Starting a small business.[check] This checklist is designed to help those who are considering setting up their own business. Starting a small business forms part of the Chartered Management Institute's Small Business Checklist Series. See related checklists for other titles of potential interest. Definition There are many definitions of a 'small business'. They are more relevant to business statisticians Statisticians or people who made notable contributions to the theories of statistics, or related aspects of probability, or machine learning: A to E
adj. Desiring, attempting, or professing to be: "Would-be home buyers will have a somewhat easier time getting loans" Wall Street Journal. entrepreneurs. Anyone who is starting a business will be involved in a small business. By the time the size of the business reaches any of the dimensions commonly used--such as number of employees, turnover, or balance sheet total--the owner's problems will not be those of starting a business, but those of sustaining its existence and growth. However, over 96% of businesses in the United Kingdom have a turnover of less than 1 million [pounds sterling] and 93% of all businesses employ fewer than 10 people. These figures should offer would-be entrepreneurs some encouragement--they will not be alone. Benefits of starting your own business Benefits include: * having control over what you do and how you do it * achieving self-determination self-determination Process by which a group of people, usually possessing a degree of political consciousness, form their own state and government. The idea evolved as a byproduct of nationalism. as your own boss' * gaining independence and freedom from the authority of others * enjoying the satisfaction of making a success of your own endeavours * using your energy to promote your interests--not those of others. Drawbacks of starting your own business * You will be taking risks with your own, or borrowed, capital. * You will be working long hours. * The responsibility of success or failure will rest with you and you alone. * All the functions of the business, such as 'Accounts', 'Marketing', 'Planning' and 'Personnel' are all your responsibility. * You will not enjoy the security of paid employment. Action checklist 1. Consider why you want to be self-employed self-em·ployed adj. Earning one's livelihood directly from one's own trade or business rather than as an employee of another. self Ask yourself: * why you want to change your status * if you should be seeking (alternative) paid employment * if you want to work long, perhaps lonely, hours * if you have the support of your family or partner * if they understand the risks you will be taking * if you will be able to work at and from home, if necessary * which skills you have that may add value to products or services * if you have the stamina Stamina Staying power, endurance. Mentioned in: Tai Chi to keep going in the face of difficulties * if friends and associates regard you as resilient See resiliency. * you enjoy good health * if you really do have something to offer which people will pay for. 2. List your assets and liabilities Your business will require capital. Whether you can afford it with or without borrowing will depend on your existing assets. What is the value of your house, life assurance policies, material possessions, shares, savings or any other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. ? Similarly, what is the extent of your financial commitments over the next 3-5 years? Have you considered everything? What overheads do you need to cover and what liabilities need to be accounted for? Can your assets be turned into cash? How much cash can you put on the table? Talk it over with your bank manager even at this preliminary stage. 3. Ask yourself what you want to get out of your own business What are you really looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. ? Freedom? Fortune? A chance to leave the City behind? Opportunities to travel, to meet people, or to develop a 'pet idea'? Less responsibility? Are your motives positive, i.e. to achieve something, or negative, i.e. to get away from something? Set your requirements down on paper, be realistic. Are you really likely to achieve them, or are you 'pipe-dreaming'? Discuss this with a friend. 4. Consider what type of products or services you intend to deliver The clearer your focus, the sooner you will be able to start detailed planning. If you don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. have a clear idea, the following pointers may help: * Be cautious about becoming 'a consultant'. Do you have the necessary expertise? Don't be misled mis·led v. Past tense and past participle of mislead. by books purporting to tell you how to make a fortune at it. * Find out if there are any local opportunities in tourism or leisure. * Identify what goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. large companies, local authorities and other public bodies buy in from outside the area. * Research the possibility of selling goods made by others. * Consider how you could improve on someone else's ideas, or go into partnership with them. If you try this approach alone, beware be·ware v. be·wared, be·war·ing, be·wares v.tr. To be on guard against; be cautious of: "Beware the ides of March" Shakespeare. v. of the law of patents. * Monitor the local newspapers--opportunities arise from the most unexpected and unusual situations. * Check changes in legislation which might offer business opportunities of which you may be able to take advantage. * Consider advertising--anonymously--your availability to invest in, and share in the management of, a small business which is undercapitalised undercapitalised adj → descapitalizado . 5. Investigate the market for your product or service * What is your product or service? * What unusual goods and services are required locally? * Who will buy your product or service? * Why should they buy yours and not someone else's? * How many people will buy your product or service? * Is it unique or are there many like it? * Is the market stable, growing or shrinking? * How many competitors would you have? * How price-sensitive are products and services like yours? 