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Starting A Small Business...compiled by george d. self employed since 1990

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I'm convinced that choosing a business is more of an art form than it is a science. We pride ourselves in making all our decisions "strictly by the numbers", and this is wrong. Numbers only tell us to do things that are safe and to do things the same way they have worked in the past. A fast changing world requires implementing ideas that are new, those that have never worked before. But new ideas don't happen because of the numbers, they happen because an entrepreneur loves the idea and has passion for the process of seeing it fulfilled.

I'm not advocating that you throw away your calculator when you are making any decision. What I'm suggesting is that there is a time and place for calculator and you have to know when not to use it. Did you use a calculator when you picked a mate? No. You trusted your gut, your heart and all that other neat stuff. It's that kind of decision making that you need to depend on when choosing a business opportunity. Like selecting a mate, choosing a business, should be a very personal decision. Afterall, you may wind up spending the rest of your life with this business. If your business isn't right for you, you will want to leave it some day even if it is making money.

Many people use "staying in the business because of the money" they same way some couples "stick it out because of the children". The best of both worlds is making the money and loving your business.

Using your gut will greatly increase your chance of financial and personal success. If you choose a business you really have a passion for something magical happens. Your business is no longer work, it becomes an art and you become the artist. You think about your business all the time -- not just 8 hours a day like your competitors who are trapped in business they don't enjoy. And you'll eventually do it better than anyone else because it is your art. You're having fun working on the problems of the day while your competitors can't wait to get out of the office.

Your chance of success skyrockets because you won't be easily discouraged. Look around at the people who run businesses in our country.

You can see that it doesn't take a genius to run a company.
Just think back to all the idiots you've worked for in the past.
Perseverance, not intelligence, is the key.
If you love what you're doing, you won't give up at the first economic downturn and try to find something more profitable.
You'll stay and learn how to make money even then the economy sours.
Eventually, you'll become better at what you do than anyone else.

Judging your success by the numbers can also be a trap in judging your happiness. Someday you will achieve those numbers and then what? Success by the numbers is fleeting because once you reach one number you are at that point in time only for a moment before you have to choose another number as a goal. But if your goal is doing exactly what your want to be doing with your life then you are happy each and every day and not only on the day you reach your number.

I had a vision once of Picasso being a numbers man and waking up one day saying......"Today, I better paint five eagles and seven elephants." Or saying...."Maybe I should give up painting and become a stockbroker. There's more money in being a stockbroker than being a struggling artist." No, he never did this. Picasso had to paint what was inside of him, no matter what the numbers told him. This was true before and after his success.

I believe that we're all Picassos at something. I believe that there is something inside all of us that is our art form. The problem is discovering it before our life runs out. Real artists are lucky. Dancers, singers, painters, they all have an easily definable talent that everybody knows is art. But what about the rest of us, whose art is not so obvious. Why can't we find a business that gives us that same feeling as painting gave to Picasso? If you do figure it out, the chance of your success will increase greatly.

Maybe your art is shining shoes, maybe it's making people happy when they travel, or maybe it's even being a lawyer. Now, God knows this country doesn't need just another lawyer.But it always needs another lawyer who has the same passion for the law as Picasso had for his art. And it will need another whatever you want to be, if you truly have the passion for being it.

Steps for Choosing a Business

First start with your gut. Clear out the mind and try to explore your true loves. Open your mind to new ideas and opportunities. Ask yourself questions like:

1) What is my fantasy business?
2) What would I do even if I didn't get paid for it?
3) What people do I really admire in the world and why?Next take out your calculator and start exploring all your ideas.
Follow all your ideas even the dumb ones and see where they lead to.
Do the research, study the options.
Remember all the information you need to find out about any business is out there.

End with your gut. The final decision can be difficult. If you did enough research you probably came up with more than one potentially good idea. But be sure to make the final decision with your gut. You are the one who has to be happy with this decision. And when you are, you will work like hell to make that business a success. This is the only way you have a chance of being your own hero and winding up on someone else's list of people they admire most.


