Introduction:
Thinking of starting a business? My hat is off to you, and
I hope that this blog can provide resources for you to get
started. Since my retirement from industry six years ago, I
have been a SCORE volunteer (Service Corps of Retired
Executives). Over these years I have met many clients who
dream of starting their own business. Their motivation to
start a usiness may vary, but their common goal is a desire
to be successful and to be their own boss. My experience
has imparted to me a good sense of those who will be
successful and those who will not be successful. It is
those people who are prepared and have a strong urge that
are successful. From my training and experiences I have
prepared a suggested road map to start your own business.
Do take advantage of your local SCORE volunteer while
planning for your business. The service is free and the
volunteer can be found through your local Chamber of
Commerce.
The Business Idea
The idea to start your own business can come from many
sources: your hobby, your work experience, your desire or a
situation you found where a service was not being met. To
confirm that you have a sound plan you have to: - Describe
the business in a paragraph or less. - Decide if the
product or service is unique... cheaper or faster, etc.? -
Decide whether this business meets your personal goals? -
Commit to investing many hours to make your business
successful? There are many other questions that you will
need to answer truthfully to yourself and then discuss them
with your spouse and close friends. Once you are
comfortable with the answers then you are ready to proceed
to the next steps. The Small Business Administration has a
full list of questions to help fulfill this part of the
journey. http://www.sba.gov Above all, your business has to
"solve your client's problem". It is this objective that
makes a business successful. If this main objective is met,
then all your other needs can be fulfilled.
Start Preparing for Your Business Plan:
You need to do some basic work before you prepare your
business plan.
Finding a Business Name: You need to derive a business name
that represents your dream of a business yet does not
infringe on another business. Your State's Secretary of
State can readily tell you if you have a unique name. You
will find that this is important as you get deeper into
your business plan. Try to derive the most attractive name
you can identify.
Finding a Potential Location: Is your business going to be
a storefront, web site, home or perhaps out of a van
business? Inputs to your business plan will require lease
or rental expenses, insurance and other facility expenses.
Just as importantly, you will have to determine the traffic
past your selected location and how many potential
customers your business will attract. The more attractive
locations will attract more business but will be more
expensive. A local commercial real estate agent is of great
value to help you with this decision.
You need a Logo: I believe that all businesses should have
a logo. It will be added to checks, business cards,
literature and other materials. In my opinion, it brings
the business together. The logo will be used on business
cards, letter heads, web sites and all other forms of
advertisement. Take a look at
http://www.logomaker.com/index.html for a very reasonable
logo design.
Business Structure: You need to decide on your legal
business structure. The options are: Sole Proprietorship C
Corporation S Corporation Partnership Limited Liability
Corporation (LLC) For the majority of my clients, the
Limited Liability Corporation is the best fit. For a
reasonable fee you can have a business entity that has
limited liability for business debts, which protects your
personal properties. You can form the LLC with your State's
Secretary of State. A good Web Site to review the four
business structures is: http://www.quickmba.com/law/org/
Employer ID Numbers (EINs): You should get an Employer ID
Number (EIN) from the Federal Government. The number is
issued by the IRS and it is free. http://www.irs.gov/. At
the minimum this will save your using your Social Security
Number for identification. The IRS site has lots of good
information on small businesses that can be of benefit to
you.
Write Your Business Plan: The business plan is the most
important document for starting your business. The Small
Business Administration has a template that you can use to
write the business plan. http://www.sba.gov The business
plan document should have the objectives of the business,
its structure and it financial road map. This document will
always be used to keep all participants on the same
roadmap. It is the most laborious yet important document
you will derive. This document should be reviewed by your
spouse, good friends, and SCORE Counselor. A good web site
to find samples of business plans is
http://www.bplans.com/. This site shows examples of
successful business plans and also has good information for
starting a business. Again, I must emphasis that you need
to keep the overall objective of "What Problem am I solving
for the Client" in front of you. If you fulfill this
objective the rest will fill in.
Financing: You have finished the business plan and now will
decide if you need financing to start your business. How
much do you need? Most of the clients that I see can
actually finance their business with a credit card. They
need a financial record of 650 or better to get a card and
probably can use the card for up to $10, 000.00 financing.
Perhaps you can provide money from your savings or take in
a financial partner.
If you require more money to finance your business, prepare
for battle. The banks are tough and you are competing for
time with people who will be doing much larger business
with the bank. This is what you will need: A polished
business plan A list of start-up costs Past three year
personal tax returns. A statement of personal histories
Credit reports from Equifax (1-800-658-1111), Experian
(1-800-682-7654) and Tran Union(1-316-636-6100)
Be prepared to answer all questions on your finances and
needs. Be prepared to show that you are conservative in
your plan. Seek out used or rental equipment or other
innovative techniques to save money. You should remember
that the banker is usually interested in helping start a
small business if they have a stong plan and collateral.
You have to be prepared because his or her time is limited.
Further Steps for Success: Hopefully, you will make it
through these hurdles and be ready to open your business.
You are to be congratulated because this is a great
accomplishment. You are your own boss and in charge of your
future. Do not celebrate too much for now, though, as you
still have to hire employees, choose the technology you
require for running your business and wade through many
other details. May it be rewarding and profitable.
----------------------------------------------------
I have a BS and MS in Metallurgical Engineering. Thirty six
years spent in the development of semiconductors. Business
experience in start up business plan. Currently, an oyster
farmer and interested in helping the environment by
deploying solar energy. Visit my Blog,
http://environmentalhelp.typepad.com/ for continued
information on renewable energy
E Mail: p_calhoun@bellsouth.net
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