January Financial Fitness Challenge—Think 'Future' When Starting a Business

by Susan Tiffany, CCUFC

Humble beginnings can lead to big accomplishments. The BBC reported that Warren Buffett, today a billionaire, filed his first income tax return at the age of 13, "deducting his bicycle and watch as a work expense for $35 for his work as newspaper delivery boy." Clearly, between a dream and achievement a lot of work needs to get done.

If you're on the brink of a new-business decision, you have abundant resources before you. Starting a business in these times, in any time, needs to be a calculated risk and not a casual effort. "Some are more calculated than others," cautions Joan Gillman, director of special industry programs with the Wisconsin School of Business for the University of Wisconsin-Madison. "Do some future-think," she advises.

That is, look at what will be different in two years compared with two years ago. "Look at how your cohort has changed," she says, pointing out that baby boomers have lost a sizable amount of their investments in the market. How will buying behavior change as a result? What trends are going to emerge? What do people buy, face to face or online? The same questions apply to business-to-business and business-to-consumer ventures.

Entrepreneurial opportunity

"Anything with 'environment' in it is probably a good thing," Gillman surmises. And she suggests looking at franchises or direct selling. "These can be viable ideas with little investment." Or, if you have skill or a trade—plumber, mechanic, for example—this can be a great time to launch a business. Gillman, the author of "Business Plans That Work," points out that people keeping their cars longer need good mechanics to keep them running.

Deciding to start a business is a time for rigorous honesty. "Look at your strengths and weaknesses, on paper with two columns," Gillman says. And if you're contemplating partnership, make the same assessment with your partner. For example, look for complementary strengths and weaknesses—you won't have balance if you're both strong in the same categories.

People keeping their cars longer need good mechanics to keep them running.

Turning Point—Starting a Business

For a deeper look at the idea of starting a small business, check out the first module in our new Turning Points series, Make the Move to Small-Business Ownership, by Darla Dernovsek.

If you're a small-business owner, or thinking of becoming one, ask the people at your credit union for guidance. Providing small-business financing and services is just one more way that credit unions step up to help members, in good times and bad.

ST
Susan Tiffany, CCUFC
askem@cuna.coop

Related Home & Family Finance Resource Center items

Turning Points become Financial Fitness Challenges for 2009

Starting a business. Your wedding. The first house, and the birth of a baby. Losing a job. The death of a spouse. These events are significant turning points in a life. Some turning points you happily anticipate, others catch you off guard and unprepared.

No matter which kind, a turning point requires your full attention if you're to navigate it successfully. That means identifying the key questions you need to answer before moving ahead, and lining up the resources that can best help—including the credit union. In 2009, Home & Family Finance Resource Center will focus on a series of major turning points, while continuing its three-year Financial Fitness Challenge.

You and a business partner need complementary strengths and weaknesses.

Each month, we'll examine a pivotal life event, in more depth than in a typical feature article. We'll use a frequently asked question (FAQ) format and a substantial list of potential resources. The goal is to help credit union members think ahead—another example of future-think as described above— to how they'd manage a turning point, and have the information available in the archive should they need it later.

As each Turning Point constitutes a Financial Fitness Challenge, the series will help you prepare to manage these kinds of experiences. We'll also highlight each monthly Challenge and Turning Point on Home & Family Finance Radio, which airs Sundays at 3 p.m. Eastern time on the Radio America network.

And, you can register to win one of five monthly $50 Visa cards, to be selected by random computer draw.

Financial Fitness Challenge Links

See the 2009 Challenge Rules

See the 2009 Challenge Winners

Wrapping up the 2008 Financial Fitness Challenge

We've accepted all the entries we can for 2008 and have posted the monthly Financial Fitness Challenge Winners. We'll invite you to vote all through the month of February for your favorites. One winner will receive $1,000 for his or her contribution of a favorite money management suggestion. Thank you for all of your thoughtful ideas.

Published January 12, 2009

Printed Wednesday, November 25, 2009

ACMG Federal Credit Union