The following is a checklist covering the fundamentals of launching your own business venture.
THE IDEA- Every business begins with an idea. The challenge is to come up with one that is practical, useful, and marketable.
NEED- Make sure the world is waiting for your idea. One of the most difficult tasks for entrepreneurs is being honest with themselves. Doing some hard, realistic market research often uncovers a need, and clues you in on the quantity, the quality, and the price that will work.
EXPERTISE- The more knowledge you have about your new business, the more confident you will be to achieve your goals. If you discover any loopholes or doubts, slow down and take the time to find out more about your project.
DISCIPLINE- Look in the mirror and make sure you like what you see. Remember, entrepreneurship means self-management. You are it! The hours will be long, the work demanding, and the income meager at the beginning. You must decide whether you are up to the sacrifices that running a business demands.
FAMILY- Discuss your plans with your spouse and get his or her approval and cooperation. Talk to your kids as well. Running a business is no 9-to-5 job. You can’t do your best if you have to struggle with family resentment.
START-UP- There’s a lot of baggage to take along on your road to success. Now is the time to sort it all out. Make lists, think things through, and allow time to do everything. Time and money, particularly at start-up, are elastic. Allow for a safety margin.
PLANNING- The best-laid plan is a business plan. A business plan preparer or accountant can write it for you, but you still have to do the thinking and come up with the basic figures. There are two primary reasons for writing a business plan: A) To guide you in developing your business along sound lines and call your attention to any oversights; and B) To provide basic documentation to help get a bank loan or other financing. The key to a good business plan is being honest with yourself. Don’t fool yourself – because you certainly won’t fool a banker.
CAPITAL- The simplest way to finance your business is to start with your own money. The next best way is to borrow other people’s money, whether from family, friends, shareholders, or a bank. But don’t borrow more than you need; remember, it has to be paid back, usually with interest.
PARTNERSHIP- Like marriage, a partnership is something desirable; and, like marriage, it is often difficult. You may want to explore a partnership if you: A) Need additional capital you cannot raise through family, friends, or investors; B) Need someone to balance your skills or shortcomings; or C) Do not want to assume full responsibility and the time it takes to run a business alone. If you go the partnership route (even with a relative or close friend), get a good lawyer.
BREAK-EVEN POINT- Determining the break-even point for a service business is more difficult. Keep a time sheet for a week or so, jotting down everything you do during the day. You’ll probably be surprised to discover that only 30 to 50 percent of your time can be ascribed to a specific task or customer. To compensate for the rest of your time, you need to double or triple the amount you want to earn after expenses.
COMPETITION- If you have a good product or service, plenty of people will be trying to do it better. Protect yourself by keeping an eye on competitors, even indirect ones.
NETWORKING- It is important to be out there today, meeting people in person. Attend events, go to conferences, be a joiner. Even online networking is important, but ultimately it helps to meet people where they are.
RESOURCE- Some of the best things in life are free. Take advantage of a wealth of knowledge at little or no cost from the small business development centers and small business institutes, all of which offer counseling in every stage of business.
LOCATION- If you’re planning to start a business outside your home, you may be embarking on the biggest business investment of your life. Before you sign on the dotted line, be sure the location meets your needs. Check zoning, signage, and peripheral expenses, in addition to the lease, escape clauses to allow for emergencies, neighbors, competitive restrictions, parking, utilities, your landlord’s reputation, and traffic patterns. Then get a good lawyer who can read the fine print and triple-check every word.
ACCOUNTING- A good accounting and record-keeping system set up by a knowledgeable professional is a must. Even the best system, however, serves little purpose if it is above your head or beyond your capacity to maintain. You need to be able to read the figures for yourself. Your accounting system should be able to tell you three things: 1) How much money you have at all times; 2) What bills you need to pay and when; and 3) What taxes are due and when.
MARKETING- There are many ways of selling your products and services—advertising, sales promotion, packaging, signs, sales training, trade shows, direct mail and mail order, as well as other merchandising methods. You can also hire professionals to do them; but ultimately, it’s up to you to understand these strategies and monitor them continuously.
CREDIT- From the start, establish a credit policy for your customers, detailing how you’ll handle credit cards, partial payments, discounts, layaways, returns, delayed payments, and excuses. How far you will extend credit and to whom must be part of a formal policy that should be made clear on your billing invoices and in your dealings with customers and clients.
PRICING- How much you charge often determines how long you stay in business. When setting prices, take into consideration all your anticipated expenses, as well as what the competition charges. A superior image often allows you to charge more: Customers may be willing to pay extra for convenience, reliability, and great service.
ETHICS, ENVIRONMENTAL CONCERNS, AND QUALITY (EEQ)- More and more educated consumers appreciate EEQ and the businesses that practice it. Keep in mind, you will have no problem doing the right thing by your environment, employees, and customers.
THE FUTURE- Think beyond today’s idea and into the future of the business. Entrepreneurs often suffer from burnout. Plan for the future now, and today’s small business may grow to be extremely valuable, and generate enough money to finance tomorrow’s big idea.
This information was provided to you by MBA Highway. We hope you have found it useful to launching your own venture.