20 Ways To Look Big

  1. BE SLY Businesses are frequently solicited for information for industry directories. Although it's a good idea to be listed in them and to join professional associations.
  2. RIDE ON BIG COATTAILS "You don't want it to seem as if you're just renting a tiny office someplace, however, so rent a place in large firm."
  3. HEADQUARTERS? PARK AVENUE A mailing address in a residential area may deliver the wrong impression to clients. Shop around for an address that suits your companies image:
  4. LOOK FABULOUS If you want to be taken seriously, make it a point to dress like others in your profession.
  8. BE FLUID Don't back yourself in a corner by over specializing
  9. Form Loose Relationships Don't risk having to turn down a job because you don't have the staff to support the work.
  10. Go Public
  11. Do Lunch
  12. Invest In A Brochure
  13. Get A Business Telephone Line
  14. Get A Dedicated Fax Line
  15. Dial 1-800
  16. Possess The Technology
  17. Hire For Free Use college students or interns
  18. Create An Instant Research Staff
  19. Play Your Cards Right
  20. Don't Ask Don't Tell

Special Note: Create press releases that inform clients about what's going on in your industry-not just your business. This will establish you as an authority.



Business Location

For most new businesses, where to locate should be an early consideration. Where you locate will depend on your type of business as well as who and where your customers are. Retail stores and restaurants (where location, location, and location have been called the three most critical factors for success) have to be located very near to their customers, but other types of business may have more flexibility in choosing a location.

For service businesses, such as exterminators and carpet cleaners, who perform their services at the client's place of business or home, the location of their facility isn't that important. They, along with mail order businesses and other businesses whose customers don't visit their facilities, can be very flexible in choosing a location.

Manufacturers, on the other hand, may need to locate close to suppliers or customers and have to consider transportation, labor, power, taxes, and regulations before they choose a location.

The first thing to consider is whether where you intend to locate is right for your type of business. A business that is successful in one community, may not be successful in another, particularly if the two communities are fairly dissimilar. A store selling only beach supplies might work well in Los Angeles or Miami, but probably not in Cleveland or Pittsburgh.

But assuming the population trends, purchasing power, competitive situation, and potential of the community are all favorable, then the next thing you'll want to look at are specific areas within the community you've chosen.

Retail stores will generally want to locate near their clientele. How near depends on the frequency of a customer's visits, which is a function of the type of merchandise being sold:

Convenience goods that are widely available, like candy and milk, have to be located very close to customers and very easy to get to. Corner locations are generally best because of their visibility to traffic going in both directions. Unless there is heavy foot traffic, adequate parking has to be provided, which is why "strip shopping centers" are often desirable locations.

Shopping goods, like clothes, cars, and furniture, should be convenient to the specific consumers of that particular merchandise. The best sites are located within a large concentration of the target market. Often these stores will cluster in areas that buyers will travel to when looking for a particular item.

Specialty goods are high-priced items, such as fine jewelry, expensive perfume, exclusive designer clothing, and similar merchandise. They don't have to be as close to their customers as other retailers, but they do have to be located in an area compatible with what they're selling. Luxury stores tend to congregate in upscale shopping districts like Rodeo Drive in Beverly Hills or Fifth Avenue in New York City.

Service businesses operating out of storefronts, like dry cleaners and shoe repair shops, depend on foot or drive-by traffic and have to be located where their customers are going to pass them on a regular basis. Other personal service businesses which are visited less frequently, like beauty parlors and barbershops, can cultivate a base of steady clients who are more willing to go out of their way. Many retailers and service businesses will want to locate near a large department store or mall that attracts large numbers of shoppers.

Besides customer proximity, the area you select will be affected by the cost of rents in that area and the compatibility of the area's prestige with your product or service. You'll also want to take zoning laws and local regulations into consideration before choosing the specific area for locating your business.

Non-residential Business Site

Once you've settled on the geographic area, the next step is to choose the specific location. Here are the major considerations that go into choosing a business site:

Personal convenience. If the location is too far from your residence, you're going to spend a lot of time commuting.

Customer proximity. If your business needs to be geographically close to its customers, then locate where the bulk of the customers are. And remember that the more often your customers need to visit you, the closer you should be to them.

