By: Amanda FrazierWhen starting a new business you must consider the fact that you needan executable plan.
Better known to most people as a business plan. Abusiness plan takes all the aspects of starting a business and identifieswhat it is exactly that you business is. A business plan will help you seeahead-unforeseen problems, how to make good business decisions, and gainand manage resources for products or services needed. Other things thatmight appear on a business plan are funding, credits from your suppliers,marketing, and possible growth in the future.
Some sources for funding a new business would include credit fromyour suppliers, loans, personal savings, friends and family, and evengrants. If you decide that a loan is the best way to start you business youbetter have a solid business plan to present to potential lenders. Thereare two types of financing that are available to people trying to start abusiness on a loan. The first is equity to debt, if you have a high ratioof equity to debt, you should consider debt financing.
On the flip side ifyou have more debt than equity you should increase the amount you havepersonally invested and consider waiting on a loan. You could alwaysconsider angel investors and venture capital firms. These firms have beenset up so that they may invest in your business but in doing so own a partof your business or in exchange for the equity your business has. Some of the legalities a new business may face include licensesand/or permits. Most states will require that a new business becomesregistered with a business name, and if a service is being performed youmay have to acquire permits through out the life of you business.
You mayalso have to comply with business laws and regulations. These may includechoosing the correct business structure to zoning codes. When a smallbusiness gets into a crisis it is very important to know the laws andregulations for the area and you may have to go as far as hiring a lawyer. When you are choosing the correct business structure for yourbusiness you have to consider several aspects. For instance, if you are amarried couple trying to start a business, will it be a sole proprietorshipunder one person’s identity or will you go with a partnership. If youdecide to become a partnership where you both are investing time and moneythen you should consider the following.
How is the business going to beran? Well if it is a general partnership where you both divide themanagement and responsibility then you should use that. But if it is goingto be a trouble to your marriage then maybe you should consider puttingsome aspects of the responsibilities and management and profits in acontract. In this case you would still be a general partnership but wouldhave a contract that would outline how certain circumstances would behandled and keep you from fighting on a regular basis and the business fromfailing. When thinking of starting a business, consider everything. Willfunding and loans be a problem? Will marketing aspects cause you to obtainmore competition that you are ready for? Or will the family business be agood idea based on you marital liabilities? Will there be enough demand forthe product or service that you will be providing? When these questions canbe answered with no problems or arguments then sit down and draw up yourbusiness plan.
Once that is done you are on your way to creating a newworld or discovery and profit.
