Starting a New Business

Introduction

Starting a new business is one of life's important steps, whether you are starting your first business, or moving into a new business after years of experience. Unfortunately, most new businesses fail, and many of them fail because of poor planning at the start of the business.

Many of the decisions that you make today will affect the operation of the business in years to come. Planning now, and making informed decisions, with long range planning, can help your business grow, and keep its problems to a minimum.

To increase your chance for success, take the time to explore and evaluate not only your business goals, but your peraonal goals as well. Discover your positive traits, as well as your negative ones, and consider them as you plan your business. Use this information to build a comprehensive and well-thought-out business plan that will help you reach these goals.

The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.

Getting Started

Before starting out, list your reasons for wanting to go into business. Some of the most common reasons for starting a business are:

You want to be your own boss.

You want to set your own hours

You want financial independence.

You want creative freedom.

You want to fully use your skills and knowledge.

Next, you need to determine what business is "right for you." Ask yourself these questions:

What do I like to do with my time?
What technical skills have I learned or developed?
What do others say I am good at?
Will I have the support of my family?
How much time do I have to run a successful business?
Do I have any hobbies or interests that are marketable?

Then you should identify the niche your business will fill. Conduct the necessary research to answer these questions:

What business am I interested in starting?
What services or products will I sell?
Is my idea practical, and will it fill a need?
What is my competition?
What is my business's advantage over existing firms?
Can I deliver a better quality service?
Can I create a demand for my business?

The final step before developing your plan is the pre-business checklist. You should answer these questions:

What skills and experience do I bring to the business?
What will be my legal structure?
How will my company's business records be maintained?
What insurance coverage will be needed?
What equipment or supplies will I need?
How will I compensate myself?
What are my resources?
What financing will I need?
Where will my business be located?
What will I name my business?

Your answers will help you create a focused, well-researched business plan. that should serve as a blueprint. It should detail how the business will be operated, managed and capitalized.

One of the most important cornerstones of starting a business is the business plan. SBA offers you a tutorial on preparing a solid plan with all its essential ingredients. Be sure to review and peruse this section.

Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.

Contents Copyright 2000 LawHog.com, Inc., and its individual authors. This information is educational in nature and should not be construed as legal advice. Legal decisions can change based on the jurisdiction, and particular facts.