Supplier proximity. If certain raw materials or supplies are crucial to your business, you may need to locate close to your sources of supply in order to reduce freight costs and delivery times.

Competitor proximity. Some types of business, like women's clothing shops and auto dealerships, tend to locate in clusters because customers like to shop extensively before purchasing, and so these businesses draw customers to each other.

Other types of business, like convenience stores or dry cleaners for example, should not locate near competitors since they will take business away from each other as customers patronize one shop or the other.

Physical suitability of the building. Find a building or space appropriate for your kind of business; one that is already, or could easily become, just what you need to be successful.

Type and cost of lease. How much the rent is and how long of a lease term you can get are important factors, as well as what options you can get in the leasing agreement (see discussion of leases below).

Possibilities for expansion. Growth is virtually always a part of business success. Can this location accommodate your business's needs for space to accommodate additional employees, supplies, and inventory as it grows?

Transportation and parking. For the convenience of both customers and employees, the availability of accessible roadways, public transportation, and ample parking is an important factor to consider.

Availability of qualified employees. As your business grows, it becomes increasingly important to have a pool of qualified potential employees.

Use the "Facility Planner" below to determine the requirements for your business location and the "Site Selection Worksheet" at the end of this section to help you evaluate your options and choose the right location for your business.

Facility Planner

By answering the questions below, you can determine the requirements for your ideal business location:

1.) What kind of facility does your business need?
Home Office Store
Factory Warehouse Other

2.) Do you intend to lease or purchase your business facility?

3.) How much are you willing to pay per month?

4.) How many square feet do you need?

5.) Do you need additional space for future growth? How much?

6.) What special requirements does your business have?
Electrical Plumbing
Heating Air Conditioning
Ventilation Refrigeration
Water Storage
Access Other

7.) Rank the following (from 1 to 5) in terms of their importance to your business:
____ Customer convenience
____ Supplier proximity
____ Employee proximity
____ Competitor proximity
____ Personal preference

8.) Where could you locate your business to satisfy the two most important considerations above?


Since most business locations are leased, there's a good chance you'll sign a lease agreement some day. A lease is a binding, legal agreement between the landlord (the lessor) and the tenant (the lessee). It spells out the rights and obligations of each party.

Since the lessee is obligated to pay the full amount of the monthly payments for the entire term of the lease, signing a lease is a serious financial transaction. As with any contract, have an attorney review the lease agreement before you sign it.

Here are some of the major considerations that should be resolved to your satisfaction before signing a lease:

Rent. How much is the rent payment? How does this compare to other sites in this area and with that of other firms like yours? Which of the following methods will be used to determine your monthly payment:

(1) Flat monthly payment
(2) A set percentage of your gross sales, 5% for example.
(3) Sliding percentage of your gross sales, where the percentage varies at different sales volumes
(4) Some combination of a minimum payment and a percentage of your gross sales.

Term. What is the total lease term? What renewal provisions does the tenant have? If you're just starting your business, it's best to get a short-term lease with a long-term renewal option, e.g. a two year lease with an option to renew for eight years. Do you have the option to obtain additional space in the building at the same rental rate?

Improvements. Who is responsible for painting, remodeling and other initial improvements? Who owns the improvements you make? Often a tenant can reduce the monthly rent payment by agreeing to make some improvements on the property. Extensive landlord improvements usually mean higher rents.

Insurance. What insurance does the landlord hold? What insurance coverage are you required to have? The landlord should at least have coverage for any accidents occurring in the common areas, while the tenant may be required to have insurance covering accidents and fire damage occurring in the leased area.

Sublet. Does you have the right to sublease all or part of your space to another party? This is a valuable right for a tenant to have. If you find out you've leased too much space, it helps to be able to sublet the part you're not using. And if you have to leave that location before the lease is up, subletting allows you to bring in a new tenant to finish out your lease.

Restrictions. Are there any restrictions on the use the property? There shouldn't be any restrictions against using the leased property for any legitimate business purpose. Many leases prohibit anyone living on the property and some prohibit certain businesses that create excessive noise, smells, or other disturbances.

