Small Business Startups

Sound Personal Reasons for Starting a Business ...

You must have sound personal reasons for wanting to start your own business.

This is number one on your list. Having good personal reasons will take you halfway there.

Personal reasons for starting your own business are many and varied but here are some that may spur your desire to start your own business.

• An out of touch or unappreciative boss
• Being disgruntled with the culture of the company, often due to a change in management or management style
• You have a new idea you are passionate about and that could turn you into an entrepreneur
• Bureaucracy getting you down, you are being stifled and need to get out
• You don't like working for other people
• Your company is downsizing, and you can get out with a golden handshake
• You have been ill and need to change your line of work
• Retirement looms, and it's a great opportunity to go out on your own

Whatever your reason, have one. It must be your personal reason, and one that spurs you forward and helps motivate you to make your business idea work.

Basic reasons that are unsound ...

• Don't start a business on a whim. Fanciful ideas for new businesses are often passing and so is the business.
• Don't use someone else's reason to start a business that you don't really belive in or like. Never be pressured into something.
• If everyone else says don't, then think carefully. Check out your true reasons and be very sure that you are right.
• Stubbornly pushing ahead because you are frustrated, when all your business research says it's unworkable. Persistence is great, only if the business idea and personal reasons work together

Business Management Skills ...

You must acquire business management skills and an education in your business sector.

Ask yourself ...

• Do I know enough about this potential business?
• Can I find out how to do it?
• Where do I get help with advice on small business startups?

Great questions to ask and very important to the success of your business.

Fortunately most people going into business for themselves do know something about that business.

In many cases they have been involved in a similar business as a manager or employee, or the subject was a hobby or a sport for them.

In some cases, new business owners choose a business way beyond their experience, because they see an opportunity. In this case they need to read up on it and learn about it quickly.

So, for example ... If you are determined to go into business building fibreglass boats, go work for a boat builder for six months before starting your business. Then decide if that is what you want to do with the rest of your life.

Practical experience is a great teacher ... Any advice or experience you can gain prior to small business startups, should be looked at as an investment in your future, so grab it.

Learn the basics of your intended business ... Learn the manufacturing process, how it retails, business marketing, advertising ideas, distribution planning, stock control etc. and remember planning, research and education, never replace doing. This is where you need to spend the bulk of your time.

Does your small business startup have enough capital?

It not only takes work to build a business, but capital as well and sometimes lots of it. You need to know what your intial capital requirements are and how to use that capital wisely.

Knowing and calculating your initial capital requirements falls within your startup business plan which, includes your financial plan and budget.

Your financial plan can be as detailed and comprehensive as you like or as simple as a projected cashflow requirement for money out and hopefully, money in.

Learn to acquire and use management skills to create a financial plan, and this will give you an idea of the capital requirements and the startup costs for your business, as well as the knowledge needed to spend your capital wisely.

How much is enough business capital?

The type of business you propose to start will also determine the amount of money the business needs to stay afloat and the length of time that it will be needed for.

In some businesses you can expect to need funds for months or even years before the business begins to make sufficient profit to cover its costs.

You must prepare for this and remember to budget for the cost of keeping yourself and your family alive.

Finally remember, that in all cases, your startup cash needs will be twice as much as you have planned for. This is a common sense law.

Using your startup capital wisely ...

You have planned, budgeted and are now in business with enough money to get you to the profitable days ahead.

Well, that?s great, but can you use this money wisely and profitably, or will you spend it on nothing in particular.

You have to use your initial cash resources correctly. You don't have money to spare, so use it only on essentials that will help your business grow.

Basically this requires you to have available, financial information that applies to your specific business. You need to know where to spend your money and how to spend it, based on the type of business that you are in.

For example, spending your money profitably in a furniture manufacturing business is very different to spending it wisely in a furniture retail business.

Seek good practical advice on small business startups and understand it before you start spending any of your money.

Ask yourself if your small business startup has real growth potential?

Will your new business have the potential for growth?

We all have our limits, be they limits of education, time or capital. As individuals, we can do only so much in a day, week or month. and are limited to what we can do.

Your small business is the same, if it remains a 'one man' business, it will always be limited and will never grow beyond what YOU are capable of putting into it.

When researching your future small business startups, this is a critical aspect to bear in mind.

You may want a 'one man' business initially, but be sure to start a business that has future potential, that can grow to justify employing people. Because only then will your business have real value.

Any business that relies solely on one individual is inherently weak.

Accident, illness or death immediately stops the business and the profits.

Develop your business into a real business that needs people as employees if you want to grow it into a profit making empire.

Your potential for growth must always be there even if you do not want to grow.