Entrepreneur's Toolkit - How to Begin

Business Start-Up Checklist

Personal Evaluation

Training & Experience

Writing a Business Plan

Business Plan Outline

Business Plan Template & How-to

Business Start-Up Checklist
There are a number of steps to consider before starting a small business in the River Region. Each step will be highlighted throughout this guide. The following checklist is a reference to help budding entrepreneurs plan the steps needed to successfully own and operate a small business.

- Assess your strengths & weakness
- Assess your financial resources
- Choose a name for your business
- Choose a legal structurePrepare a business plan with financial statements
- Obtain financing
- Retain an attorney, accountant and insurance agent
- Acquire necessary licenses and permits
- Obtain Federal Tax ID Number
- Send off for federal & state tax forms
- Select a location
- Inquire into zoning ordinances
- Arrange for utilities
- Get computers, phone, office furniture, etc.
- Choose a record-keeping system
- Choose method of inventory control
- Obtain business insurance
- Open banking accounts
- Start marketing
- Open your doors

Personal Evaluation

Why do you want to be in business for yourself? You need to evaluate your reasons to determine why and what type of business is best for you. The following are a few factors to consider before embarking on business ownership.

• Primary reason for being in business
• Amount of capital required
• Your skills
• Your likes and dislikes
• Amount of time you are willing to devote
• Your financial goals
• Your business management, knowledge and experience
   

The following checklist contains a few personal considerations for being in business for yourself. Answer Yes or No.

1. Do you enjoy working long hours?
2. Do you have self-discipline and willpower?
3. Do you easily meet deadlines?
4. Do you work well under pressure?
5. Will you jeopardize your home?
6. Do you have the necessary physical strength?
7. Does your family support this venture?
8. Do you have a back-up plan?

Experience & Skills

1. Does your idea make use of your skills?
2. Does your idea require skills you do not have?
3. Can you find affordable experienced personnel?
4. Are you experienced in this line of work?
5. Do you have managerial experience?
6. Are you able to interpret financial data?
7. Are you familiar with tax regulations?
8. Do you know bookkeeping and accounting?

Planning & Preparedness

1. Have you written a formal business plan?
2. What services/products will be offered?
3. Do you know who your customers are?
4. Have you arranged for a location?
5. Do you have a list of potential suppliers?
6. Do you know the competition?
7. Have you arranged for insurance?
8. Do you have a business license?
9. Have you investigated advertising and cost?
10. Have you hired a competent staff?

Requirements for Success

1. Will your business meet unmet needs?
2. Is there a similar business in the area?Will your business have a pricing or service benefit the competition does not have?

Training & Experience

One of the most common mistakes made in starting a business is trying to do so without the necessary training and experience. Before you start a business, ask yourself whether you have the background, experience and training that is required. For example, a retailer would need some expertise in management, sales and buying. The management experience would need to include personnel, record keeping, marketing, and other skills. 

If you do not have this experience, how do you get it? Generally, it is best to work for a time in a similar company. This gives you a closer look at what that type of business entails without risking your investment during the learning period. Another way is to study, study, study. The more research you do and the more information you acquire, the easier your decision will be to start your own business.

Another suggestion for gaining experience is to take courses at your local college or university. Most area schools offer both credit and continuing education courses throughout the year. Entrepreneurial training is also available through The Chamber's Business Resource Center in Montgomery. One program, called Entrepreneurial University, is a 13-session course designed for would-be and existing entrepreneurs who want to expand their knowledge on how to develop a small business and the skills necessary to make it grow. The program's sessions last two hours, one night a week, for 13 weeks. Please contact The Chamber's Business Resource Center for more information. 

There are many publications designed to help provide insight into the day-to-day operations and problems that an entrepreneur may face. The Small Business Administration (SBA) offers a wide range of management and technical publications to assist you. Contact the SBA at (205) 290-7101 and request the SBA 115-A, Business Development Pamphlet or go to www.sba.gov.

The Government Printing Office also publishes several useful books that are available at 
http://bookstore.gpo.gov. The Alabama Development Office has manuals helping business owners and managers understand the employment laws for the State of Alabama at 
www.ado.state.al.us.  

It is impossible to become an expert over night. Many businesses rely on the expertise of others such as a small business lawyer or a certified public accountant.

Writing a Business Plan

One of the most important steps to take when starting or expanding a business is to write a business plan. A business plan is a description of your business, including your product or service, your market(s), your people, and your financial needs. There are three major reasons why you should take the time to create a written business plan. 

The first reason is that the process of putting a business plan together, including the thought you put into it before beginning to write the plan, forces you to take an objective, critical and unemotional look at your business project in its entirety. It is a useful management tool that can help you plot a course for your company’s start-up and initial growth. 

A second advantage that comes with having a written business plan is that the plan becomes an operational tool which helps you manage your business and provides a way to benchmark and measure your success. 

Lastly, a properly prepared business plan is a vital sales tool you can use to impress potential investors with your planning and managerial experience. Since many businesses start or expand through borrowed money, the presentation of reliable and complete information in a business plan is essential. 

The business plan is an excellent tool to present to a banker when financing is needed. A good business plan tells the banker that the applicant has put a great deal of thought and effort into the project. The plan will let the banker know that he is dealing with a serious, well-informed prospect, giving him more faith in you as an entrepreneur. 

If a business plan is to be submitted to a bank, it is important to realize how a banker analyzes a business plan and the questions that will be asked during the analysis. A banker’s job is to assess the degree of risk in each proposed loan and to be satisfied that the borrower can operate the business profitably, and repay the loan. A banker does this by analyzing a number of things; nature of the business,  purpose of the loan, amount of the loan, ability to repay the loan, and your business management ability. 

To convince a banker or investor of the merits of a loan request, a borrower must present complete, well-organized information which addresses these and other concerns. It is important to remember that the proper packaging of a loan proposal can be an important step in getting it approved. Business plan resources and advice can be found at the following websites: 

     www.score.org
     www.sba.gov/tools
     www.bplans.com

Business Plan Outline

1. Cover Page
   1. Name of Business
   2. Name of Principals
   3. Address and Telephone Number of Business
2. Table of Contents
3. Executive Summary
4. Mission, Goals, and Objectives
5. The Business
   1. Overview of Industry
   2. Description of the Business
   3. Legal Entity
   4. Location of the Business
   5. Management
   6. Personnel
   7. Professional Services
6. Cover Marketing Analysis
   1. Your Products/Services
   2. Life Cycle/Seasonality
   3. Market Analysis
   4. Customer Profile
   5. Competitive Analysis
   6. Market Potential
7. Marketing Strategies
   1. Location/Distribution
   2. Price/quality Relationship
   3. Business Image and Packaging
   4. Public Relations and Advertising
   5. Customer Service
8. Books, Records, Controls
   1. Record Keeping Checklist
   2. Other Operational Controls
9. Financial Data
   1. Sources and Applications of Funding
   2. Capital Equipment List
   3. Balance Sheet
   4. Break Even Analysis
   5. Income Statements
   6. Monthly Cash Flow Projections
   7. Start-up Budget
   8. Notes of Explanation
   9. For an Existing Business
      1. Historical Financial Reports
      2. Balance Sheets for Past Three Years
      3. Tax Return
10. Supporting Documents
    1. ​Personal Resumes and Financial Statements
    2. Job Descriptions
    3. Credit Reports
    4. Letters of Reference
    5. Letters of Intent
    6. Copies of Leases, Contracts, Legal Documents