Termination. Does either party have the right to terminate the lease? Under what conditions? Leases generally aren't terminated, except under extraordinary circumstances, such as gross non-compliance with lease provisions or criminal activity. Many leases contain a provision that instead of terminating the lease in the event of a dispute, one of the parties may bring the case to arbitration, with the losing party paying the costs.

Operating Your Business from Home

Operating a business from home has become an increasingly popular trend among new business owners. At one time there was a stigma attached to homebased businesses, but now they are widely accepted, and often envied. Currently, there are nearly twenty million full- or part-time homebased businesses operating across the nation.

Because homebased businesses have become so popular, let's look at some of the advantages they offer:

Lower start-up costs. There are no moving expenses, and the extent of renovations is completely up to you.

Lower overhead. Only your regular rent or mortgage payment is due every month, and you're already accustomed to handling that.

Tax benefits. Homebased business owners can receive tax deductions for the portion of their homes used exclusively for the business (see Taxes in Finance).

Lifestyle flexibility. You can dress as you please, work according to your own schedule, and even take care of your children while you work.

There are also disadvantages to homebased businesses, here are some of them:

Isolation. Because you're off in your own isolated world you may miss opportunities, your view of what's happening may become limited, and you may begin to feel like it's you against the world.

Space limitations. As time goes by, the business may start to overflow into the living areas of your home, and if the business takes off very quickly, there may be no room at all for expansion.

Zoning laws. In some areas the zoning laws are very strict and prohibit certain businesses (and in some cases, any business) from operating out of a residence.

Security concerns. The office equipment and inventory you have on hand may attract thieves.

Household interference. The possible resentment of family members, distractions, and interruptions can all make working at home difficult.

The main question about working from home is self-discipline. Can you be diligent enough to stick to your work while avoiding distractions from children, television, and personal telephone calls? If so, and provided the advantages outweigh the disadvantages, then a homebased business may be for you.

How To Select Office Space

If your company's plans include the lease or purchase of a business site, consider the services of a commercial real estate broker as your first step. "We save them time and money because they can continue to work, and we do the business of real estate."That business includes analyzing your company's market, prospective site history, alternatives, requirements-and negotiating the deal. Further, if you think all commercial brokers are alike, think again. They specialize--, in offices, investments, retail properties, multi-family apartments, and so on.

Referrals are a common way to find a commercial broker: Ask someone in your type of business, or an attorney or certified public accountant. Keep in mind, too, that brokers' expertise is shown in their professional designations. CCIM (certified commercial investment member of the Commercial Investment Real Estate Institute, a division of the National Association of Realtors), SIOR (Society of INdustrial and Office Park Realtors) or CPM (certified property manager) are considered within the industry as advanced credentials. Interview at least three brokers. Ask them about their credentials, their memberships in local boards of Realtors, how many years they've been in the business, and the nature and extent of their deals, and the nature and extent of their deals.

The following indicate how questions in three key areas can narrow the search for a site:

Location. Where are your clients based? What area are your employees drawn from? Are you looking to retain existing employees, or recruit new ones? What kind of image is required? Is a downtown address more prestigious for your type of business than one in the suburbs?

Size. Are there standards in your industry for an executive office? Consider hiring a space planner or architect to help determine space needs. The rule of thumb for an office site is 150 to 200 square feet per person. Add the square footage for each executive's office; allow another 15 to 20 percent of that total for hallways and circulation; add the two amounts for your usable square footage. To that total, add up to another 20 percent for what she termed the building's add-on factors- the common areas- to determine the actual leased square footage. On the other hand, there's a trend toward "hoteling" of office space in certain businesses. For instance, three salespeople that are in the office on different days can share the same desk.

Lease vs. purchase. In general, leasing offers more flexibility for expansion, expansion,while purchasing offers equity.

Find out the history of the property. Who owns it? Is it financially stable? Is there a chance it will go to foreclosure? How credit worthy are the tenants? Is there major roadwork planned that could affect customer access, or business overall?



How To Develop Advertising And Marketing Programs

Marketing and advertising are among the most misunderstood tools small business owners can use to increase profitability. The key, say the experts, is knowing the basics about your business and doing homework about what approach will work best for you. first, know the difference between marketing and advertising. "Marketing is everything a company does to generate revenue," says Rod Carlson, vice president and director of marketing for Taglarino Advertising Group. This includes hiring, training, managing, motivating and rewarding your sales staff; pricing, packaging, analysis o the competition, promotional activity and advertising.

