Be your own boss: the best time to jump in to self-employment

Say you've worked hard your entire life, lining someone else's pockets and now you'd like to start your own business. Only you know if the timing seems right for this venture, but a few things you'll need to be sure of is your own dedication, your financial situation and some expertise in the area you're considering. If you're currently struggling to make ends meet, you'll need to postpone the change until you've got some cash reserve. A new business takes time to turn a profit, if it ever does, so plan on having at least enough money saved to support your family and pay all the bills at home and business for at least two years. This is in addition to the cost of setting up the enterprise.

Before even considering setting out on your own, it's vital that you have the proper training to not only speak informatively about your products, but to have some kind of business training to help you in making decisions for and about your company. Whether your business will be a restaurant, a dry cleaning store or a print shop, it's recommended that you take some initial business courses before proceeding. Of course, there are people who will be happy to keep your records, pay your bills and manage your business, but these services are costly and may not leave you with the input that you'd like to have in your own company. There are others who do need to have some input in your business - your family. If they're not happy with the decisions being made, you're likely to have family problems that will later become business problems. Discuss the business plans with your spouse or potential business partners, so that each is aware of where they stand in the company, if they have a place in the company, and what is expected of each person.

Having the right approach is a necessity to starting your own company. Be prepared to work long hours, possibly for months or years, with little reward or income. And, don't be surprised if you not only don't break even, but you also show a loss over the first few years. It might even be necessary to have family or friends assist you with little or no pay to keep your head above water. Expect the unexpected. Prepare for the supplies you might not need, have money put back for vehicle repairs that might not come about, and set aside time for working when you might not have to. This way, you're prepared for much of what will pop up with little notice.

Before starting, have a workable business plan. Be realistic. Consider aspects of the area where you'll set up shop, be aware of tax issues and think about licenses and other additionals. Have capital and resources established long before the welcome mat is in place. Be ready to take action and implement various plans at different stages in the setting up of your business. And, include in your business plan a program of studying the job market, particularly in your chosen field and making discoveries of how others in your field operate and what they charge.

Being self-employed usually requires more knowledge, time, resources, and energy than working for someone else. Make sure that you are committed to whatever it takes to make your venture successful. This may mean putting off other goals and plans in your personal life. A general rule of thumb is to estimate how much time you think it will take to operate your store, then double that estimate. You might not think that this many hours will be needed, but it is an accurate way to determine how much commitment will be required of you. Likewise, estimate the cost of setting up and running the business for a year, then add half that figure again to get a realistic view of how much of an investment will be needed.

Of course, some types of businesses are a little more flexible in terms of time and commitment than others. You might want to adjust your business goals to fit in with your lifestyle. For instance, if you're determined to have your nights and weekends free, you'll have to eliminate many businesses from the list of possible ventures you can start, such as a real estate company. But, this doesn't mean that you can't run your own company. There are businesses to suit every lifestyle; you'll just need to choose an appropriate one for yourself.

If you're the nervous type, afraid to fire someone, too meek to speak up or you spend endless nights not sleeping then you're probably not ready for your own company. And, if the company is eventually started, recognize if the business is not succeeding and when to pull the plug if it becomes necessary.

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What to take to a job interview

Getting a job interview provides an opportunity to convince an employer to hire you. Looking your best, you plan ahead for all the things you want to say and do, as well as those to avoid. But what should you take along with you?

1. Take a completed job application. This document may have been sent to you with an invitation for the interview. Or you may have filled one out weeks before, which led to the call for an interview. A third option is that you may be handed an application to fill out in the lobby as you wait for your interview appointment. Complete the form in dark ink, writing or printing neatly. Use full names and addresses, leaving nothing blank unless you have no information to add for categories like military service if you have not served in the armed forces.

2. Take a copy of your resume or vita. Even if you sent one beforehand, it is not unusual for an employer to have questions about your background or work history, and you will find it convenient to refer to the copy in your lap rather than guess from memory or ask to see the employer's copy. Sometimes an advance copy can get mislaid, so an extra can always come in handy.

3. Take your reference letters. As with the vita, you may have sent copies ahead of time, although most job seekers do not. Bring along copies to discuss during the interview if the opportunity should arise during an employer's questions, for example. You also can offer to leave copies of your references as the interview comes to an end. The interviewer is likely to appreciate your foresight and thoughtfulness. If you don't have actual letters yet, you can leave a list of three or four professional contacts who have agreed to provide contact references if needed.

4. Take along copies of licensing, certifications, or course completion that will indicate your suitability for the position. Most employers will not ask for proof of these things during an interview, but in case yours should mention them, you will have something ready to show him or her. Plus there may be information on these documents that you can quickly allude to, such as the date a certification was awarded, whether it is an accredited institution, etc.

