Starting a business takes motivation, desire, and talent. It also takes research and planning. Like a chess game, success in small business starts with decisive and correct opening moves. Although initial mistakes are not fatal. It takes skill, discipline, and hard work to regain the advantage. To increase your chance of success, take the time up front to explore and evaluate your business and personal goals. Then use this information you will find below to build a comprehensive and well-thought-out business plan that will help you reach these goals.
The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.
Before starting out, list your reasons for wanting to go into business. Some of the most common reasons for starting a business are:
– You want to be your own boss.
– You want financial independence.
– You want creative freedom.
– You want to fully use your skills and knowledge.
Next, you need to 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?
– How much time do I have to run a successful business?
– Do I have any hobbies or interests that are marketable?
Then you should identify the niche your business will fill. Conduct the necessary research to answer these questions:
– Is your idea practical, and will it fill a need?
– What is your competition?
– What is your business advantage over existing firms?
– Can you deliver a better quality service?
– Can you create a demand for your business?
The final step before developing your plan is the pre-business checklist. You should answer these questions:
– What business are you interested in starting?
– What services or products will you sell?
– Where will you be located?
– What skills and experience do you bring to the business?
– What will be your legal structure?
– What will you name your business?
– What equipment or supplies will you need?
– How will your company’s business records be maintained?
– What insurance coverage will be needed?
– What financing will you need?
– What are your resources?
– How will you compensate yourself?
Your answers will help you create a focused, well-researched plan. Your business plan should serve as a blueprint. It should detail how the business will be operated, managed and capitalized.
Types of Business Organizations
When organizing a new business, one of the most important decisions to be made is choosing the structure of a business. Factors influencing your decisions about your business organization include:
– Legal restrictions.
– Liabilities assumed.
– Type of business operation.
– Earnings distribution.
– Number of employees.
– Tax advantages or disadvantages.
– Length of business operation.
After finding out the above, you need to develop a business plan that would help you start a small business online. Business plans most times contain the following;
Plan Outline
The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components helps make drafting it a more manageable task.
Introduction.
Give a detailed description of the business and its goals. Discuss the ownership of the business and the legal structure. List the skills and experience you bring to the business. Discuss the advantages you and your business have over your competitors.
Marketing.
Discuss the products/services offered. Identify the customer demand for your product/service. Identify your market, its size and locations, Explain how your product/service will be advertised and marketed. Explain the pricing strategy.
Financial Management.
Explain your source and the amount of initial equity capital. Develop a monthly operating budget for the first year. Develop an expected return on investment and monthly cash flow for the first year. Provide projected income statements and balance sheets for a two-year period. Discuss your break-even point. Explain the personal balance sheet and method of compensation. Discuss who will maintain accounting records and how they will be kept. Provide “what if” statements that address alternative approaches to any problem that may develop.
Operations.
Explain how the business will be managed on a day-to-day basis. Discuss hiring and personnel procedures. Discuss insurance, lease or rent agreements, and issues pertinent to your business. Account for the equipment necessary to produce your products or services. Account for production and delivery of products and services.
Concluding Statement.
Summarize your business goals and objectives and express your commitment to the success of your business.
Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your financier. Please note, the business plan is a flexible document that should change as your business grows.
Now you have learned how to start a small business online, go ahead and put what you have learned into practice. Search through this blog for a more helpful article on creating successful online businesses. If this is your first time here or you are not part of our subscribers, feel free to subscribe with your email so you can always get future effective updates sent to your email address.
