Are You Ready?
You have an idea for a small business. What do you do now?
Before you dive in it’s time to step back. Will your idea actually fly? Are you ready to become a small business entrepreneur?
Below you’ll find a summary of 6 activities the first time entrepreneur should complete BEFORE writing a business plan or asking for a business loan.
We have a complete breakdown in a free pdf report,ust sign up at the bottom of the page to get it.
Before Your Start Your Business Plan…
1. Decide what business you want to start.
On the surface, this may seem really obvious, but nonetheless first-time small business owners can often find it difficult to see the wood from the trees. They have so many ideas, and all seem like great opportunities, it is difficult to know which one to focus on. If this sounds like you, read on.
Winning businesses tend to revolve around simplicity and focus—as well as all the other things that will make them successful like: profit margins, customer need, industry trends, etc. So to have a very clear business focus up front is essential especially when the ideas cannot easily be combined.
There are lots of ways to help you consider how to make this decision. You could create a comparison table of advantages/disadvantages for each. You could create a business plan for each option (a lot of work, but the more analytical amongst you will find it beneficial). You could also look at how quickly you could get each off the ground, or decide which one would make the most money, most quickly.
Need More? To find out the 4 things to consider to help you make the best decision for you, sign-up below for our free fact sheet.
2. Craft you Business Concept Statement.
Now you’ve decided on your business concept or idea, can you encapsulate it into a single sentence? Often this is very challenging. Being able to communicate your idea clearly and simply, so that anyone can understand it immediately, is your goal.
You will use your business concept statement (or parts of it) over and over again: in the opening line of your business plan, on your business license application, on your insurance documents, when filing your first tax return, to name just a few. You will also use it to open a discussion with your financial institution, networking partners, website copywriters. Anyone who needs to understand what your business is in a nutshell.
It will also help drag you back to the root of your business whenever you get carried away with excitement during the business planning process (which happens to everyone). This is not your sales or “elevator” pitch, this is a simple, specific statement—in plain English ie removing all industry jargon—describing the service you will be providing.
Need More? To learn how to construct your business concept statement step-by-step, and see an example, sign-up below for our free fact sheet.
3. Calculate what start-up money you'll need.
There are very few businesses that have no start-up costs attached. Even an online business will have some costs associated with it, and at the very least there will be business registration costs, insurance, etc.
In order to start to get a feel for the costs involved to start up a small business in your area, take a visit to your local Registries office to find out how to register a business of the type you have chosen, and how to do a search to register its name. Both of these services require payment and may also be online. Then check with your local authority regarding where you will be siting your business. There will be licensing and zoning considerations. Lastly, think about business and property insurance.
You will get down into the nitty-gritty of your budget when you create the financial section of your business plan, but it’s never too soon to make a short list of likely start-up costs, in order to get a ballpark figure to work with. You can then have a realistic view of what financing options may be available.
Need more? Sign up below to get a list of other things you should consider for your start-up costs.
4. Investigate who can help you with your funding.
It is rare to find a new business owner that does not need some sort of financial assistance. So there are a number of places you can explore as possible options to help you finance your start-up. Traditional financial lenders like banks or credit unions, non-traditional options like not-for-profit institutions like Community Futures, grant providers, partners/investors.
However, before approaching any of them, you will need a business plan, and you should also be aware that most banks and other financial institutions, will want to see that you have invested some cash into your idea yourself – 20-30% of your loan request is usual, more if you have a particularly risky business idea.
As well as having a certain proportion of your start-up costs to put down, there will no doubt be other requirements for your loan provider.
To find out what else financial institutions are looking for, and how business loans generally work, sign up for the information sheet below.
5. Check in on your mindset and schedule.
Starting a business is an exciting thing to do, but there is no mistaking the time it takes to get it set up and going. In addition, if you haven’t gone through the process before, it can be very stressful.
Generally speaking entrepreneurs spend long hours getting their business going, and will often do a lot of the work themselves until they are making enough money to employ some help. Starting a business will sap your energy, and time, and will often steal your attention away from family and friends.
Before you start, ask yourself the questions: Is this the best time, for me and/or my family? Do I have the resilience to see this through? What will I do if the stress starts to take its toll on my physical or mental health? How well do I manage my time?
It’s time to be honest with yourself regarding whether or not starting a business is a possibility for you at this point in time.
Want some practical tips on how you can help yourself keep manage the planning phase and that first year? Sign up for our downloadable information sheet below where each one of these points is expanded.
6. Finally, do your research.
Before you produce your business plan, it’s time to test your business idea. You will only know if it will work if you test it against the market, not just your view of the market. And this will take, research.
In your business plan you will justify your business idea in terms of validating:
- The products and/or services you want to offer, and whether there is a need for them
- Who your ideal client or customer is and how you will attract them
- Whether there are enough of your target customers in your location (if a local business) to create a profit for your business
Need some tips regarding how to build your business case? Sign up for our information sheet below.
Want to Learn More?
We have a complete breakdown of these 6 crucial elements to help you plan your new business in our free pdf report, Getting a Head Start on Your Business. Just click below to get it. We’ll also let you know about other resources we have available to help you.