If you ask 100 people with traditional jobs why they’ve never started their own business, a common response that you’d get would be a lack of business experience. Most people see prior business experience as a necessary prerequisite to starting a business of their own.

In some cases, this sentiment is correct. Some businesses do take a substantial amount of experience to successfully start and run. Most financial services and medical products companies, for example, are started by people with deep industry backgrounds and business expertise. There are also technical aspects of running a business, such as finance and accounting, which take time and effort to learn and perfect, regardless of the type of business. In these instances, people who have business experience have a leg up on those who don’t. It’s also easy to envision the advantage that someone who has managed people and run a successful business before might have over someone who hasn’t.

But there are many examples of people who’ve started successful businesses without prior business experience. Bill Gates of Microsoft and Michael Dell of Dell are two examples. Many people become passionate about a business idea and pursue the idea regardless of their level of prior business experiences. There are a variety of ways that people compensate for their lack of experience. Some start their business part-time and learn as they go. Others take on a partner who has business experience or make key hires early on. Still others take classes through their local Small Business Development Center or rely on SCORE (Service Core of Retired Executives) advisors for help (free, online at www.score.org).

There are many examples of people who’ve started successful businesses without prior business experience.

There are also alternatives for starting a business that minimize the need for prior business experience. These alternatives allow people to pursue an opportunity in which the fundamentals of the business have already been thought out. The alternatives include franchising, direct sales, and businesses that have wellestablished business models.

There are also alternatives for starting a business that minimize the need for prior business experience. These include franchising, direct sales, and businesses that have wellestablished business models.

Franchising is a form of business ownership in which a firm that already has a successful product or service (franchisor) licenses its trademark and method of doing business to other businesses (franchisees) in exchange for an initial franchise fee and an ongoing royalty. In some industries, such as restaurants, hotels, and automobile service, franchising is the dominant form of business ownership. Franchising provides an individual the opportunity to own a business using a tested and refined business system. The franchisor also typically provides training, technical expertise, and other forms of ongoing support. Many franchise systems are open to people with general skills but no prior “domain-specific” or other business experience. In fact, some franchise systems shy away from people with prior experience in the field the franchise operates in, fearing that they could have too many preconceived notions about how to run the business.

Direct sales is another option. While most people cringe when they hear the words “direct sales” (or multilevel marketing), there are legitimate direct sales opportunities. Currently, there are over 14 million people in the United States involved in direct sales.^[1] Well-known direct sales companies include Tupperware, The Pampered Chef, Avon, and Discovery Toys. Although the direct sales industry as a whole suffers because of the high-pressure sales tactics of some of its members, there are an increasing number of highly legitimate opportunities. (More about this in Truth 13, “Believe it or not: There are legitimate opportunities in direct sales.”) The majority of direct sales organizations do not require their participants to have prior business experience.

A third option is to start a business in an area where the business’s business model is well documented and well understood. A firm’s business model describes how it operates and makes money. An example of a business with a well-established business model is a bed & breakfast. Dozens of books are available that provide advice about how to open and run a successful bed & breakfast and provide instruction for how to manage day-to-day operations. Workshops are also held periodically across the country about how to open and operate a successful bed & breakfast. There are many similar examples. Following a well-established business model negates, at least in part, the prior business experience needed to launch and run one of these businesses.