A lot of entrepreneurs start their business after they have worked in that industry for someone else or have advanced training in their particular field. When they strike out on their own, they are usually a small business with one or two people in the business, with one of them being the owner. This requires the new business owner to be in the business, selling, collecting, and all those day to day normal work tasks. This gives the owner an appreciation for getting and keeping customers.
It is always best to prepare a business plan before starting any business. The Business Plan will help the owner to keep on track and should include a Marketing Plan, who the potential customers are, A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) and proforma financials. There are formats available and professionals that can help write the plan. This plan is a living document meaning that it should be reviewed and changed as the business changes. This is an excellent time for the owner to work on the business. See what went right and what needs work. All business should look for the problems, rank them and develop a course of action to correct them. As the business grows, the business plan will change with the addition of employees. Managing people requires a whole new skill set. This should be recognized in the business plan. The business plan should contain an in-depth analysis of the competition. This will allow the owner to have a unique offering to his targeted customer base.
Before starting out a new business the owner also needs to line up the advisors/ professionals that all business’s need. These professionals are:
Accountant - to help set up the books and tax advice and preparation.
Banker – for access to capital, loan advise, and cash management.
Attorney – to form the organization and help with all the permitting.
Insurance broker – to make sure the business is adequately protected.
Mentor – to provide advice and guidance. (SCORE can provide free advice to Business Owners)
These professionals are often great to use as a sounding board and a source for new ideas. You can think of them as an ad-hoc board of directors. All these professionals have other contacts in the community that can be useful.
Monthly financials are very important to a new business owner. This is an excellent time to work on the business. These are great questions to ask:
Are we on sales plan?
Is our break-even stile here we thought it was?
What is our cash position and what is forecast for cash?
The owner will find himself doing a balancing between working on and working in the business. Both are equally important to a successful business.