1. What kind of person makes a successful entrepreneur? |
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics. This checklist can not predict success, but it can give you an idea of whether you will have a head start or a handicap with which to work. How do you measure up? Ask yourself these questions:
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2. How do I determine whether I am capable of starting a business? |
Small business owners have many things in common. Below are some of the qualities you will need to be successful.
Review business journals, trade magazines and other comparative studies that identify the requirements to operate the business. From that information, derive a formula for the skills and traits you plan to incorporate into the business operation. |
3. Why is a business plan important and who should write it? |
A business plan is important because it summarizes both your vision for the company and your blueprint for the company’s operating success. The business plan is a written guide that details the start-up and the future direction of your company.Who should write the plan? You, the entrepreneur. No one else knows your business idea and goals better. Yes, there are services that can do the work for you. However, you must present this business idea to bankers or other investors. Therefore, it is best if you are very familiar and comfortable with the plan.Although there’s no set format, a good business plan typically includes:
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4. If I am not planning to apply for a bank loan, why do I need a business plan? |
The fact that a bank or lending institution requires a well-executed business plan is a secondary consideration. The primary purpose of the business plan is to guide the owner or manager in successfully operating the business. Preparing the plan forces the writer to consider all aspects of the business and to confront any problems the plan highlights.For example, a monthly compilation of all known costs, over time, will indicate the revenue necessary to support these costs, plus a profit. This leads to the question of whether or not this revenue number is reasonable. If not, it may cast doubt on the viability of the venture itself.The business plan is a vital management tool that enables the manager to anticipate situations before they become problems-or worse yet emergencies. |
5. How do I determine my start-up costs and other expenses? |
It is wise to find out what start-up costs you will incur before starting the business. Many a budding entrepreneur takes his or her life savings, or will borrow on the equity on their home before figuring these financial factors, only to find that they don’t have enough money. There are many web sites and other resources (including SCORE offices and Business Information Centers) that provide guidelines and worksheets to help determine costs for your business.Each item on your proposed budget sheet should be researched. Closely estimated costs can be obtained from utility companies, trade associations, shopping and networking with other business people who may have already gone through this experience. Do not start buying until the investigation shows this venture is viable and you have all the information needed. |
6. What do I need to know about financial statements? |
First, you need to know which financial statements are important. They are:
Your accountant can prepare these statements for you from the business data that you supply. There are also a number of computer software programs that will help you generate these statements from your input of regular transactions—such as sales, collections, purchases, payments and payroll. A SCORE counselor can help you understand these statements and may be able to direct you to a workshop on this subject. In addition, most community and business colleges teach courses in financial statement analysis. |
7. Why is it important to do a monthly cash flow analysis? |
Your businesses cash-flow cycle may differ substantially from the income statement projections. Even if the projected income statement shows a profit, it is possible that the cash flow for the same period is actually negative.The analysis of monthly cash flow can indicate whether your business will collect sufficient cash to pay operating expenses. It will point out specific months during the year when the business may experience operating cash shortfalls and, therefore, either require additional capital or excess cash reserves for payment of expenses. It will also show when you may be able to make debt reductions and when there is excess cash to make major purchases or expand operations.By developing a monthly cash flow projection, you can time cash needs and quantify the amount needed. The cash flow projection is an important management tool and must be developed with very realistic expectations. Sufficient cash is critical for a business to pay its expenses and to enable it to expand. If your monthly cash flow projections indicate frequent cash shortfalls, you should review the type of products and services that you offer, the mix of sales, the pricing and terms of the sale and your short-term borrowing needs. |
8. How can I obtain cash to maintain and grow my business? |
Develop a positive business relationship with your bank. Seek your banker’s advice even at times where you are not seeking funds. You may find that every time you go to your bank you speak to a different loan officer, so you should know them all.When the loan officer gets a promotion, you must start all over again with another person. If you want the bank to take an interest in your business, then you have to take an interest in theirs. How?
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9. Why is location the most important aspect of my business? |
A good location can make the difference between a profitable and a bankrupt business. There are many questions to consider when choosing a business site. Use the questions below as a checklist for potential locations and then compare several sites.
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10. Why is competition important? |
No business operates without direct competition. There also may be indirect competition, which has a significant impact on customer’s buying decisions in your market.Direct and non-direct competitors try to convince customers to buy their products or services instead of yours. It is in your best interest to learn more about the companies that are trying to reduce your take-home pay. List the strengths and weaknesses of each competitor. Talk with friends, visit your competition, call for information about their products and analyze how they advertise.Next, take a sheet of paper and list the major competitors. Give each a rating, on a scale of one to 10, for product quality, process, advertising, price and customer satisfaction. You can add other ratings that you feel are important.Your business can become more profitable by adopting practices you admire in competitor operations and by avoiding their mistakes. Some of your competitors have been in business successfully for many years. Certainly, as a new or relatively new business, you can learn a lot from them. |
11. How can I better market my business? |
To market your business, you must define your customer. To maintain consistent sales growth, you must become knowledgeable about your market. Develop an outline of your “typical” consumer:
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12. What makes a successful marketing strategy? |
When creating a marketing strategy, keep in mind the four P’s of marketing:
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13. What do I need to know before creating a marketing brochure? |
A marketing brochure can be long-lasting or short-term. It can represent your business to potential customers and it can be a referral piece for existing customers. Decide the purpose of and goals for the marketing brochure before you begin to design and write. Remember, this brochure represents you and your business; be sure its look and feel complements your business. Here are few tips for when you are ready to begin.
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14. How can I improve customer service in my business? |
Develop a strategy that puts the customer first. Customers will receive the best possible service when employees are empowered to make this happen. This is not to say that you should be lenient with your policies, but have a degree of flexibility. Just remember, a lost customer could spread the word of their discontent, resulting in more lost customers.Review the most common reasons for poor customer service. Use these insights as a way to improve your customer service:
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15. Is there anyone who can answer questions specific to my business? |
SCORE “Counselors to America’s Small Business” provides free and confidential business advice and mentoring services to entrepreneurs nationwide. SCORE is a nonprofit association consisting of 10,500 business counselors who donate their time and business expertise to guide small businesses via face-to-face mentoring or online counseling.SCORE, a resource partner with the U.S. Small Business Administration (SBA), has assisted millions of start-up and growing businesses since 1964.You can visit the SCORE web site and find a wealth of small business information. A popular online service is Email Counseling, which allows you to choose a counselor from a bank of more than 800 SCORE counselors.Using email, your counselor will answer questions, give advice and otherwise provide valuable support—all for free. Also on the SCORE site, you will find articles written by industry experts and successful small business owners. |
Tuesday, March 23, 2010
Top 15 Questions
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