Evaluation

Defining Your Business Idea
Setting Goals
Understanding Your Personal Profile
Budgeting and Financial Planning

 

Defining Your Business Idea

It is important to think through the details of your business idea and get it down on paper. Key questions to answer: Ý

• My business idea is Ö
• My proposed business name is Ö
• My products/services, in order of importance, will be Ö
• My average customer will be (describe in terms of age, gender, education level, income level, etc.) Ö
• My business will cover this geographic market area Ö
• My major competitors will be Ö
• Customers will buy from me instead of from competitors because Ö
• Education and skills I will need are Ö
• Other resources I will need to line up are Ö
  
  Once you define your idea, it is time to set some goals. Setting Goals

Setting Goals

Determining goals is a difficult and sometimes frustrating experience. Yet, it is a very important first step in planning your business. Having an idea is great, but an idea is not the same as a goal. Once you have a goal you can work on all sorts of ideas to reach it. Choose goals carefully, and then lay out an action plan.

For example:

Idea: I want to earn more money
Goal: By January 15, I will have $200 more a month to spend on my business

Methods	Action Steps
1. Get apart-time job	Research job opportunities and put together a resume
2. Raise my prices	Investigate competitors prices to see if there is room for a price increase
3. Cut my costs	Search for less expensive sources of goods
4. Win the lottery!	Buy lottery tickets and keep your fingers crossed!

Establishing goals gives you a yardstick to measure your performance as you progress through life. Goals are very personal -- there are no right or wrong answers. Only you can determine what goals are appropriate.

 

Guidelines for Goal Setting

GUIDELINE 1: Your goals should be your own. YOU must be committed
to your goals.

It is natural to share goals with other people, such as a spouse or an employer. When you decide to accept the goal of another person as your own, consider whether it is consistent with what you want. If you cannot commit yourself fully to the goal then you are probably going to fail.

Sometimes it is a good strategy to accept another person's goals temporarily in order to achieve one of your own goals. For example, if you want to start your own business, but lack essential management experience, you may decide to accept the goals of an employer for a time. This will help you gain valuable experience and skills before going into your own business.

 

GUIDELINE 2: Goals should be specific. They are most useful if they are concrete, clear, and written.

Writing down your goals helps to clarify what you want. You may be saying to yourself, "Oh, I can keep track of my goals in my head." Many people try to do this. Usually their goals become just vague ideas when they try to express them later on.

Start writing down some goals right now! To begin with, you can start with vague ideas you carry around in your head. Don't worry about being specific at this point. That will come later. Write whatever comes to your mind. Don't worry about whether the ideas are large or small, long-range or short-range, simple or difficult. The task is to get something, almost anything, down on paper. You can make them more specific later.

Review what you have written. Is anything keeping you from working toward these things? Choose one of your ideas and write it below in a form that is clear, concrete and specific.

 

GUIDELINE 3: Goals should be measurable so that you can tell when you have accomplished them.

Probably the easiest goals to measure are financial because they can be stated in dollars and cents. Others are somewhat more difficult to measure. Here the question you ask yourself is, "How will I know when I have accomplished my goal?" Suppose your goal is to have a successful business. How will you measure this success? In profit? In growth? In the number of customers or clients you serve?

Measurable goals help to keep you from getting discouraged. It gives you the pleasure of saying "I DID IT!"

 

GUIDELINE 4: Goals should be set for a definite time period.

You've heard people say that they work best under pressure. If you are working toward your own goals then YOU must provide the pressure. One way of doing this is to set deadlines and timetables. Remember to make them reasonable. If you consistently underestimate the time it will take to accomplish a goal, you set yourself up for failure. If you give yourself too much time, you may simply forget about the goal for lack of pressure. You may lose enthusiasm or you may put off working toward your goal until near your deadline and then have to work in "overdrive" just to get done on time.

When you set deadlines and timetable, avoid being so ambitious that you exhaust yourself. Arrange tasks so that you can pace yourself and take breathers, as you need them. If you pace yourself effectively, you will begin to increase your confidence in your ability to accomplish even more challenging goals.

Consider the time you have available. Break it down into separate tasks and set a deadline for completing each task. Finally, decide how you are going to remind yourself of each deadline. Will you attach a list of deadlines to your mirror, desk, or bulletin board where you will be reminded of them often? Will you note your deadlines in an appointment book? Whatever you decide is fine, as long as it is consistent with your own way of doing things.

 

GUIDELINE 5: You should set both short-range and long-range goals.

Some people recommend establishing long-range goals first; others say start with short-range goals. The point is to start somewhere! Once you form the habit of goal-setting, you are likely to find that you can work either way, and back and forth.

If you have fairly specific long-range goals, you can develop short-range goals consistent with them. If you have a short-range goal that seems to be inconsistent with your long-range goals, you must make a decision. Will you take a temporary detour? Will you eliminate your short-range goal? Will you alter your long-range goal?

 

GUIDELINE 6: Your attitude toward your goals should be flexible.

You should always have the right to change your mind. Studies of people over different periods of their lives indicate that as people get older, their priorities are likely to change. At one point in your life your work may be the most important thing to you. At another point, your leisure or community may be the most important. Goals should allow for changing priorities.

A more realistic sense of how long it takes to accomplish things will come as you gain experience at setting and working toward goals. Allow yourself flexibility in working style and timing.

 

Understanding Your Personal Profile

 

What do I need to think about before I start my own business?

• Am I the type of person to own and operate my own business?
• Do I have the knowledge necessary? How much income do I need to survive in the first years?
• How much income will this business generate?
• Do I have a product/service that people want?
• Are there already too many people doing this?
• Where will I get the money to start the business?
• Am I prepared to work the long hours it takes to build my business?
• Can I do it by myself or will I need employees?

 

What are my commitments?

• What level of attention will I need, can I give to starting a new business?
• List all the commitments in your life, including personal and business. On a scale of one to ten, where would you place your various commitments?
• Where do you place your commitment to start a new business?

 

Do I have the "know-how"? - Use the "Know-how" sheet to help you think about your readiness to start a business. Printable "Know-how" sheet

   1. I have no problem keeping my checkbook straight.

   2. On days that I have a lot to do I have no trouble getting everything done.

Budgeting and Financial Planning

Take some time to think about your personal financial needs and resources. You need to consider how well you will be able to support yourself during the business start-up. Use the Personal Balance Sheet and Cost of Living Budget as tools to get a good picture of your financial situation.

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