Starting and managing a business takes motivation and talent. It also takes research and planning. Although initial mistakes are not always fatal, it takes extra skill, discipline, and hard work to regain the advantage. Take time beforehand to explore and evaluate your business and personal goals, then use this information to build a comprehensive and thoughtful business plan that will help you reach these goals. Developing a plan will force you to think through some important issues that you may not otherwise consider. Your plan will become a valuable tool as you set out to raise money for your business, and it will provide milestones to gauge your success.
1. List your reasons for wanting to go into business. Some of the most common reasons for starting a business are:
- Financial independence
- Creative freedom
- Full use of personal skills and knowledge
2. Next 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. Identify your business niche. Research and 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?
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 legal structure will I use?
- 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 will serve as a blueprint for business operations, management, and capitalization. Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.