People
are always asking for a list of fundamentals, a checklist they can use to start
their own businesses. From your business type to your business model to your
physical location, there are so many variables it’s not easy to come up with a
list that will work for everybody. The key, regardless of what type of business
you’re starting, is to be flexible! That said, here’s are seven steps to take
before you start your business.
Step 1: Personal evaluation.
Begin
by taking stock of yourself and your situation. Why do you want to start a
business? Is it money, freedom, creativity, or some other reason? What skills
do you have? What industries do you know about? Would you want to provide a
service or a product? What do you like to do? How much capital do you have to
risk? Will it be a full-time or a part-time venture? Your answers to these
types of questions will help you narrow your focus.
Step 2: Analyze the industry.
Once
you decide on a business that fits your goals and lifestyle, you need to
evaluate your idea. Who will buy your product or service? Who would be your
competitors? You also need to figure out at this stage how much money you will
need to get started.
Step 3: Make it legal.
There
are several ways to form your business ?– it could be a sole proprietorship, a
partnership, or a corporation. Although incorporating can be expensive, it is
well worth the money. A corporation becomes a separate entity that is legally
responsible for the business. If something goes wrong, you cannot be held
personally liable.
You
also need to get the proper business licenses and permits. Depending upon the
business, there may be city, county, or state regulations as well as permits
and licenses to deal with. This is also the time to check into any insurance
you may need for the business and to find a good accountant.
Step 4: Draft a business plan.
If
you will be seeking outside financing, a business plan is a necessity. But even
if you are going to finance the venture yourself, a business plan will help you
figure out how much money you will need to get started, what needs to get done
when, and where you are headed.
Step 5: Get financed.
Depending
on the size of your venture, you may need to seek financing from an “angel” or
from a venture capital firm. Most small businesses begin with private financing
from credit cards, personal loans, help from the family, etc. As a rule of
thumb, besides your start-up costs, you should also have at least three months’
worth of your family’s budget in the bank.
Step 6: Set up shop.
Find
a location. Negotiate leases. Buy inventory. Get the phones installed. Have
stationery printed. Hire staff. Set your prices. Throw a “Grand Opening” party.
Step 7: Trial and error.
It
will take awhile to figure out what works and what does not. Follow your
business plan, but be open and creative. Advertise! Don’t be afraid to make a
mistake.
Above
all, have a ball! Running your own business is one of the great joys in life!
No comments:
Post a Comment