Entrepreneur's Toolkit - How to Begin
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
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.
- Do you enjoy working long hours?
- Do you have self-discipline and willpower?
- Do you easily meet deadlines?
- Do you work well under pressure?
- Will you jeopardize your home?
- Do you have the necessary physical strength?
- Does your family support this venture?
- Do you have a back-up plan?
Experience & Skills
- Does your idea make use of your skills?
- Does your idea require skills you do not have?
- Can you find affordable experienced personnel?
- Are you experienced in this line of work?
- Do you have managerial experience?
- Are you able to interpret financial data?
- Are you familiar with tax regulations?
- Do you know bookkeeping and accounting?
Planning & Preparedness
- Have you written a formal business plan?
- What services/products will be offered?
- Do you know who your customers are?
- Have you arranged for a location?
- Do you have a list of potential suppliers?
- Do you know the competition?
- Have you arranged for insurance?
- Do you have a business license?
- Have you investigated advertising and cost?
- Have you hired a competent staff?
Requirements for Success
- Will your business meet unmet needs?
- Is there a similar business in the area?Will your business have a pricing or service benefit the competition does not have?
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
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.
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:
- Cover Page
- Name of Business
- Name of Principals
- Address and Telephone Number of Business
- Table of Contents
- Executive Summary
- Mission, Goals, and Objectives
- The Business
- Overview of Industry
- Description of the Business
Location of the Business
Cover Marketing Analysis
Business Image and Packaging
Public Relations and Advertising
Books, Records, Controls
Record Keeping Checklist
Other Operational Controls
Sources and Applications of Funding
Capital Equipment List
Break Even Analysis
Monthly Cash Flow Projections
Notes of Explanation
For an Existing Business
Historical Financial Reports
Balance Sheets for Past Three Years
Personal Resumes and Financial Statements
Letters of Reference
Letters of Intent
Copies of Leases, Contracts, Legal Documents
When analyzing individual products or services that are going direct to market, an incredibly useful tool is the one page business plan. This style of product or service analysis delves into the micro of what you are planning to offer through your business. It helps you determine your product and services direct from your market research. This is used then to roll into the macro of your larger business plan. It can also serve as a bare bones business plan, provided you are self-funding. Remember, as we mentioned previously, if you are seeking financing or investing, those entities still want to see the more traditional long form business plan.There are many different branded names for one page plans: Business Model Canvas, LEAN Canvas, and so forth. The sources mentioned before have samples you can use. Below is a great generic sample to show you the elements of the tool. It can be downloaded from bplans.com.