5. Take with you a driver's license and other miscellaneous documents that might be needed. Occasionally an employer might ask to see a photo identification, such as a driver's license. Or if you are applying for a job where driving might be required, proof of a state driver's license and auto insurance may need to be provided. In addition, if your job will require overseas travel, bring your passport or immunization record, not that you will necessarily need these at the interview, but to show them when the opportunity arises as added proof that you're on the ball, and thus a good fit for the job.

6. Take along information about the company. This may have been sent to you with the application, or you might have downloaded pages from the Website. Either way, it will help to have notes or details available to show the employer that you are interested in the company and as support any questions you might have.

A slender file is all you will need, but it may be enough to demonstrate your professional competence and ensure a hiring decision in your favor.

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How to Get a Business Loan

Small businesses are the economic lifeblood of this country, and the majority of them began with help in the form of a small business loan. Very few small business owners have the funds available privately to start or expand their enterprise, so most are forced to seek out loans to move their vision forward.

But there are some things that everyone should know before applying for a small business loan. It's always important to know what the bank or lending institution is looking for, what factors go into their decision to either grant or reject your loan. By playing to these factors, you can better your chances of securing that money for your business.

What is your personal story? Firstly, the bank will want to know about you. Your credit history, experience and education will all be factors preliminarily considered in the process of your application. These things speak to who you are as a business person, your credibility for running your own business.

What is your Business Plan? The meat of your proposal will be in your Business Plan. This is an outline you will present to the bank detailing your business idea while providing answers to the questions that the bank has.

How much are you applying for? This figure should be all-encompassing. It should include costs for startup and overhead as well as operations costs like payroll and inventory. It is very important to you and the bank that this number be as accurate as possible.

Where is this money going? Again, accuracy and detail are important here. Your business plan should have a detailed breakdown of how much is going where and for what.

When can you repay your loan? This is the question that anyone, from the bank to your wealthy relative will want an answer for. Be professional. Use financial statements and cash-flow projections to illustrate how your business will generate profit and be a good investment for the bank.

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15 Steps for Successful Strategic Alliances (and Marriages)

Wedding bells fill the Northern Hemisphere air for this season's happy couples. Among the newlyweds armed with pre-nuptial agreements are numerous companies starting strategic alliances, joint ventures, and focused collaboratives.

Unlike full-blown mergers, in which two really do become one because one company disappears, alliances and partnerships resemble modern marriages: separate careers, individual checkbooks, sometimes different names, but the need to work out the operational overlap around household and offspring.

For many years, I've helped major companies and other organizations extract value from their strategic alliances or watch them disappear. I've developed a 15-step guide to ensuring success as every stage of the relationship, from courtship to ongoing success (first reported in my book World Class).

So here is my business marriage counseling advice. Any resemblances to personal marriages or advice for June newlyweds are strictly intentional.

1. Be open to romance, but court carefully. At the beginning of new relationships, selective perceptions reinforce dreams, not dangers. Potential partners see in the other what they want to see, believing what they want to believe. Hopes, dreams, and visions should be balanced by reality checks.

2. Know yourself. Build your strengths. An organization seeking partners should identify assets that have value to partners and strengthen them. Networks of the weak do not survive. The best alliances join strength to strength.

3. Seek compatibility in values. In rapidly changing environments, compatibility in values, philosophy and goals is more important than specific features of an immediate business deal. The basis for collaboration must be more enduring, and there must be a foundation for mutual trust to help weather inevitable changes or problems.

4. Treat the 'extended family' respectfully. Include other partners and stakeholders. Rapport between leaders of partner organizations is not enough. Other people and organizations who are the 'relatives' in each organizations' extended family must also be won over.

5. Put the lawyers in their place. Leader-to-leader relationships are important. Partnerships and network formation shouldn't be turned over to third-party professionals, such as staff analysts, lawyers, consultants, or deal-brokers.

6. Vow to work together until business conditions do us part. Commit to a first project, to exploring growth in the relationship, to monitor change, and to remain friends if changing conditions require a graceful exit.

7. But don't count on the contract. Formal agreements can't anticipate everything, and interpretations of the agreement vary — even within the same organization.

8. So keep communicating, face-to-face. Matters are more easily sorted out when partners' leaders keep talking long after their initial deal-making and dedicate people to watch over the relationship — a partner or alliance 'ambassador' (the equivalent of key account managers).

