The main question on every entrepreneur’s mind is this; is now a good time to start a new business? The answer is ABSOLUTELY. There are some qualifying factors to that statement, but overall the business environment for startups is very good now and looking good going into the fourth quarter of 2010. The outlook for business startups in 2011 is even better, especially in the first two quarters of the year.
There are critical factors that a new business owner should consider when starting a business. Those critical factors include:
1. The business startup has to be well planned.
2. The business must be well funded from the very beginning.
3. The business has to be well managed.
4. There has to be an absolute understanding of managing all areas in the operation of the business.
What do you mean when you say that the business must be well planned? Here are the first two steps to business planning. The first is the initial planning step. This is where the vision for the business becomes defined and focused. The second step is the completion of a business plan. New business owners tend to do a bad job on the initial planning phase and completely skip the business plan. In my opinion, starting a business this way is a formula for failure.
THE INTITAL PLANNING STAGE
The initial planning step requires experience and knowledge. If the new business owner has never planned for a business startup in the past, they must get some help. They should seek out someone who is a business startup expert, an accountant or attorney that has new business startup experience, or they should seek out a partner to help them start the business.
The initial planning step translates the dream to reality. This is the beginning of the overall plan of what the business will be, how the business will operate, who will manage the business, what products and/or services will be offered, how will the products and/or services be offered, etc. The vision for the business becomes truly focused on what ultimately will be developed.
THE BUSINESS PLAN STAGE
The second step, the business plan completion step, is a complex task. If the new business owner has experience completing a business plan, then there are several business plan software applications out there that they can use. I have developed a business plan software solution called ProBP. If the new business owner has never done a business plan, then I would certainly advise them to hire someone to do the business plan for them.
The business plan step takes this vision for the business and documents it. The business plan explains the business concept, management and operational plans. Then the business identifies the target market, describes the marketing plan to reach this target market, defines the expense and revenue picture in the financial plan and finally provides all of the details for the use of the business plan. Those uses will be for development of the business, the operation of the business and/or financing the business. It usually is a combination of these. The business plan is an excellent management tool to ensure that the business is on track with the plan and that the business will be making the profit that the owner and the investors/partners are anticipating.
The main point that I want to make is that although both of these stages are critical and complex, they can be managed and completed by competent people. The new business owner must not, ever, skip these stages.
No comments:
Post a Comment