Initial Considerations When Starting a New Business

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Initial Considerations When Starting a New Business

Q1. What Personal Issues Should I Consider Related to Owning a Small Business?

  • Personal issue considerations are those that involve looking at you. Are you prepared for the emotional, physical and financial strains of starting a business? Are you a risk-taker? These are just a few things to think about. The link below contains additional questions to ask yourself, along with a personal assessment worksheet you can download, fill out, and discuss with your SBDC consultant.  The first seven questions ask you to do a little introspection. Are your personality characteristics such that you can both adapt to and enjoy small business ownership/management?  The next series of questions stress the physical, emotional, and financial strains of a new business.  There are also very specific questions related to the business idea. The Final Three Questions emphasize the point that very few people can claim expertise in all phases of a feasibility study. You should realize your personal limitations and seek appropriate assistance where necessary (i.e., marketing, legal, financial).
  • Questions & Worksheet

Q2. Does My Business Idea Have What It Takes to Succeed?

  • Before you can begin to market your product or service, you must determine what will work best for you.
  • Wherever there is a need and a market that can be reached and served, there’s a potential business. The first problem you face as an entrepreneur isn’t lack of opportunity; it is actually the reverse. There are so many opportunities out there that the real problem is finding the right one for you and your resources, interests, skills and experience. Ideas for new or improved business-or even continuing a prospering business-are everywhere.
  • Click on the link below and see if your business idea has what it takes to succeed. The worksheet here, available for download, will help you visualize your business in detail. Once you have completed the questions, you will have a firm idea of how you would like your business to be run and what it is that you will be doing in this venture.
  • Questions & Worksheet

Q3. Is There a Market?

 

  • In order to grow a business, you must know who your customers are, what they need and want, and what price they will pay for your goods or services. The success of your business is determined in large part on how well you have researched your market and come up with a plan for directly targeting it. Market analysis helps you think about your business in terms of how well it addresses the demands of your potential customers. You must have a firm grasp of who your customers are in order to market your business to them. The link below will help you to begin to think about your customers and what it will take to successfully sell your business to them. The downloadable worksheet will help you to think about issues in terms of your specific industry.
  • Questions & Worksheet

Q4. What Financial Issues Should I Consider?

 

  • Financing your new venture is, of course, an integral part of establishing a business that can grow. The following questions should remind you that you must seek both a return on your investment in your own business as well as a reasonable salary for the time you spend in operating that business.
    1. How much income do you desire?
    2. Are you prepared to earn less income in the first 1-3 years?
    3. What minimum income do you require?
    4. What financial investment will be required for your business?
    5. How much could you earn by investing this money?
    6. How much could you earn by working for someone else?
    7. Add the amounts in 5 and 6. If this income is greater than what you can realistically expect from your business, are you prepared to forego this additional income just to be your own boss with only the prospects of more substantial profit/income in future years?
    8. What is the average return on investment for a business of your type?
  • As you consider these questions, you will no doubt begin to think of how you are going to obtain the funds to begin your operation. If you are like most entrepreneurs you will need to, at some point, apply for a loan. Bear in mind, your personal credit history will be a factor in determining if a loan will be granted to you for business purposes. Therefore, a good credit rating is very important.
  • The following credit reporting agencies can be contacted to obtain a copy of your credit report. If you have been declined credit, employment, or insurance in the last 60 days, you are entitled to a free report from the credit bureau that supplied the information to the creditor that declined you. If you have not been declined for credit in the last 60 days, you can receive a copy of your report for a small fee, usually not more than $8. Use the information here to reach any of the three national reporting agencies.
    • Equifax Credit Info
      Equifax Information Service Center
      P.O. Box 740241
      Atlanta, Georgia 30374-0241
      (800) 997-2493
    • Trans Union Corp.
      Trans Union Corp. National Disclosure Center
      P.O. Box 390
      Springfield, PA 19064-0390
      (800) 888-4213
    • Experian Information Solutions
      Experian National Consumer Assistance Center
      P.O. Box 2104
      Allen, TX 75013-2104
      (800) 397-3742

 

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