Starting a Business : Starting a Business First steps and considerations
Is starting a business right for you? : Is starting a business right for you? If you are taking this class you are seriously considering starting your own business. However there are many things that you will want to think about when you are first starting out. Identifying potential roadblocks and finding solutions early on can make the difference between success and failure.
Starting a business requires effort. : Starting a business requires effort. Before you jump in you need to be prepared. Start ups require considerable time, research, resources and money. Most people will acquire a business loan but there may be expenses that you will need to finance on your own. Often this can be achieved through investors, grants, programs or self finance.
What kind of business do you want to start? : What kind of business do you want to start? Maybe you already have an idea of what kind of business you want to start and maybe you just know that you want to run your own business. Either way there are decisions to make and research to conduct. If you are considering more than one idea you will need to conduct research and compare your options in order to make the best choice.
PowerPoint Presentation : Make a list of potential business ideas. Consider what kinds of businesses you are interested in and why you want to start that type of business. Think about what products and services you want to provide and how you can set your business aside from the competition .
Do you have the skills? : Do you have the skills? Now that you have an idea of what kind of business you want to start; you need to ask yourself if you have the necessary skills, training and experience to pull it off. You will need to look into any requirements for licensing, certifications, etc. Making sure that you can fulfill or obtain these requirements is essential because failure to do so can result in loosing your business, money loss and legal problems.
PowerPoint Presentation : To begin you need to research governing bodies and laws that pertain to your business. Is a degree required in your field? If so, do you posses said degree or are you willing to complete the necessary educational requirements? Are there certifications or licensing required? Research what you need to qualify and make arrangements to take any classes, courses or training needed. Potential employees may also need to do this. You may also need a certain amount of experience before going out on your own.
Background and Credit Checks : Background and Credit Checks Once you have taken care of any needed requirements or certifications you are going to look into whether or not you need to conduct background and credit checks. Background and credit checks on all owners and employees are sometimes required by law (for example businesses that work with minors or those who handle large amounts of cash). If you need these get them done right away. It is recommended to get credit checks done before applying for funds to give you time to correct errors on your credit report.
Identifying Target Markets : Identifying Target Markets The next step is to identify your target markets and to research this in your area. First you want to consider who your clients or customers are going to be. Understanding things about your customers like age, socioeconomic status, personality, behavior, spending habits, income levels, education, occupations, and more will help you to market your product or services most effectively.
Target Markets Cont. : Target Markets Cont. This is also going to help you when you are starting out because it will help you to design your products or services with your customers in mind. Other things that may help you, is to research the demographic and geographic information of where you starting your business. Consider things like climate, population density and supply and demand.
Evaluating the Competition : Evaluating the Competition The next thing you might want to do is check into your competition. Find out how many direct competitors you have and look into their businesses. What about their business, practices, services or products do you like the most and what would you change? This information will help you to set yourself aside from the pack and will give you a strong advantage.
Acquiring supplies and equipment : Acquiring supplies and equipment Next you are going to need to itemize exactly what you need to start your business. Now is the time to start researching suppliers and getting an idea of what you need and where to get it. (Many places will require you to have your business license and tax information before discussing the specifics.) Knowing this information is essential to creating your business plan.
Estimating your costs : Estimating your costs As you are looking into the items, supplies and equipment you will need it is a good idea to research the costs as you go. This will help you to itemize your funding needs and calculate an estimate of how much you need to finance. It will also help you to determine the best funding option.
Common Startup Costs : Common Startup Costs Buying or leasing a property. Paying for certifications, clearances, business license, etc. Equipment, supplies, inventory. Taking out a newspaper ad to announce your business. (Commonly required upon licensure.) Hiring employees. Insurance, taxes and fees.
Make a List : Make a List Start by making a list of all your potential costs. Once you have a list to work with, you need to get actual cost estimates. Begin by researching each item on your list and start recording values that you find. For example if you are looking into purchasing a property you might want to itemize the cost of each potential building you are interested in. This information is necessary for your business plan.
Finance Plan : Finance Plan Once you have an idea of how much your startup is going to cost you can start estimating two other crucial parts of your business plan. First you need to know how much money you will need to finance. Second you will need to figure out how long you will have to finance your business before you start making a profit. (Bear in mind, most businesses do not make a profit in the first two years due to initial costs and time to needed to establish a customer base.)
Finance Plan Cont. : Finance Plan Cont. Knowing this information is essential before you apply for a loan. It helps the bank or investors to see that you understand your costs and potential profits. It also helps your lenders to get an idea of when they can see a repayment or return on their investments. This will help you in negotiations as well.
Taxes : Taxes Due to the extensive detail of tax information, this will be covered in another class. However here are some general tips for taxes. First hiring an accountant or attorney that is familiar with the tax laws and requirements is highly recommended. Second, save at least 10% of sales and capital for paying you taxes. Third save ALL receipts and keep them organized.
Insurance : Insurance Insurance is a commonly overlooked expense for first time business owners. You will need insurance for the business itself, the building you acquire, and your equipment. In addition most states require that you provide some level of insurance to your employees. This includes by is not limited to workman’s comp, liability, health insurance, dental insurance and life insurance.
Conclusion : Conclusion As you can see there are a lot of things to consider when starting a business. This can be overwhelming, but take one task at a time. Set goals for what you want to accomplish and when. The more organized and prepared you are, the better your chances of success.