Starting a Small Business

Using a Team approach

A business is not easy to run without the help of others. Employees must be chosen carefully. Other people with specialized business knowledge may also be needed.

Why is it important to use a team approach when starting a new business?

A team approach allows employees to feel valued and motivated to take personal responsibility for the benefit of the business. Owners cannot expect to be able to do everything alone. Building a team will allow the business to increase productivity and, ultimately, profits.

Business Plan

A written description of the business idea and how it will be carried out, including all major business activities.

In addition to owner-supplied capital, what are several other sources of financing for a small business?

Borrowed money may come from banks, finance companies, or other individuals, such as friends and family. Some suppliers may also be willing to extend credit.

Description of Competition

Characteristics of the industry Condition of the economy Strengths and weaknesses of major competitors

Customer Analysis

Description of customers Location, number, and resources of customers Sales forecasts

Marketing Plan

Description of major marketing activities Description of resources needed Schedule of marketing activities

Preparation and research

Entrepreneurs should gather information about customers, competitors, important operations, government regulations and many other topics.

Steps in developing the business plan.

Gather and review information Develop the strategic alternatives Write the plan Ask an expert to review the plan

3 major goals of starting a small business

Goal 1-Recognize important factors to be considered when starting a business. Goal 2-Describe the elements of a business plan. Goal 3- Identify types and sources of financing for a small business.

Where do business ideas come from?

Hobbies, interests, and business experiences often give people ideas for new businesses.

Long Term Financing

Money needed for the main resources of a business (such as land, buildings, and equipment) that will last for many years.

Business Plan broken down

Most business plans are developed for one year and then updated for the next year. By developing a plan the owner is forced to think about important activities, the amount of time they will take, and their cost.

The Place and Time

Most retail businesses need good customer traffic. A wholesaler needs easy access to manufacturers. Manufacturers must be located in an area with access to the raw materials used in manufacturing. Transportation systems must also be easy to reach for distributing finished products. Timing is another key factor in starting a business.

Operations Plan

Organization of the company Description of major operations Analysis of resources needed Human resource plans

Sources of financing

Owner-supplied funds Borrowed funds

Financial Plans

Start-up costs Short- and long-term financial needs Sources of financing Budgets and financial statements

Types of financing

Start-up financing Short-term financing Long-term financing

What are the "strategic alternatives" in a business plan?

Strategic alternatives are alternative plans for production, staffing, financing, and so on. Even the best business plan cannot predict every possible circumstance. An alternate plan allows a business to be prepared for the unforeseeable.

Start up Financing

The amount of money needed to open the business.

Description of the business

The business idea Major products and services Ownership structure Strengths/weaknesses Long- and short-term goals

Short Term Financing

The money needed to pay for the current operating activities of a business.