Simple Steps for Starting Your Business
Tip 1: Start Working on a Business Plan
Have you considered what your start up costs will be?
This may sound a bit crazy, but starting a business NOW may be just right for you! Many extremely talented and experienced individuals have found themselves forced into early retirement or job loss due to corporate down-sizing, companies closing or corporate mergers.
Start working on a business plan – “If you fail to plan, you plan to fail!”
The FIRST things to consider are your new business start-up costs. Don’t underestimate! Nearly everyone who has ever started a business has underestimated the costs, and then faced the danger of running with inadequate capital reserves. The key to avoid this situation is to adopt a rigorous approach to your research and planning. Here are five things to consider when planning a new business:
1. Expenses – Begin by estimating expenses. What will it cost you to get your business up and running? Pay attention to detail and develop categories for both tangible assets (equipment, inventory and services (remodeling, insurance). Research vendors and comparison shop.
2. Contingencies – Add a reserve and explain how you decided on the amount.
3. Working Capital – You can’t open with an “empty wallet.” You need a cash cushion to meet expenses while your business gets going!
4. Sources – Turn your attention to where funding will come from. Consider the amount that you will invest yourself, how much will be by investors or partners and how much will be from borrowing.
5. Collateral – If part of your plan supports a bank loan request, you will need to show what assets are offered as collateral and estimate their values.