Beginning Your Start-Up
The decision to become an entrepreneur is an exciting one; however, bringing the idea to fruition entails both vision and hard work. There are many factors to consider, such as the foundational concept of the business, what consumer need will be met and how the company will be funded.
An idea
A start-up begins with an idea and, ideally, a passion for the business concept. However, the idea has to be feasible and provide a solution to fulfill a consumer need.
Timothy Faley, Ph.D., states in Inc. Magazine, "Successful new businesses become so by either filling a new or underserved market need or filling an old one better." If there is no market need or the idea doesn't fulfill a specific niche, the odds for success of the new business significantly decrease.
Business plan
A business plan is essentially the blueprint that provides the company and/or investors with information and direction. A written plan also helps build upon the vision. Writing good vision and mission statements can help clarify and guide the business plan.
The marketing plan helps determine whether the business can fulfill a consumer need and whether the idea is marketable. This process includes fleshing out the product or service offered, considers marketing channels, examines target markets and competition and performs an overall analysis.
Preplanning for operations is also necessary. Operations focuses on human resources, including management and administrative support; any licenses or zoning requirements that need to be met; operation strategy and execution; and the necessary facilities, equipment and inventory. In addition, a good IT plan should be integrated into operations, as well as an overall risk assessment.
Financial planning is crucial. In this area, an industry analysis, sales forecasts and initial financial statements are generated. In addition, start-up capital is considered, which includes evaluating personal investments and any additional money needed to fund the business. It is also a good idea to create an exit strategy.
All three segments of the business plan should include budgets. The business plan is not a rigid document; it can and should be flexible and adapted as necessary.
Planning ahead
Generally a business takes a period of time before a profit is realized. FindLaw states, "Business owners don't realize is that it can take months or years to make a profit." Since revenue cannot always be determined early on, business owners have to plan for the possibility of a lack of initial inflow of cash.
In addition, an M.B.A. degree can be beneficial to entrepreneurs beginning a start-up because the curriculum teaches all the vital components necessary to run a business, including how to write the essential business plan.