Advertising is communicating your product or service to people in a mass way, via newspapers, television, radio, cable, brochures, videos and direct mail. Generally, businesses work with advertising agencies, who design and produce paid advertisements place them in the media and create sales and promotional programs and videos. Public relations firms create and design campaigns to market the image of the company, often in an editorial, non advertising setting. "You've got to tell somebody you exist, what the product is and the value of it," says Bill Levy, associate director of the small business center at Florida Atlantic University. "Without reaching the market, what good is it?"

Second, define what your market is and be clear about your business objectives: Know what you want to achieve, who your customers are and which are your best ones, where they live, what they buy, and what is your broader potential. "These are all the things (business owners) need to know to see if the agency's recommendations make sense," Carlson says. "You just can't go to any agency and say, "Make it better." Other ways to market your business include printing up flyers and distributing them in the neighborhood, attending chamber of commerce activities and networking with others, or promoting and training your sales staff.

Most business owners should be aware of whom they are selling to, Levy says. That information could be grouped by age, sex, specialty interest, or geography. Florida Atlantic University and the small business development center at Florida International University offer counseling on how to analyze the data so owners can better target their markets.

Third, find an agency that will best suit your needs. Carlson recommends researching companies you admire and that are similar to your own. "Call that company and say, "I've been impressed by what you've done. Can I get the name of your agency?" Interview the agency you are thinking of hiring. "Be alert as to the questions asked of you about how your company is making money," Carlson says. These questions include: How much money do you make from each sale, what's your margin, everything having to do with a thorough sales analysis, where the products are sold.

Fourth, figure out right away how much money you have to spend. Start by determining fixed costs such as wages, rent and insurance. The markup rate helps determine budget flexibility. Typically, companies spend 3 to 10 percent of their revenues on marketing and advertising. Agencies normally charge $50 to $200 per hour, Carlson says. "Small business owners think erroneously that agencies are too expensive," says Robert Parents, president of the Advertising Federation of Greater
Miami. "Some don't even think about it. They do these beautiful business plans and hire a sales force. But that's only half the battle."

Recognize that all decisions are business decisions:
 Ask yourself if advertising will generate more revenue than it will cost, not necessarily in the next week, but in the next year or two.

 Don't let your ego get in the way. "You can't make a bad idea into a good one, and you can't make a bad business concept into a good one," Carlson says.

 Don't be seduced by paper promises. Cable may look inexpensive, but is the program going to hit your market? For example, you sell trendy sportswear for women aged 18-40 in a Plantation strip mall. Will advertising on that Lifetime show you enjoy watching, which appeals to women over 65, reach your customer base?

Similarly, is the enticing rate for advertising in a daily newspaper that covers four counties worth it? The reach could be too broad for your purposes. "As a small business owner, you are dedicated to asking a lot of tough questions both of yourself and the agency you are going to hire," Carlson concludes




How Do You Buy Property and Casualty Insurance? Risk management and commercial (business) insurance for the small business owner is frequently a subject of confusion.

Questions typically asked include:
Why do I need insurance?
How much and what type of insurance do I need?
How much is my business really worth in case of a disaster?
Where do I get proper counseling on the types of policies available, and how do I choose my insurance agent?

The small business person should address these issues prior to committing resources to an insurance portfolio.

Why do I need insurance? In order to determine the need for commercial insurance (property and casualty), it is first necessary to understand what insurance is! Insurance is the transfer of risk (loss) from the business owner to a second party in the event that the business person is faced with the absolute possibility of loss due to: fire, windstorms, floods, death of a key person, sickness of an owner, liability judgments or other such perils. Property and casualty insurance (relative to policy limits) reduces the amount of risk and financial exposure the small business person faces in times of crises.

