Starting a Business
An Idea is Born
So you have a great idea for making money ... now you must convince a large enough segment of the population that they want your product or service. Here are three simple steps you can take before engaging in any major research:
- What is your potential customer profile, including gender, marital status, income range, etc.
- Create a simple questionnaire and distribute a few hundred copies.
- Administer the questionnaire during one-on-one interviews or through a focus group.
- Compile your results. If the initial feedback is positive, you can move to the next step.
Assembling Your Team
Besides doing your research to shape your business plan, you will need a team of professionals to prepare you for success. You should have a CPA, a banker, an IT professional, and a business coach and/or marketing professional to help you launch and manage your business. You can also get free assistance through the U.S. Small Business Administration (SBA). Our chamber professionals are always ready to assist you.
Online courses for small business owners are available through Small Business Administration.
Your Business Plan
This year, more than 100,000 businesses will start up in the United States. Within three years, half will be out of business. The single biggest reason for failure is the lack of planning. Here is what you want to include in your business plan for success:
A business plan should include the following:
- Detailed description of the business' history, including name, type, location, products/services offered, hours of operation
- Legal structure, ownership percentages, agreements, succession plan, organizational structure, management, qualifications, resumes, expertise, duties and responsibilities, professional services available and need.
- Personnel duties, responsibilities, compensation, policies and procedures
- Industry/market size and demographics, product/service research, development and production cost, price structure and strategy, equipment, maintenance, inventory, warehousing cost, distribution plan and cost
- Your competition, the uniqueness of your product/service, what percent of the market you will have and how you expect to obtain it
- Marketing plan and strategy, market research, survey data results, target market, advertising/sales goal and strategy, objectives, timeframes and budget
- Financial data, overall budget
- Business' past performance and three to five year projected income and expenses, including payback schedule.
- If you are seeking funding, an executive summary addresses the questions of potential lenders’ what, why, and how.
- Persons seeking to start a business can profit from a few simple guidelines:
- Decrease personal needs; consider credit card financing
- Offset immediate cash needs by promising future payoff for professional services as well as labor
- Scale back living expenses; defer what you can
- Ask suppliers to extend credit or even provide funding for your venture in exchange for your account
- Raise capital incrementally