As any small business owner knows, there’s a lot to running a company. To be successful, writes Wealth Advisor Connie Brezik, you’ll want to learn what you need to know before you open your doors.
By Connie Brezik
Small businesses are the backbone of this country. People with great talent and ideas form businesses they believe in to provide others with products and services and to make a living for themselves and their families. As any small business owner knows, there is a lot to running a company, and you end up wearing many hats.
While you may be wonderful at flower arranging, you may know much less about how to form a business entity, keep proper books and records, or go about finding the best location for a shopfront. Some key elements are necessary for any business to be successful. You want to learn what you need to know before you open your doors.
Starting with a business plan, even if it originally is written on a napkin, can move you in the right direction. The Small Business Administration (SBA) has a wealth of resources to get you started. Taking a class, reading books and talking to other business owners can help you learn the basics. Ask these other business owners what they did right and what they would have done differently, now that they have obtained some valuable experience. Learning from others’ mistakes can prevent you from making the same ones.
A small business plan will have several parts, mini-plans devoted to different areas. Such mini plans may cover matters like marketing and advertising, finding the right location, hiring personnel, estimated financial projections and lining up an advisory team to include legal, accounting and financial resources. Note that if you are asking someone to loan you money or to invest in the company, a more formal business plan will be required.
You will want to do some research before you get too far along. First, is there a market for your product or idea? What consumer problem are you trying to solve? Is the market only local or much broader? Second, who are your competitors? Do you have a better product or service that people will buy? Third, what type of organizational structure will you have? Do you need a management team? Are you going to be a one-man show? How long can that be sustainable? Fourth, what could derail your business? What is your game plan for various scenarios? For example, what if three more flower shops open up within 10 miles of you?
A financial analysis is really important as well. Figure out your start-up costs and how long it will take before your business is up and running. You will have ongoing basic expenses to cover before you will be able to pay yourself. These ongoing expenses include rent, utilities, supplies, phone and internet, advertising/marketing, payroll for other employees, and licenses and taxes. Plan to have your own living expenses covered for six months to a year, as it may take this long before you can pay yourself.
Starting a business can be exciting, and writing a business plan, besides being encouraging, can help you prevent problems before they occur. A successful start can turn into a successful business that ultimately may support you and your family for many years. You may even pass the business along to your children or grandchildren one day.
This commentary originally appeared on TheCasperStarTribune.com
By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.
The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE®. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2019, The BAM ALLIANCE®