There are few things in life as rewarding and personally fulfilling as running your own business. However, before beginning a business venture, there are significant hurdles one needs to overcome.
1. Before starting any business endeavor, it is essential to take care of all the legalities. It is imperative to consult with professional and experienced accountants and attorneys who can apprise you of financial and legal regulations. The following, however, is a just small list of considerations:
• Apply for an Employer Identification Number (this may or may not be applicable).
• Conduct research for the availability of your business name.
• Determine the business structure. Will it be an individual proprietorship or some type of corporate entity? Create your articles of incorporation (if applicable).
• Trademark your company logo and business name. Apply for patents (if applicable).
• Obtain the necessary licenses and permits.
• Establish accounting and recordkeeping systems. Establish a separate business checking account. Keep all business records separate from personal records. Make duplicate copies of all written correspondences, contracts, receipts, etc.
2. It is surprising but true that many entrepreneurs simply fail not because they lacked financing but because they did not possess the necessary business acumen. They were poorly prepared in terms of the knowledge required to manage and maintain a growing business. A good starting point for any would-be entrepreneur is to enroll in seminars or classes offered by the Small Business Administration. One can also take advantage of seminars or workshops offered by the Chamber of Commerce. Many local colleges and universities offer individual classes as well as certificate programs in accounting, business administration, human resources, labor law and marketing. It is also helpful to take classes in desktop publishing, financial analysis, financial planning, graphic design and sales.
3. Obtain the specific, “real-life” skills in order to gain the necessary expertise. Volunteering or working at a similar business can provide you with much needed experience and enable you to become familiar with its actual day-to-day routines, rewards and challenges.
4. Establish a slow but steady approach towards developing your business. Business success just does not spring overnight. Be prepared for unforeseen setbacks or challenges. You may even find that your chosen endeavor actually propels you towards a new direction which could offer an even more lucrative business opportunity.
5. Avoid taking out loans in order to finance your business. Although it is not glamorous, most businesses are started on a shoestring budget. Try to finance as much as you can reasonably on your own. Do not take any unnecessary financial risks.
6. Designate a room in your home as your home office. It should be a “serious” space” that is conducive to work and fosters your individual creativity.
7. Join professional organizations and associations in order to network and publicize your business. Always be ready with business cards, company brochures and pamphlets. Take advantage of any mentoring or consulting opportunities that may arise. Try to volunteer as a contributor to the association’s newsletter, if possible. For most businesses, a website is an indispensable marketing tool.
8. Research your business competitors. Learn about their products and pricing. Find ways in which you can differentiate your product or service. What types of marketing and sales strategies are they implementing? Is their business expanding or are they experiencing financial difficulties?
Writing The Business Plan
A business plan is the foundation and framework for your entire venture and its importance should not be underestimated. For many beginning entrepreneurs, writing a well researched and focused business plan is a major obstacle. Do not skimp on the research. As is so often the case, a great idea does not necessarily translate into a viable business; one that can consistently generate revenue over time. One of the main advantages of undertaking the research and analysis is that it quickly lets you know whether or not your business has any tangible viability. Furthermore, lenders require a business plan as they are most interested in seeing the “numbers.” A business plan can be a series of short paragraphs or a lengthy, highly detailed document replete with graphs and charts depending on the nature of the business. However, all business plans should include the following components:
1. Statement of Purpose.
2. Description of the Business.
3. Financial Data including loans, capital equipment, projected balance sheet and income statement, estimated cash flow statement, breakeven analysis, 3 and/or 5 year income projections.
4. Marketing and Competition (i.e., define your niche market, how will you market and sell your products to your core audience, pricing, profile summaries of your competitors, industry trends, etc.).
5. Management (how will you run your business, will you have employees, etc.).
6. Copies of licenses and permits, lease agreements, insurance contracts and all relevant legal documents.
7. Resumes and biographical synopses of the owners, partners or senior officers.
8. Copies of credit reports and various financial statements.
For informational purposes and not intended as advice.