1. Who starts a micro or small business?
More and more people are breaking away from careers where they've worked
for others. Maybe they desire a simpler lifestyle and decide to turn
a hobby into income. Or they're new parents who want to continue their
careers to some degree while they take care of their child. Perhaps
they're victims of corporate downsizing and have decided to strike out
on their own as consultants. Or they just simply want to better themselves.
2. What is an Entrepreneur?
To quote Webster's definition, a person who "organizes, manages
and assumes the risks of a business or enterprise."
3. What type of business should I consider?
Generating business ideas starts with you. Think now and think long
about the products or services you'd like to see. Every time you find
yourself saying, "There ought to be a..." or "I wish there was a place
where you could get..." write down the missing ingredient, be it service
or product. Also keep track of the "missing ingredients" your friends
and associates mention. Every "Why isn't there a..." or "I can't find
a..." is more than just an idle complaint-it's a need waiting to be
met, and Recognizing and filling a need for a product that currently
doesn't exist is a pretty good recipe for success. Chances are you'll
soon have a long list of things this country needs. You'll still have
to go through the process of deciding whether you should be the person
to provide this product or service, but you will have taken the important
first step of identifying a potential business for you.
4. Can I make it happen as a business owner?
One way to answer the question is to imagine yourself as the first in
line for a job interview at your new business. Just as every applicant
has strengths and weaknesses, so does every prospective new owner of
a small business have strong suits and blind spots! Starting a business
isn't exactly like interviewing for a job-Instead, you have to ask yourself
the questions-questions about your professional skills, your experience,
your accomplishments, and how they may help you in your business venture.
Use the process to reaffirm that you would hire you.
5. Where should I locate a business?
Your search for the ideal workplace may start, and end, at home. That
can be the ideal option for many people working for themselves, especially
those who:
- Are starting part-time ventures while keeping their regular, full-time
jobs.
- Are turning a hobby or craft into a business.
- Want or need to be in the home to provide or supervise care for
their family members.
- Require an environment custom-designed to best accommodate their
disability.
In fact, any business that can start as a one-person operation - lawn
care, craftsperson, web sales, graphic artist, masseuse, etc.- is a
candidate to begin life as a home-based business. It's an option that's
easier financially than even the best bargain-basement lease, and you
can't beat the commute.
6. Is it legal to operate a home-based business?
Local zoning ordinances could prevent you from working from home. Typical
restrictions prohibit the use of toxic or combustible materials, unsightly
outside operations, displays of products and supplies that would turn
residential properties into de facto retail stores, and activities that
would cause traffic congestion. Check with your town clerk or zoning
board to see if there are any restrictions on home-based businesses
and whether they'd affect you. You might also need a license, a fire
inspection, even a permit from the health department if, for example,
you're catering or preparing baked goods.
7. Is a home-based business practical for everyone?
Take a personal inventory of whether you're able, from an emotional
and practical standpoint, to work out of your home.
- Can you work without the hubbub and distraction of co-workers?
- Might you even thrive?
- Do you have the discipline to get up every morning and plant yourself
in "the office" if your commute is measured in footsteps instead of
miles?
- If you have children at home, will you be able to focus on work
instead of on them? Will they let you work at home, even if you hire
in-home day care?
- Can you set aside a workspace?
It will help you focus if you can designate a portion of your home
for work, only work, and nothing but work. A clearly defined space for
"the business" serves a second purpose: It allows you to take a deduction
on your tax return for costs related to devoting one section of your
home solely to running a business.
8. How do I determine how much money I will need to start a business?
Let's say you're starting a snowplowing and lawn-care business. You
figure you'll need $7,500 for startup costs (lawn mowers, grass bags,
rakes, shovels, snow blowers, snowplow attachment, fertilizers, office
equipment). You also anticipate that your early operating expenses (supplies,
advertising, insurance, and so on) will outpace your revenues (based
on contracts with an office park and a local townhouse development)
by as much as $2,500 before you begin turning a regular monthly profit.
Consider starting a startup budget of $11,250: $7,500 for direct startup
costs. $2,500 for anticipated early revenue shortfalls. $1,250, representing
a 50% "margin" on the $2,500 anticipated early shortfall.
9. Why do you write a business plan?
It's hard to take a business seriously when there is little or nothing
in writing about its structure, future direction, or position in the
marketplace. That's why a business plan may be the most important document
you'll ever write. Simply stated, a business plan is a written document
detailing the operational and financial aspects of your company. Like
a road map, it helps you determine where you are, where you want to
be and how you're going to get there. If it's well written, your business
plan will keep you in touch with your goals, potential risks and probable
rewards. Moreover, it may be the crucial factor in convincing investors
and lenders to give you the financing you'll need to realize your dream.
