Cost of Living: Starting a business appealing for more Hoosiers
In our Cost of Living series all this week, Call 6 Investigates Kara Kenney is digging into expenses you stress about on a regular basis.
INDIANAPOLIS -- Hundreds of Hoosiers are starting their own businesses, and if you’ve ever day dreamed about launching your own start up, you are not alone.
The Indiana Small Business Development Center helped launch 248 new businesses in 2016 and create 949 new jobs at small businesses.
Call 6 Investigates looked at what it really takes to start your own venture in Indiana, and the common mistakes many people make.
Justin Goheen started his own Indianapolis company, Tradecycle Capital LLC, as a way to get more fulfillment out of his work.
“I felt like I wanted to build something for myself, not just other people’s businesses,” said Goheen.
Experts say it’s hard to say how much money you need to start your own business, because it greatly depends on what type of enterprise you want to launch.
Goheen and his business partner had to raise a significant amount of money to start the business.
“For a finance company, my raw material is money,” said Goheen.
Goheen used his own money, his partner’s funds and they borrowed money to fund Tradecycle Capital LLC.
“I’m very happy with the way things are going,” said Goheen. “You need a lot of capital to run a finance company. The biggest thing for us was investigating in the technology and the software.”
Running a start-up and being your own boss has its downsides.
Goheen works alone in an office along Fall Creek Road.
“I’m a one man show right now in a pretty small office, and you will some of that camaraderie of having co-workers,” said Goheen. “I literally wear every hat right now. There’s no vacation right now.”
Records show Indiana has nearly 500,000 small businesses in operation, employing 1.2 million Hoosiers which is 45 percent of the state’s private sector workforce.
First Internet Bank CEO David Becker has started over a dozen businesses and said first and foremost you need a good idea.
“You need to find a problem, and come up with a solution,” said Becker.
Then, test your idea, gather feedback and see if the idea will really work.
"The ideal situation is keep your day job and start the business on the side," said Becker.
Fund your idea with your own money for as long as you can, said Becker, and then look for outside funding.
"There's the rules of three. It's always going to take three times longer and it's going to cost three times as much as you think in the beginning," said Becker.
Avoid land mines up front.
"You need a good attorney, you need a good accountant, and you need a good banker," said Becker.
Call 6 Investigates stopped by a Venture Club of Indiana event where entrepreneurs and investors rubbed shoulders on a Wednesday night.
" The Venture Club of Indiana supports local entrepreneurs, connecting them with resources, specifically seed money and venture capital," said board member Kara Kavensky.
Kavensky started her own consulting business and owns her own Pilates studio.
"Now is exactly the perfect time to start a business," said Kavensky.
Successful entrepreneurs told Call 6 Investigates you should expect doors to be slammed in your face, but listen to why someone is telling you no.
“What do I have to change with my idea, what do I have to change with my concept,” said Goheen.
Goheen said with a wife and three kids it was scary to go off on his own, but he has only one regret.
"My only regret is I didn't do this 5 years ago," said Goheen.
Experts said you need to find out what your liability and tax issues might be when setting up a company.
Entrepreneur.com offers the following 50 tips for starting your own business:
1. Do a self-inventory
Not everyone has what it takes to start a company. That’s not to say that your idea is not brilliant, but are you ready for all the chores that come with it, like cold calling prospects and invoicing them until you're paid when you start getting clients? It just means that you may not have the personality traits to handle launching a company of your own.
Before investing any time or resources, evaluate yourself and see if you have some the typical traits of an entrepreneur. Are you motivated, able to adapt and confident? Are you resilient?
2. Develop an idea
Don’t just start a business because something is in vogue and you think commercializing it will make money. Develop a business concept that you're passionate about related to something that you have experience with. From there, come up with a product or service that you believe can enhance the people’s lives.
3. Test the plausibility
Once you’ve settled on an idea, figure out how you can make it become a reality. Is the product or service something that people want or need? Can you make a profit selling it? Does the product work?
4. Write a business plan
A solid business plan will guide you going forward, even if your plan is to be just a solopreneur or freelancer. It’s also needed for presenting your idea to potential investors. Your business plan should include a mission statement, a company summary, an executive summary, a service or product offerings, a description of a target market, financial projections and the cost of the operation.
5. Identify your market
Even though you may have detected some interest in your business, you need to do more homework. Assess the market, targeting the customers most likely to make a purchase. Perform a competitive assessment.
6. Determine the costs
Do additional research and find out the standard cost factors within this industry. Not only will this help you manage your business more effectively, investors will want to know this.
7. Establish a budget
Once you determine how much money you’ll have to work with, figure out how much it will take to develop your product or service and create a marketing plan.
8. Find the right investors
You’re going to need some sort of funding to start off, whether from your savings, credit cards, loans, grants or venture capitalists. Find an investor who shares your passion, someone you believe...