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.
