Almost everyone I know dreams of “being their own boss” and running a business. Some are even brave enough to start their own business. Before you do though, here are the key issues you need to consider:
1. Legal Structure
It is important to understand the different ways a business can be structured – as a sole proprietorship, partnership, corporation, etc. Speak with a lawyer to make certain all your legal structure requirements are met and all government regulations are being adhered to before your business is launched.
2. Financing Requirements
You must determine your business’ cash flow and financing requirements early on. In addition to this, know your credit rating. It is crucial to keep a solid credit rating and be aware of any asset-backing requirements before your doors open.
3. SWOT Analysis
Starting with a carefully-examined SWOT analysis will help ensure the future success of your business by employing your strengths (i.e. competitive advantage), mitigating your weaknesses, taking advantage of opportunities (market trends), and planning for threats (competition).
4. Value Proposition
Before you cut the ribbon, you must be able to answer: what is your value proposition? Put another way, why should customers choose your services or products over your competitors? An easy place to start is asking yourself whether you will deliver premium services / products at premium prices, or will you provide mid-range to lower-quality services / products at a more convenient price.
5. Supplier Relationships
In order to run a successful business, you will need to develop multiple supplier relationships. This will help keep your suppliers competitive and will be a form of contingency planning, in the event one supplier goes out of business.
6. Marketing Planning
A marketing plan examines your product, pricing, promotion, distribution and service strategy, as well as the profile and needs of your target market. The goal is to optimize your marketing budget by crafting messages and tactics that engage your target audience – speaking to their critical needs and proving why your product or service is the best choice for them.
7. Location Selection
You have heard real estate professionals before: location is everything. Your proximity to suppliers, customers and the competition can significantly impact your success. Choose a location that gives you maximum advantage in these areas.
8. Process Development
Research has proven that customers equate consistency with professionalism, credibility and excellence. Before you open your doors, establish sound business and service processes to ensure you are prepared for anything, and will function in a consistent and professional manner.
9. Human Resource Planning
Ask yourself: who will I need to hire to make sure my business runs smoothly? At first, you may not be able to hire all the people you would like, but put a wish list together, then prioritize. The first person you must have is a salesperson. Unless you have revenues coming in, it will be a challenge to make payments that keep your business afloat.
If bookkeeping is a weakness of yours, this is an area you may choose to outsource. It is commonly a tedious and taxing responsibility for business owners, and a professional may make cost-saving discoveries you may not find on your own.
11. Weakness mitigation
Before starting your business, you should identify what your areas of weakness are. Then, consider mitigating these by outsourcing a task (such as bookkeeping), by hiring someone who’s strong in the areas where you’re weak, or by bringing on a partner.
12. Contingency planning
New business ventures do not always go the way we expect, so be sure to plan for potential failures.
A well-thought-out business plan will examine all of the areas above.
For help preparing or evaluating your business plan, contact a member of our team.