Get Going: How to Start Your Own Business

The Business Plan

In order to start and manage a business it takes motivation, research, preparation, and talent. Before beginning take the time evaluate and explore your business and personal goals. Once you do that, you can use the information to create a thorough and thoughtful business plan that will help you achieve these goals.

Developing a business plan is a great way to force you to think about things that you may not otherwise consider. The plan will become an important tool as you set out to raise capital, and it will provide a guide to gauge your success.

Get a Plan

Write a business plan—even a simple one to figure out who is your market, what your costs are, what you can sell monthly and annually, and what kind of money you can make. Do not start without understanding that you are priced, have the volume, and expenses realistic to make money. Answer the question first—before you commit everything you have to an idea. Not all ideas can make enough money to support you and the cost of running a business.

Business Plan Checklist

Think about the following before you write your plan.

Products and Services

You need to determine what type of business you're starting. What are you interested in doing?
What service or product are you going to sell? Have a clear definition of your products and services.
Understand the strengths and weaknesses. Who is the competition? Why is this product or service better?
Know your costs for producing items or rendering a service.

Market

Who are your target customers? Think of niche markets and a specific target customer.
How will you publicize and promote your business?
This is one of the most underestimated aspects of a business. Advertising does not always bring clients. You must think of both traditional as well as non-traditional methods for attracting customers.

Consider taking a class or classes so you can understand all the aspects of running a business. There are many free classes offered by a variety of institutions, nonprofit organizations, and government programs. Free information could save you time and hastles later.

(http://www.onlinewbc.org/ ) click on business—they have tons of useful links to online programs and tutorials related to business education
(http://www.sba.gov ) United States Small Business Administration. Maintain and strengthen the nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses and by helping families and businesses recover from national disasters.

Business Plan Outline

There is no one formula for developing a business plan, but some elements are universal. The body can be divided into four distinct sections:

1) Description of the business
2) Marketing
3) Finances
4) Management
(http://www.bplans.com/sp/businessplans.cfm ) They offer a comprehensive list of sample business plans.

Essentials

1. Cover sheet
2. Statement of purpose
3. Table of contents

I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance

II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow
III. Supporting Documents
Tax returns of principals for last three years
Personal financial statement
For franchised businesses, a copy of franchise contract and all supporting documents provided by the franchisor
Copy of proposed lease or purchase agreement for building space
Copy of licenses and other legal documents
Copy of resumes of all principals
Copies of letters of intent from suppliers, etc.
From the http://www.sba.gov/starting_business/planning/writingplan.html
Law
What will the legal structure of your business be? You need to determine if you're better off as an S Corp or whether you should form an LLC.
Register the name of the business with your state. Most states have a process on line for registering names.
(http://www.business.gov/ )

(http://mycorporation.com ) MyCorporation.com allows business owners and entrepreneurs across the U.S. to start, protect, market, and manage their businesses quickly and efficiently. They also offer a free trademark search.
Find a location for your business. Shop around for the best deal and location for what you are doing. Read leases carefully and get advice if you need it.
Get business cards and stationery printed.
Determine whether your business requires any local business licenses and apply.
Obtain a sales tax number from the state if you have to charge sales tax.
Obtain a federal tax ID number if you have employees or are incorporated.
(http://irs.gov - you can also phone the IRS for their free Small Business Tax kit at 1-800-829-3676.)

Set up the office with phone lines, computer line, etc.
Create job descriptions, salary levels, and benefits before hiring.

(http://www.doleta.gov/uses/ ) This site has useful information for Assisting employers in filling job vacancies and facilitating the matching of employer and jobseeker needs

Financing

Sufficient capital is probably the single most important factor in starting a new business. It usually makes or breaks a new venture and is the source of most of the stress associated with getting a business off the ground.

Even without a strong financial track record and great personal wealth, raising the funds necessary to start up are within reach for many.

In beginning your search for financing first determine your strategy for obtaining the money to start your business.
How much of your own money can you afford to put into the business? Remember you might not be generating income for a while so you've got to have your personal finances in order.

Can you approach family and friends?

How about using credit cards or a bank loan? Make sure you've got good credit. It will be difficult to get a loan if someone feels you cannot manage your own money. Pay off as many bills as you can, save some money, get a copy of your credit report to understand what it says about you, and build a solid record. Make sure you have credit cards with unused limits - it gives you a better credit rating—and you can use it in an emergency.
(http://www.myfico.com/ )

Open a separate banking account for your business. Find a user-friendly bank and open an account. The bank may require seeing a copy of your business license before opening the account.

There are a host of organizations dedicated to assisting small businesses in securing financing.

Check out http://www.count-me-in.org . Count Me In provides loans from a few hundred dollars to $5000 for your first loan and up to $10,000 for your second loan. Their loan application is online with instructions on how to complete it. Count Me In will take into consideration the type of business you are starting, your prior experience, and how you intend to use the money.

http://www.microenterpriseworks.org The Association for Enterprise Opportunity (AEO), the national association of organizations committed to microenterprise development. AEO provides its members with a forum, information, and a voice to promote enterprise opportunity for people and communities with limited access to economic resources.