9. Spread involvement. Create more ties for more people. Alliances begin with a few direct connections among top leaders. As projects unfold, more people at more levels must get involved, and they need to feel connected, too — that they know their counterparts in their partner organization. The more people feel included, the more they have a chance to see the others face-to-face and come to know them, the easier it will be to implement partnership activities.

10. Build organizational bridges — formal structures. Active collaboration occurs when organizations develop structures, processes, and skills for bridging organizational and interpersonal differences and getting value from the relationship. Bridges include formal governance (a partnership board), joint project teams, and alliance ambassadors.

11. Respect differences. Alliances, partnerships, and networks are most helpful when they involve differences — when partners give each other something they do not already have. But differences in "specialty" desired by partners are accompanied by more "inconvenient" differences in behavioral style, motives and goals, operating methods, or cultural assumptions. Respect is essential. Time must be invested in understanding differences and transcending them.

12. Teach partners. Learn from partners. People from across the partnership network must become teachers as well as learners. Often the ultimate value of a partnership is the new knowledge and skill it brings. Organizations that derive greater value from their alliances tend to have greater communication internally, share more information, and promote an atmosphere of learning.

13. Be prepared to change yourself. Partners must be willing to be influenced by one another. To make linkages possible requires operating compatibilities, project by project and sometimes even in a larger sense. This can mean learning the other's language and style or inventing a new one; changing to the other's system or creating a joint one.

14. Help everyone win. Mutuality is the hallmark of organizational collaboration. Balancing benefits so that each partner gets something of equivalent value can be hard to do in the short run, but it is essential in the long run. The best alliances try to maximize the value of the whole relationship, which then makes it more valuable to each partner.

15. Get closer, change course, or exit gracefully. Like living systems, relationships evolve. Change should be expected. But the best guarantee that organizations will be closer in the future is success in what they try to achieve today. Success strengthens relationships.

To ensure that your partnerships are effective, apply these principles at every stage of the relationship. Then toast the benefits of happy marriages!

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Career Decisions and Generation X

Here are a few more of the questions that came in during a recent HBR-sponsored webinar — but that we didn't have time to get to. These are primarily focused on career decisions and interpersonal dynamics in the workplace. I hope you'll share your own views.

On-Ramps

You asked: What do good on-ramps for X'ers look like?

Good on-ramps for X'ers should build capital and offer choice. That capital comes in three forms: social, emotional, and intellectual — and all three are important components of successful on-ramps.

Social capital is about relationships — helping people who've taken time off retain their connections.

Emotional capital is about feeling committed to the organization — creating touch points that reflect the values that drew the individual to the company in the first place.

Intellectual capital is about knowledge — keeping individuals up to date on the expertise they'll need to do the job well once they return.

X'ers particularly value choice. Companies should offer options for work arrangements, designed to allow talented X'ers to choose the approach that will work for them. For more on the importance of on-ramps, see Carolyn Buck Luce's recent post.

Multiple Careers

You asked: Does the longer life expectancy explain why people are retiring from two and three jobs?

To some extent, yes. However, I think other factors, such as the increase in the labor market's instability over the past several decades, have had a more significant influence. After watching several decades of layoffs, X'ers today tend to be very wary of putting all their eggs in one corporate basket. They don't like to be pigeonholed, or pushed out on a limb of specialization, knowing the inherent danger that, in a fit of whimsy, the corporation will saw the branches off behind them during the next restructuring. In our research, they are the generation most likely to fear being laid off and to feel at a dead end in their corporate careers. One of their highest priorities is keeping their options open and their skills diverse — to be as self-reliant as possible.

Tribal Bonds

You asked: When your company has offices in many locations, and the next higher position is somewhere other than where you are now, how do you minimize the severing of ties?

The approaches for staying in touch are fairly straightforward, although new technologies like Facebook and LinkedIn certainly make that easier than ever before. The more important question for companies to wrestle with is whether that next higher position has to be based in a new location. Many progressive firms are beginning to look at the benefits and tradeoffs of having a leadership team that is geographically dispersed. Again, with new technologies, it's becoming more possible for people to live near their "tribe" and work anywhere, any time.

Family Values

You asked: How should an X'er communicate the need for better work-life balance in a way that an employer can accept and respond to with a positive change? Are X'ers deciding not to have children and, if so, why?

X'ers are having children, although the birth rates are lower than they were several decades ago. The key to communicating any request is to address its implications for the company right up front, and of course, if possible, in a positive way. I strongly recommend using ROI language (and I talk about how to do that in the book I wrote for Gen Y: Plugged In). Don't sugarcoat the analysis; consider all the pros and cons for the organization of the change you're requesting; and identify appropriate remedial actions.

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