Checklist Description
This checklist outlines the basic steps you need to take to start a business.
Definition
You think you have a winning idea that’s going to make you a fortune. But before you jump in head first, you should carry out some research to see whether your idea really is feasible. That means finding out who your competitors will be and whether there is an opening in the market for your product or service. Do you have the necessary skills to run the business? Gathering and analyzing this information will help you formulate your business plan and goals.
Your initial research should focus on these key questions:
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Is your idea feasible?
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Do you have the financial capacity to carry out the project?
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Is there a market for your product or service?
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How will you protect your idea?
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Who are your competitors, and what differentiates your product from theirs?
Once you have answered these questions satisfactorily, you should draw up a business plan. Most financial institutions provide business plan templates. Alternatively, you could use an off-the-shelf computer program. Your plan should contain:
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a summary describing the elements of your business;
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a description of your business concept;
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an analysis of your business within the market in order to decide how and where your company or products or services fit;
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strategies and goals for the market, and for overcoming the competition you face;
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an outline of how your products or services match your strategies and goals;
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information on how you will market your products;
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an estimate of your sales forecasts;
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what type of financing you will need, who will provide it, and at what cost.
Researching and writing your business plan may seem like a colossal task, but with thorough preparation you will have all the relevant information available and evaluated before you open your doors. As you go through the planning process, you will develop your knowledge and understanding of the proposed business, improve your chances of success, and reduce your risk of failure as a start-up owner. In short, you will be ready to run your business and equipped to compete.
First impressions count, and an accurate, easy-to-read, and well-organized text will convey professionalism and credibility. Have your figures checked by an accountant and the text proofread.
Naming your business accurately is important. Word play might be clever or funny, but it could add to the difficulty customers have in remembering and finding you. It’s also tempting to abbreviate your business name to make communications and correspondence easier, but an acronym doesn’t say what you do. The general rule is: Keep it simple and try to describe what you do.
Advantages
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Starting a business allows you to be your own boss and lets you make the decisions that shape your success.
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You get to choose how long and how hard you work.
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The owner receives all the profits, meaning that all earnings go to the sole proprietor.
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If the business is successful, you may be able to reap a tidy sum on retirement by selling the business at a profit.
Disadvantages
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All the responsibility falls on your shoulders. Good or bad, you have to take decisions that may affect the livelihood of your family and employees.
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If you incur debts of any sort, you may have to repay them out of your personal income and assets.
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You may find it difficult to go on vacation or be absent from work for long.
Action Checklist
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First, do some basic research to see whether your idea really is feasible. Ask yourself whether you have the financial capacity to carry out the project. Is there a market for your product or service, and how will you protect your idea? Who are your competitors, and what distinguishes your product from theirs? If the answers are positive, start to build a detailed business plan.
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Second, ask yourself whether you are made of the right stuff to run your own business. Do you have the character, temperament, drive, and staying power?
Dos and Don’ts
Do
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Take the time to draw up an effective business plan. It might take a month or two, but it will not only help you assess your business idea, it will also tell you whether you are ready and able to carry it out.
Don’t
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Don’t use your savings to set up in business without researching and evaluating your ideas. Many chambers of commerce have successful retired business people who will be happy to give you advice on a volunteer basis.
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