6. Decide the ideal status of the business you wish to start You may wish to become a Sole Trader 1. A feme sole trader. sole trader n (COMM) → comerciante m/f exclusivo/a sole trader n (Comm) → chef m operating alone and responsible for all aspects of the business, including all taxes, debts, and day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. running of the business. An alternative is to enter into a Partnership, combining the skills and experience of two or more people. Work loads can be shared and operations can be managed more flexibly. Beware of inviting 'friends' to join you in a proposed partnership, for friendship's sake. Would they make good businessmen? Do you respect their judgement? What would they 'bring to the party'? Look for a partner whose strengths complement yours. Business relationships depend upon a balance of skills. Satisfy yourself--and your proposed partner--that you are compatible. Franchising is an increasingly popular and easy way of getting into your own business. You invest in a new 'branch' of a business already established. You will get considerable support from the initiator of the business with all the advantages of a proven product or service, but the rewards are limited by the franchise agreement. Make thorough enquiries about any franchise before committing yourself to a contract. See Useful addresses for possible sources of advice. Establishing a Limited Company will restrict your liability but you are strongly advised to consult a solicitor solicitor, in English law, person duly admitted to practice before the supreme court of judicature. He is the agent of the person whose suit he handles, and is distinguished from a barrister, who argues cases before the judge (see attorney). or an accountant before taking this step. Satisfy yourself that the advantages outweigh out·weigh tr.v. out·weighed, out·weigh·ing, out·weighs 1. To weigh more than. 2. To be more significant than; exceed in value or importance: The benefits outweigh the risks. the disadvantages. Networking with business associates is an informal approach to levering advantage. Your business remains under your control but you build relationships with others in the same kind of business to share the costs of marketing and perhaps of delivery. This approach has no legal foundation, unless you enter into specific contracts with associates. It depends upon the trust you build up with your associates. Networking can lead to a wider range of customers and to the growth of your business. You must be prepared, however, to give, as well as to take. 7. Check your own ability to cope with the pressure of running a business Measure yourself against the following criteria (preferably pref·er·a·ble adj. More desirable or worthy than another; preferred: Coffee is preferable to tea, I think. pref on a scale of 1-5): * I am self-disciplined. * I do not let things drift drift, deposit of mixed clay, gravel, sand, and boulders transported and laid down by glaciers. Stratified, or glaciofluvial, drift is carried by waters flowing from the melting ice of a glacier. . * I have the full support of my family. * I can cope under pressure. * I am ready to put in seven days a week if necessary. * I get on well with people and I can motivate them. * I can make quick decisions when they are needed. * I persist when the going gets tough. * I can learn from mistakes and I can take advice. * I am patient and I don't expect quick results. * I am in good health, enthusiastic and aware of the risks. * I have specific aims, including the need to look after myself and my family. If you do not score well on these criteria (a score of at least 3 on every item), take another look at your reasons for wanting to set up your own business. 8. Draw up a business plan The major banks provide advice on drawing up business plans. Consult more than one local branch to see what they can offer. Whether or not you need bank funding, you need a business plan and you can only benefit from a banker's views on the plan which you produce. Dos and don'ts for starting a small business Do * Talk to others who have succeeded but made mistakes before you. * Look at what start-up Start-up The earliest stage of a new business venture. help is available. * Consult an accountant and lawyer before committing yourself irrevocably ir·rev·o·ca·ble adj. Impossible to retract or revoke: an irrevocable decision. ir·rev . * Prepare a business plan in consultation with your bank. Don't * Make any important decisions until you have talked them through with family, friends, advisers, and those who have 'been there already'. * Try to set up a business just because it 'looks like a good idea'. * Overstretch o·ver·stretch v. 1. To stretch one's body or muscles to the point of strain or injury. 2. To stretch or extend over. your financial resources--borrowed money has to be repaid, usually with interest. Useful reading The entrepreneurs book of checklists : 1000 tips to help you start and grow your business Robert Ashton London, Prentice Hall Prentice Hall is a leading educational publisher. It is an imprint of Pearson Education, Inc., based in Upper Saddle River, New Jersey, USA. Prentice Hall publishes print and digital content for the 6-12 and higher education market. History In 1913, law professor Dr. Business, 2004 Good small business guide : how to start and grow your own business London, Bloomsbury, 2003 The which guide to starting your own business Anthony Bailey Anthony Bailey is a British author. Born in 1933 in Portsmouth, Hampshire, United Kingdom, he was evacuated to Dayton, Ohio, in 1940 during World War II. For many years he was a writer for the New Yorker Magazine. Consumers Association London, 2003 A guide to working for yourself 22nd ed Godfrey Golzen and Jonathan Reuvid London, Kogan Page, 2003 Daily Telegraph telegraph, term originally applied to any device or system for distant communication by means of visible or audible signals, now commonly restricted to electrically operated devices. Attempts at long-distance communication date back thousands of years (see signaling). guide to working for yourself 20th ed Godfrey Golzen and Helen Kogan London, Kogan Page, 2000 Useful addresses British Franchise Association Ltd, Thames View, Newtown Road, Henley-on-Thames, Oxon RG9 1HG Tel: +44 1491 578050 www.british-franchise.org Small Business Service Kingsgate House 66-74 Victoria Street London SW1E 6SW Tel: 0207 215 5000 www.sbs.gov.uk Thought Starters * What skills and experience do I have that will help me in my business? * What are my financial commitments, at least for the next 3-5 years? * How realistic am I being? |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion