As you evaluate starting a small business, there are several things to consider. First on the list is to ensure you understand why you want to own your own business.
Whether your potential business provides services or products, it will be important to recognize your motivations. Is it for freedom, money, to use your creativity, or as we discussed last week, is it because of your desire to use your past experiences for your own future and/or the future of your family, especially for older adults?
Before you begin to write a business plan, conduct a thorough analysis of the industry you are considering. Investigate who will buy your products or services, who the competitors are and how realistic is the likelihood of your success.
The next step is to develop a business plan, and ensure you have a unique selling proposition.
A unique selling proposition is simply a written statement of what sets your business apart from your competitor’s.
The best example is probably FedEx, which started its business with “When your package absolutely, positively has to get there overnight.” That unique selling proposition was new and bold, and it worked.
To help develop a viable business plan, there are many resources available through the Small Business Administration, SCORE (Service Corps of Retired Executives), the Department of Commerce, and a Spanish-language Web portal at GobiernoUSA.gov.
Avoid the many boilerplate business plans available on the Internet for a fee because any potential investor or bank will want to know that you wrote the plan.
At a minimum, a viable business plan should include:
• Executive summary. An executive summary is simply a short synopsis of everything the plan will cover in greater detail in the remainder of the document. It needs to include your goals, your funding sources, the market opportunity, a mission statement, an overview of management, your competition, your financial projections and your unique selling proposition.
• Business overview. This section outlines more information about your business — why it is being formed, its mission, the business model and your strategy.
• Unique selling proposition. This section restates your unique selling proposition and discusses it in more detail. It must include how you are going to offer your services or products.
• Market and analysis. This section discusses the strategies for marketing, sales, advertising and public relations. Include as much market research as you can.
• Strategy and implementation. This is where you fill in the detail of your business operations. It should include target goals with specific dates. It must include measurable outcomes and milestones.
• Management team. A good business plan must include the background and expertise of key players in the new business. Even if it is a one-person business, your specific background and expertise must be spelled out.
• Financial projections. This is where you address your projected profit and loss, your balance sheet and, most importantly to most investors, your cash flow for at least the first three years.
There are also government programs specifically designed for underserved or disadvantaged groups and for minorities to start a business.
Specific help is available for minorities, veterans, home-based businesses, women-owned businesses, online businesses, self-employment and environmentally friendly, or green, businesses.
It will be important to determine the best legal setup and form of ownership for your business. You will have to decide if it will be sole proprietorship, a partnership, an LLC (Limited Liability Company), a corporation, an S corporation or a nonprofit 501(c)(3).
Obtaining adequate financing is the largest hurdle for most new businesses. Your business plan will require you to determine your startup capital needs and, depending on your business model, your operating capital needs.
Armed with a clear understanding of what it takes to start a business and the resources that are available to help, it may be time to consider using your past experiences and expertise to start your own business for yourself and/or for your family.
Ron Campbell has worked extensively in the job preparation and job search industry. He can be reached at 801-386-1111 or campbellrv@gmail.com.
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