What type of insurance do I need? Regardless of the nature of your business, a commercial (business) insurance policy is composed of two parts:
Property insurance and casualty insurance.-Property Insurance covers loss on inventory, plant and equipment, and includes loss of business or future business due
to some catastrophic circumstance.-

Casualty Insurance is the section of the policy that protects the business person from liability in the event of bodily injury to employees, customers, key personnel, or others while on the employer's premises.

Casualty coverage in commercial insurance policies usually provides legal representation against lawsuits initiated by an injured party. Worker's compensation and fidelity bond policies fall under casualty coverage.Specialty policies cover a wide assortment of unique circumstances as they relate to the business and can be purchased by the business enterprise as needed. Insurance plans and policies can be obtained for the benefit of business owners, partners, stockholders, their families and heirs. Also, insurance policy proceeds can provide employees of the business with health and medical plans, retirement plans, and other benefit packages that can influence loyalty to the employer.

How do I choose my insurance agency? My agent? Insurance is sold by a number of different agencies, brokers, sales representatives, and independent agents who are licensed to sell insurance products in your particular geographic area. An independent agent has access to many resources and can provide a diversity of property and casualty coverage. By dealing directly with a carrier (insuring company), the small business person can sometimes acquire a basic policy, but it is unlikely that this policy will provide absolute protection against all possible risks and/or losses.

In selecting between a carrier and an independent agent, choose an agency and an agent that knows and understands your business.

This advice applies regardless of the nature of your business.
An agent who understands your business is much more capable of writing insurance policies that will provide you with maximum coverage at the most reasonable premium cost. Most insurance policies have limits on coverage in the primary property and casualty policy. Therefore, depending on the size, number of employees, and nature of a business, it is often necessary to acquire "umbrella" policies for additional risk coverage.

An independent agent can discuss different products and services and recommend the right coverage to help the small business person avoid financial loss. A professional insurance broker will defer the worry and risk of doing business from the owner of the business to another party by providing expert knowledge, counseling, and understanding of business operations to the client. By obtaining sufficient insurance, in both quantity and quality, the small business person will receive peace of mind and maximum comfort in the operation of the business enterprise.

In looking for commercial insurance for your business, also consult with your accountant, attorney, or other business people that you trust.Sometimes it can be difficult for a new business to get insurance coverage because the owner has no record of performance in the business. The independent agent or broker can counsel and direct you toward the acquisition of adequate insurance coverage. For most business insurance, the carrier will conduct annual audits on their clients' businesses because premium costs are predicated on annual dollar volume of business, number of employees, workers' hours, and other criteria that will affect risk exposure to the insurance company.

Insurance should be treated as any other major consideration when starting a new business. Be sure that your policies protect you and your co-owners (if any), your heirs and your key personnel.

Property and casualty insurance is designed to protect and defend the small business enterprise against unforeseen disasters and losses. In selecting an insurance carrier find a local agent who understands the nature of your business, can satisfy your
insurance needs and provide you with the protection you deserve.



Do You Need A Payroll Service?

The good news is that your company is growing. The bad news is that processing your expanding payroll is taking you away from what you need to be doing -- running the business!

Any business that has employees must deal with the time-consuming job of preparing the company's payroll and tax returns.

If your payroll is small, you may be able to handle it yourself. But as your business grows, payroll can quickly become a burden. One solution is to hire a professional payroll processing firm.

There is no "magic formula" that determines how big a company should be before hiring a payroll service. To find out if an outside service makes sense for you, start by answering the following questions:

What is the true cost of preparing your payroll, issuing employee paychecks and reconciling your business checking account?

How much do you spend to deposit your payroll taxes, prepare and file your quarterly/annual payroll tax returns and issue W-2s?

What is the cost of your time that could be spent running the business?

Once you've answered these questions and determined the cost of your "in-house" payroll processing, find out how much you could save by going "outside."

Advantages of a Service

The primary benefit offered by a payroll service is expertise. Payroll processing is their business; they do it efficiently, accurately and in a timely and cost-effective manner. A service may also:

Supply comprehensive reports to help you control payroll expenses.

Provide you with a choice of payment options (e.g., official bank checks, direct deposits).

Offer tax services that eliminate manual calculation and preparation of payroll tax deposits and returns.

Wells Fargo Business Payroll Services

Wells Fargo offers two flexible payroll plans designed expressly for small business.

