iceberg, though. To make it in the aggressive and high-stakes world of business, you’ll need to have soft skills like management and leadership, sales and marketing acumen, and knowledge of accounting and budgeting, or you’ll have to take on personnel with those skills.
Get It Off the Ground
Capital is the key ingredient in all of this: You have to determine what expenses are absolutely essential to starting your business. (Business Know-How has a good startup calculator at www.businessknowhow.net/bkh/startup.htm.) Once you’ve established what the outlay will be, you should secure the necessary funds either by drawing from your own assets or borrowing. Possible loan sources include friends and family (proceed with caution), banks and credit unions, angel investors and venture capital firms, and the Small Business Administration. When writing a loan proposal, be sure to include some general information about the company, a management profile, and specific market and financial details. Leaving any of these aspects out labels you and your company as a dicey gamble. (For more on this, see www.sba.gov/starting_business/startup/guide.html.)
One of the most crucial steps is devising a business plan, which will have many of the same components as your loan proposal, and then some. An element of this codified strategy involves establishing what kind of business you’ll be running: sole proprietorship, partnership or corporation. Each has its advantages. For example, a sole proprietorship is relatively simple and inexpensive to start and affords the initiator full control over the business, whereas a corporation places limits on the owners’ financial and legal liability and presents them with the opportunity to raise funds by selling shares of stock. (To explore business plans in greater detail, visit www.business.gov/phases/launching/write_business_plan/index.html.)
Protect Your Idea
Finally, to ensure you—and not your competitors—profit from and govern your ideas, you should seek to patent them. Keith Vogt, an attorney with Chicago-based law firm Stadheim & Grear, recommended meeting with a lawyer for intellectual property counsel within 12 months of coming up with your concept, as all new ideas are given a one-year grace period for patenting before they become a part of the public domain. “The general rule is, if you have the money, seek to protect it as soon as possible,” he said. “If you patent your idea, you maintain control over how you distribute it.”
Vogt urged IT entrepreneurs to keep close track of and record the inventive process—as well as emphasize the novelty and distinctiveness of the concept—in order to prevent patents from being lost to unnecessary delays. Additionally, make sure to get nondisclosure agreements from all of your employees to protect proprietary information.
Brian Summerfield is Web editor for Certification Magazine. Send him your favorite study tips and tech tricks at email@example.com.