Who have not been thinking to start own business? However many of them have always wanted but never do. The reason simply is that they have been overwhelmed by all the process, and have not been sure about what could be involved. Here are 75 tips, tricks and inside info you may eager to find out.
With a to-do list that includes everything from writing a business plan to coming up with a name to hiring employees, startup can seem daunting. But don't worry--we've simplified the process by going straight to the experts to find out their top 75 tops for startup succss, so you can master the process step by step. Your first step: Start reading.
Got a (Business) Plan?
A solid plan can help you start off strong and stay that way.
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A business plan will serve as your guide to decision making during the life of your business, starting with the question of whether to start in the first place. The second use of a plan is to satisfy lenders and investors, virtually all of whom will require a written business plan before approving a loan or making an equity investment. Plans also serve as a means of communicating with potential partners, allies, vendors, employees and even customers.
1. Before putting pen to paper, research resources and tools that can help. In addition to books, software programs can automate the task. You can get live help from your local SBA office or Small Business Development Center, college and university classes, and private courses or conferences. You probably shouldn't plan to farm the entire job out to a consultant, however: "Good consultants run anywhere from $300 an hour down, and generally the quality of the services is commensurate with the fee," says Pinson, adding that having a consultant craft a good plan will run you $5,000 to $10,000.
2. Back up your concepts with numbers. Keep in mind, a business plan is both qualitative and quantitative. "A business plan is not just writing about what your vision of your business is," Pinson says. "It's interpreting it in financial terms that you can measure." That means you'll need some numbers--as precise and accurate as possible--in addition to verbal descriptions of your plans.
Start by writing the conceptual part, then move to the financial part. "Interpret those concepts in terms of dollars," says Pinson. For instance, starting with an idea of how frequently you'll advertise, how large the ad will be and where it will run, you can find out how much it costs. This will give you a number to plug in for advertising costs. Says Pinson, "The conceptual or text part of your plan has no validity without the financial part."
3. Be realistic when making projections. "One of the most frequent errors made when writing a business plan is over-estimating revenue and under-estimating expenses," Pinson says. Improve revenue estimates by narrowing your target market down to a realistic niche, then interpret revenue and expenses in terms of that market, Pinson advises. Start by identifying potential customers, then slice off those who aren't ready to buy, can't be marketed to effectively, can't afford your solution or don't consider it a need.
4. At minimum, include monthly cash-flow projections for the first year. "Cash flow is the critical issue," Pinson says. Also prepare an overall projection of profit and loss for three years, as well as a projected balance sheet. Calculate the break-even point at which sales will cover costs. Research financial ratios specific to your industry, and look at published industry-specific ratios to make sure your assumptions are realistic. Says Pinson, "If grocers make a one-half-percent profit and you're [projecting your] grocery store [will have] a 28 percent profit, you'd probably better rethink your projections."
5. Pay special attention to marketing. First, develop goals. Second, do a market analysis, including identifying target markets, researching competition and assessing market trends. Then prepare a marketing strategy, including your approaches to sales, promotions, advertising, PR, networking, community building, customer service and other marketing channels and tools. Develop a plan to implement that marketing strategy, and include benchmarks to see if what you planned actually happened.
