Before Taking a Bet on a New Business, Think Like Sam Walton

Before Taking a Bet on a New Business, Think Like Sam Walton
Tom Taulli, AOL Small Business

I really like how Wendy first got a job in the field in which she wanted to start her business. True, there are many examples where entrepreneurs jump into a venture -- such as with Wes Hurt and Brian Morris -- but why not spend some time learning the ropes? Do you really need to rush?

Interestingly enough, if you try to get a bank loan, one of the first questions you'll get is: what's your experience in the industry? If you do not have at least a year's worth of experience, then you probably won't get a loan. Simply put, banks have learned the hard way on this.

If anything, by working in the field, you might realize that you really don't want to spend your hard-earned money -- and precious time -- in the business. Unfortunately, there are many unhappy business owners who feel they have no choice but to continue with their ventures. When doing your stint, it's critical that you study every possible aspect of the business. Think of it as a paid MBA (and it will probably be more valuable -- at least for entrepreneurs).

As for Wendy, she counted the number of customers, trying to estimate the revenues. Is this a business that can make money? Are there ways to improve things?

This reminds me of the legendary entrepreneur, Sam Walton. He was a sponge, constantly learning. He visited thousands and thousands of stores (even while he was on vacation), and he counted everything he could. He talked to as many people as possible (and got kicked out of a good number of stores). There was no end for his thirst of knowledge (to get a sense of this, it's definitely worth reading Sam's autobiography, Sam Walton: Made In America).

In fact, Wendy has practiced something else Sam was good at: looking beyond his business. For example, back in the 1960s, he attended a conference about computers. Somehow, he thought they would be important for the success of Walmart.

Wendy was smart to look at the distribution side of her business. How do suppliers work? What can be done differently? Are there ways to improve margins?

I know it's exciting when starting a business. At the same time, the temptation is to get started as fast as possible. However, try to resist this. Get some experience in the industry, learn, and learn some more. Like Sam, you should never stop learning.