And, it can be in a field in which you are passionate, or a field in which you know you will make great money; if you’re lucky it can be a combination of the two, or the latter grows into the former. I have done all of the above, very successfully.
Don’t be intimidated by what you imagine is the work required to start a business or purchase a pre-existing business. There are two main reasons why. First, there will be a lot to learn and do, fact, but in today’s Information Age, anything you need to know, as you go, is at your fingertips, online. Every guide you can imagine exists both via government sites like SBA and via various private sector business sites from resources like Inc. to a variety of sites like this: sbtdc. Second, you don’t have to do everything at once.
There’s no need to end up half tilted and bent over your desk with you head in your hands and your hair gradually falling into your cuppajoe because you’ve loaded your mind with the notions of everything you’ll likely have to get accomplished in the next x months and years. Don’t take it all on, don’t get overwhelmed, don’t put yourself in the position of wanting to quit before you’ve started!
Always keep in mind what you dont know (enough), and what you dont yet have time to learn, means you hire those who do and can, or someone who can oversight.
In the words of the famous social reformer, and educator, Sophonisba Breckinridge:
You dont have to know everything, but you should learn how and where to find the things you need and want to know.
Warm up to the Ten Key Steps in starting a business. As you progress through each, I recommend you whiteboard these together, in progression. Again, you don’t have to do everything at once, do a few of these at a time, and do these in order. Do each one and let the related information ruminate in your mind. Let your mind have time to form questions and thoughts. Jot these questions and thoughts down as they arise, and work on answering and implementing each. This allows your memory to process better in the long-term because you are working with your own natural flow of consciousness and means for sorting it. As you finish time spent with each, ruminating, insert your answers onto your whiteboard in the corresponding sections.
Don’t pass out on your office floor from the notion of there being Ten Key Steps! Simply start with the first planning process below!
Address the first step of writing your business plan. This entails developing a Financial Projection, and that starts by you shopping your competition and analyzing your market. Grow to know your competitors’ related products, services, availability, and pricing. This will assist you in learning where you need to allocate in an efficient manner. It will help you in estimating your profitability.
If you’re starting a new business operating on a cash basis, know what your start-up and monthly operational costs will be. Allow for a plus/minus factor, margin of error, and for unforeseen expenses. Map out best and worst case scenarios which will ensure your preparedness, ease any of your potential angst along the way, and build confidence so that you can focus your attention in other areas as you progress.
If you’re purchasing an existing business, then, primarily, you’ll perform the same procedure as discussed above. However, you will need to review this company’s past monthly financial reports to estimate your monthly operating costs, then estimate any purchase and take-over costs, and combine.
If you intend to start-up using creditors, you will need to prepare financial data in advance, in a similar but more extensive manner. Creditors want to see what you project for the next five years. This will include forecasted income statements, balance sheets, and capital expenditure budgets.
Your first year statements, sheets, and budget, should indicate everything in a monthly format, once that is completed you should also provide that information for each in a quarterly format.
Your third through fifth year statements, sheets, and budgets, need only be presented in an annual format.
Things to always keep in mind with these:
Your projections should always match the amount of funding that you are requesting.
You should always indicate what parts of your projections are based on assumption so that your creditors will feel confident with you if any differentials, those plus/minus factors, any margin of error, arise. Any deviation should not be held against you if you indicate as prescribed.
You should always include a final summary using graphs and images in its presentation. Provide a short overall review, including ratio and trend analysis, for all of the financial information you have provided. Use graphs and images to simplify your summary.
Stay focused on this first key step. Perform it. Don’t revert towards thinking about everything else that will need done, that just leads to you feeling frazzled! Look at this tree, not its forest!