Even during an economic downturn, new businesses will continue to pop up. When the market is going well, people are more confident to enter the business world and start their own venture. Even when the market starts going south and people start losing their jobs, they will have that extra push to start their own business. There will always be a good reason to start your own business. However, no matter what is going on with the economy, itís going to take more than just a great idea and passion to get your business started and keep it alive through good times and bad.
The idea for a new business can come from anywhere, whether itís an innovative product/service or entering a niche market. Sometimes itís just a passion for a hobby turned into a business, or just another coffee shop or convenience store in an area where itís needed. Whatever the business is, the ideal way to protect your idea is to just get started.
One thing thatís for sure is there will be a lot of work to do before you open your doors to that first customer. First thing you need to know is whether there is a demand for your product or service. Are there people out there who will pay their hard earned dollar for the product or service you are offering? You will need to do some market research to determine this. Find out where you fit in the industry you are entering. Is this industry thriving? Are there too many players in the market already? How will you plug into the market? Answering these questions will tell you if there are enough consumers to sustain your business.
Once you know there is a sustainable market for your business, you can start figuring out what you will name your company. The name can be as simple as your own name, or you can be more creative. Keep in mind that the more informative your name is, the easier your consumers can find you. For example, John Smith and Associates is a good name, but John Smith and Associates Accounting Services will tell your clients exactly what you do and you will have a better chance of showing up in their search. Also, you will get more and better qualified calls inquiring about your business.
Now that you have a market and a name, another important decision needs to be made: will your business be a sole proprietorship, partnership, or an incorporated company? There are many advantages and disadvantages to all these business structures. It is important that you figure out which structure will work best for you and your business. It would be wise to speak to other business owners or obtain some legal advice as to how you should structure your business. For example, having a partnership is a great idea if you want to share some responsibilities and financing, but there also needs to be exit strategies if one partner chooses to leave or can no longer fulfil their obligations. Life can be unpredictable, so itís safer to explore all your options before starting the business.
Letís talk moneyóevery business needs it to get started. You will need to determine what your start-up costs are so you know how much external financing you will need and how much you will contribute to the business. If you are going to a bank for financing, you will need to know what your expected sales will be (a sales forecast), as well as what your monthly expenses will be (an income statement.) You will also need to determine how much money will be going in and out of the business (a cash flow statement). All these statements will let your investors know what they can expect from your business financially, as well as indicate when you can expect a profit and where you can make changes to ensure profitability. Furthermore, if you are getting financing from a bank, you will need to legally establish and license your business.
All of the above steps should be written down and condensed into a professional business plan. Having a business plan is your ultimate way to show peopleóinvestors, staff, etc.óthat you have done your homework, and you know what it takes to get your business started and make it successful. A successful business starts with a plan.