HE SAYS:

One thing I have learned as the owner and operator of a small business, whether it was my law practice or USFSB, is that you need to develop a realistic business plan before you start your own small business or, even, before you make any important changes in the way you operate your existing small business.

Yes, being self-employed requires a certain level of risk taking and demands that you be decisive; however, that does not mean you should be foolhardy and throw caution to the wind.   The risks that you take should be calculated risks based on doing your homework and researching your marketplace.

There are too many factors involved in successfully starting or operating a small business to leave it all up to chance.

You need to know the nature of your potential customers.  You need to determine what type of people in your marketplace, whether that is local, regional, national, or global, will most likely want or need your product or service.  You need to determine how you will best reach out to those people and let them know about your business.  You need to determine how you will create a demand for your product or service and how you will deliver or distribute your product or service to satisfy that demand.

You need to know your potential competitors.   You need to determine how many there are and, more importantly, how will you present and deliver your product or service better than your competitors do, particularly, regarding the quality of your product or service as well as such things as price, promotions, and advertising.

You need to understand the nature and amount of your start up costs such as inventory, renovations, equipment, and supplies; your fixed overhead costs such as rent, utilities, payroll, and taxes; and your discretionary costs such as marketing, advertising, and promotions.   That means developing a realistic budget before you venture forward.   Many new business owners either drastically underestimate their start up and overhead costs or overestimate the amount of income that the business will generate.

Of course, your plan will not be complete until you determine how you will acquire the capital needed to start up your business and to sustain it while you grow your business to be profitable, which can take a year or more.

In the enthusiasm and exuberance of starting your own small business, it is easy to rush to judgment and fail to adequately plan ahead which, invariably, will cause your business to fail.

WHAT DO YOU SAY?