Starting and managing a business takes motivation, desire and talent. It also takes research and planning. Like a chess game, success in business starts with decisive and correct opening moves.
And although initial mistakes are not fatal, it takes skill, discipline and hard work to regain the advantage. To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well-thought-out plan that will help you reach these goals.
The process of developing a 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.
1. 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 financial independence.
- You want creative freedom.
- You want to fully use your skills and knowledge.
2. 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?
3. 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’ advantage over existing firms?
- Can I deliver a better quality service?
- Can I create a demand for my business?
4. 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 by business?
Your answers will help you create a focused, well-researched 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.
The U.S. Small Business Administration’s extensive Web site offers a tutorial on preparing a solid plan with all its essential ingredients. You can find it at www.sba.gov.
Once you have completed your 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 plan is a flexible document that should change as your business grows.
For more information about all of SBA’s programs, call the SBA Answer Desk at 1-800-U-ASK- SBA or TDD (704) 344-6640, or visit the Web site.The Alabama State Bar requires the following disclosure: No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.