ExpressPay is for companies with up to 25 employees and offers many special services typically available only to larger firms.

ExpressPay Plus is geared toward businesses which employ up to 100 people and have more complex payroll processing needs and reporting requirements.



INTRODUCTION Owning a business is the dream of many Americans starting that business converts your dream into reality. But, there is a gap between your dream and reality that can only be filled with careful planning.

As a business owner, you will need a plan to avoid pitfalls, to achieve your goals and to build a profitable business.Operating a successful small business will depend on:- a practical plan with a solid foundation;- dedication and willingness to sacrifice to reach your goal;- technical skills; and,- basic knowledge of management, finance, record keeping- and market analyses.As a new owner, you will need to master these skills and techniques if your business is to be successful.

IDENTIFY YOUR REASONS As a first, and often overlooked step, ask yourself why you want to own your own business. Check each of the reasons that apply to you.

1. Freedom from the 9-5 daily work routine.
2. Being your own boss.
3. Doing what you want when you want to do it.
4. Improving your standard of living.
5. You are bored with your present job.
6. You have a product or service for which you feel there is a demand.Some reasons are better than others, none are wrong; however,be aware that there are tradeoffs. For example, you can escape the 9-5 daily routine, but you may replace it with a 6 AM to10 PM routine.

A SELF ANALYSIS Going into business requires certain personal characteristics. This portion of the checklist deals with you--the individual.These questions require serious thought. Try to he objective. Remember, it is your future that is at stake.Personal Characteristics

1. Are you a leader?
2. Do you like to make your own decisions?
3. Do others turn to you for help in making decisions?
4. Do you enjoy competition?
5. Do you have will power and self discipline?
6. Do you plan ahead?
7. Do you like people?
8. Do you get along well with others?

Personal Conditions This next group of questions, though brief, is vitally important to the success of your plan. It covers the physical,emotional and financial strains you will encounter in starting new business.

1. Are you aware that running your own business may require working 12-16 hours a day, six days a week, and maybe even Sundays and holidays?2. Do you have the physical stamina to handle the work load and schedule?
3. Do you have the emotional strength to withstand the strain?
4. Are you prepared.if needed to temporarily lower your standard of living until your business is firmly established?
5. Is your family prepared to go along with the strains they, too, must bear?
6. Are you prepared to lose your savings?

PERSONAL SKILLS AND EXPERIENCE Certain skills and experience are critical to the success of business. Since it is unlikely that you possess all the skills and experience needed, you'll need to hire personnel to supply those you lack. There are some basic and special skills you will need for your particular business.By answering the following questions, you can identify the skills you possess and those you lack (your strengths and weaknesses).

1. Do you know what basic skills you will need in order to have a successful business?
2. Do you possess those skills?
3. When hiring personnel, will you be able to determine if the applicants' skills meet the requirements for the positions you are filling?
4. Have you ever worked in a managerial or supervisory capacity?
5. Have you ever worked in a business similar to the one you want to start?
6. Have you had any business training in school?
7. If you discover you don't have the basic skills needed for your business, will you be willing to delay your plans until you've acquired the necessary skills?


Small businesses range in size from a manufacturer with many employees and millions of dollars in equipment to the lone window washer with a bucket and a sponge. Obviously, the knowledge and skills required for these two extremes are far apart, but, for success, they have one thing in common -each has found a business niche and is filling it.The most crucial problems you will face in your early planning will be to find your niche and determine the feasibility of your idea. "Get into the right business at the right time" is very good advice but following that advice may he difficult.Many entrepreneurs plunge into a business venture so blinded by the dream that they fail to thoroughly evaluate its potential. Before you invest time, effort and money, the following exercise will help you separate sound ideas from those bearing a high potential for failure.


1. Identify and briefly describe the business you plan to start.
2. Identify the product or service you plan to sell.
3. Does your product or service satisfy an unfilled need?
4. Will your product or service serve an existing market in which demand exceeds supply?
5. Will your product or service be competitive based on its quality, selection, price or location? Answering yes to any of these questions means you are on the right track; a negative answer means the road ahead could be rough.


