Business RX: Advice on improving or starting a business

Sep 19, 2012

Elana Fine, managing director of the Dingman Center for Entrepreneurship at the University of Maryland's Robert H. Smith School of Business, will take your questions.

Hello Elana, How important is it to write a business plan? If I am not looking for a loan or investment money, do I really need one?

We've actually been encouraging entrepreneurs to use planing tools such as the Business Planning canvas or other simpler tools before writing an entire business plan.  This type of tool really helps you identify your value proposition, target customers, key partners, etc. before spending the time to write a full plan.  This is where you determine the feasibility of an idea and how you will start.  A longer business plan may come later and some companies use much more as an internal execution plan vs. a tool to raise $. 

I am noticing two trends lately: some businesses are closing their brick and mortar operations and moving online, and some online only businesses are opening brick and mortar stores (e.g. Buy Buy Baby). What would you recommend for a boutique stationary/paper goods store? Online only, brick and mortar, or both?

A lot of companies are moving away from brick & mortar because they see the success of on-line companie like Amazon that can compete significantly on price with less overheard.  If your business requires a lot of customer service and will rely on walk in traffic, you still might need a physical location.  For a stationary or paper goods store I think it really depends how you will differentiate from the competition - if it is on price and variety - you may be able to build a business online but if you are providing guidance/advice on invitations or other customized goods you might better serve your customers either from a home office or a brick & mortar store.  

Any specific advice for women looking to start a business? I have three young kids and am afraid I can not do both. As a succesful working woman, do you have any insight on how I could prepare myself if I were to start a business?

I think women make great entrepreneurs because they are used to multi-tasking and are typically very solution oriented.  I actually have spoken to a lot of women entrepreneurs that found starting their own business more flexible that working for someone else because they can set their own hours (even though those hours might be every waking moment when your kids are at school or asleep).  I know a lot of women who have initially started their businesses in their home so they can still be close to their kids.  Identify a few successful local entrepreneurs that you can buy coffee and pick their brain about how they started and balanced their various obligations.  I'd also say build a great support system of friends and family who can help pitch in while you get things started. 

What do you think is the most promising industry to start a business in today? Is it still high tech, e.g. apps, games, social networks, or do you think this area is becoming too saturated and there are underserved and more lucrative industries with better opportunities?

That is very hard to say -- technology will always be a promising industry b/c of the rapid pace of change.  Technological advances and changes always create additional new opportunities.  I'd say there are sectors within technology that are a bit oversaturated -- like the ones you named - but others particularly focused on the enterprise (security, data, education, mobility) vs. consumer that still represent a significant amount of opportunity.  I'd also say that you shouldn't pick an industry just because it seems hot or lucrative- you need to find pain points and unique idea/product/service /business models to address those pain points.  

My husband has a great idea to start a business and nearly all of the equipment to get it going today. But he currently has a lucrative full-time job. I also work full time, but he makes much more. He'd like to transition into his new business, but is having a hard time finding time to work on it given the demands of his current job. Should he just quit and go for it? Note: he has run a successful business before so knows the ins and outs of getting something up and running. We'd be pinched for money as he gets it started, but it's doable.

That's a very personal decision. I'd think about looking for a way to have some initial proof points that the business has some legs.  I'm sure some people would say, just go for it and you only live once and you should follow your passion.  I'd suggest that your husband look to prove the business concept in some small way -- line up initial customers, provide services over the weekend, anything in the evenings - to get any validation before taking the plunge.  

I'm considering retiring from my current career and working from home on a second one as a consultant. Is it better to incorporate? Thanks.

If you are going to be charging clients you should set up a LLC or another legal business entity so that you and your clients can easily keep records, pay taxes, etc.  

I'd recommend that you learn the difference between "stationary" and "stationery" pronto!

Typing too quickly - maybe one of the entrepreneurs on line can develop technology to help spell check detect the difference.  

How do you suggest cutting through the clutter of the digital ad world to promote my business? My sales are down and looking for ways to improve.

Social media and digital advertising can often be inexpensive ways to attracts users and customers -- but you need to think it through strategically vs. just spray and pray.  You need to really identify your target demographic and where you will find them online.  Building a social presence can take time.  Experiment with social media and adverstise on sites in small, tests and then see what is most effective in attracting new customers.  Also think about what else may be impacting sales -- is the product still in demand, are there more competitors in the market, what other factors are impacting your business? The issue might be in your advertising/promotion or may lie in something else. 

Do you have any recommendations for software or any other tools, apps, or gadgets that could help entrepreneurs brainstorm or think through business models, financials etc.? Seems in this day and age there should be more than the old business plan and excel spreadsheet. Thanks!

There are a number of online tools -- I'm a big fan of the book The Business Model Generation which includes an interactive business planning canvas (actually a great iPad app).  There are other tools and methodologies like Lean Launchpad that help guide through the venture creation process.  Best thing to do is also bounce your ideas off as many people/potential customers you can to get feedback on whether they'd buy your product. 

For the past two years since I was laid off, I have been doing freelance writing (nonfiction articles, pretty specialized stuff). With the rise of content mills and the "all information should be free" expectation, I'm pessimistic about my long-term ability to support myself. How do I go about trying to figure out what else I can do to make money? Should I try to reboot myself as a corporate good-grammar coach, or try something else entirely?

Writing has become commoditized -- however the use of the web now requires organization to create a lot of content and put a lot more information on line.  There may be opportunities to help organizations with their web sites or taking internal information and repackaging in a  more digestable on line format.  You are smart to be thinking ahead and identifying thechanges in the market -- really inventory your skills and see where there might be an opportunity to refocus. 

In This Chat
Elana Fine
Elana Fine was appointed Managing Director of the Dingman Center in July 2012, after joining the team in 2010 as Director of Venture Investments. As Managing Director, Elana's primary focus is leading the Dingman Center in support of its mission and strategic plan. Key responsibilities include oversight of our student venture incubator, Dingman Center Angels investor network, business competitions, and technology commercialization efforts. Elana earned an MBA in Finance and Accounting from the University of Chicago's Booth School of Business in 2002, and earned a BS in Finance, from the University of Maryland, College Park, in 1997.
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