For a small business to be successful, the owner must know the market. To learn the market, you must analyze it, a process that takes time and effort. You don't have to be a trained statistician to analyze the market place nor does the analysis have to be costly.Analyzing the market is a way to gather facts about potential customers and to determine the demand for your product or service. The more information you gather, the greater your chances of capturing a segment of the market. Know the market before investing your time and money in any business venture.These questions will help you collect the information necessary to analyze your market and determine if your product or service will sell.

1. Do you know who your customers will be?
2. Do you understand their needs and desires?
3. Do you know where they live?
4. Will you be offering the kind of products or services that they will buy?
5. Will your prices be competitive in quality and value?
6. Will your promotional program be effective?
7. Do you understand how your business compares with your competitors?
8. Will your business he conveniently located for the people you plan to serve?
9. Will there he adequate parking facilities for the people you plan to serve?This brief exercise will give you a good idea of the kind of market planning you need to do. An answer of "no" indicates a weakness in your plan so do your research until you can answer each question with a "yes.

"PLANNING YOUR START-UP So far, this checklist has helped you identify questions and problems you will face converting your idea into reality, and determining if your idea is feasible. Through self analysis you have learned of your personal qualifications and deficiencies and through market analysis you have learned if there is a demand for your product or service.The following questions are grouped according to function.They are designed to help you prepare for "Opening Day."Name and Legal Structure

1. Have you chosen a name for your business?
2. Have you chosen to operate as a sole proprietorship, partnership or corporation?Your Business and the Law, A person in business is not expected to be a lawyer, but each business owner should have a basic knowledge of laws affecting the business. Here are some of the legal matters you should be acquainted with:1. Do you know which licenses and permits you may need to operate your business?
2. Do you know the business laws you will have to obey?
3. Do you have a lawyer who can advise you and help you with legal papers?
4. Are you aware of:-- Occupational Safety and Health (OSHA) requirements?-- Regulations covering hazardous material?-- Federal Tax Code provisions pertaining to small business?-- Federal regulations on withholding taxes Social Security?-- State Workmen's Compensation laws? Protecting Your Business It is becoming increasingly important that attention be given to security and insurance protection for your business.There are several areas that should be covered. Have you examined the following categories of risk protection? Fire, theft, robbery, vandalism, accident, liability. Discuss the types of coverage you will need and make a careful comparison of the rates and coverage with several insurance agents before making a final decision.

Business Premises and Location

1. Have you found a suitable building in a location convenient for your customers
2. Can the building be modified for your needs at a reasonable cost?
3, Have you considered renting or leasing with an option to buy?
4. Will you have a lawyer check the zoning regulations and lease?


1. Have you decided what items you will sell or produce, or what service(s) you will provide?
2. Have you made a Merchandise Plan based upon estimated sales, to determine the amount of inventory you will need to control purchases?
3. Have you found reliable suppliers who will assist in the start-up?
4. Have you compared the prices, quality and credit terms of suppliers?

Business Records

1. Are you prepared to maintain complete records of sales, income and expenses, accounts payable and receivables?
2. Have you determined how to handle payroll records, tax reports and payments?
3. Do you know what financial reports should be prepared and how to prepare them

FINANCES A large number of small businesses fail each year. There are a number of reasons for these failures, but one of the main reasons is insufficient funds. Too many entrepreneurs try to start-up and operate a business without sufficient capital(money). To avoid this dilemma, you can review your situation by analyzing these three questions

1. How much money do you have?
2. How much money will you need to start your business?
3. How much money will you need to stay in business?

CONCLUSION Beyond a doubt, preparing an adequate business plan is the most important step in starting a new business. A comprehensive business plan will be your guide to managing a successful business. The business plan is paramount to your success. It must contain all the pertinent information about your business; it must be well written, factual, and organized in a logical sequence. Moreover, it should not contain any statements that cannot be supported.

If you have carefully answered all the questions on this checklist and completed all the worksheets, you have seriously thought about your goal. But...there may be some things you may feel you need to know more about. Owning and running a business is a continuous learning process. Research your idea and do as much as you can yourself, but don't hesitate to seek help from people who can tell you what you need to know.