Things to Consider Before You Start Your Business
Sources: Colorado Business Resource Guide & Small Business Development Center (SBDC)
Personal and Financial Considerations
- I am a highly motivated self-starter.
- I have the emotional stability to deal with the stress of being a business owner.
- I have all of the practical experience and skills required for success in my own business.
- I am financially positioned to leave my current employment. In other words, I have savings to cover my salary for a period of time or I am able to guaranty my business will have enough cash flow to cover my living expenses.
- I have the ability to cover my own health insurance expense.
- I am willing to deal with the possibility of working longer hours for less money until my business becomes profitable.
- My friends and family understand what I’m considering as a business and are they supportive of my commitment.
Basic Start-Up Considerations
- My business concept is feasible.
- I have thoroughly researched the products and/or services I plan to provide.
- I have determined there is a market for my product and/or services and have a sound marketing plan.
- I have identified my competitors and have a sound strategy for dealing with them.
- I have a reputable attorney; accountant, banker, and insurance agent and I have sought and carefully considered their advice.
- I am thoroughly informed about business licensing requirements, zoning issues and tax reporting and payment responsibilities.
- I have thoroughly researched the best business structure for my operation.
- I have thoroughly researched my financing options and am able to access the start-up and operational capital I need.
- I have, or someone I trust has, the organizational and bookkeeping skills to keep my financial and administrative requirements current and accurate.
- I have thoroughly researched location, leasing, and purchasing options.
- I have developed a brand/logo and trade name. I have thoroughly researched my brand/logo, trade name, patents, and/or copyrights in all relevant categories and have registered them in a manner to insure legal protection.
- I have completed a comprehensive business plan that includes:
- Statement of Purpose and Objectives of the Business
- Business Structure
- Definition of the Market Served/Customer Profile
- Description of Products and/or Services
Market Evaluation/Marketing Strategy
- Location of the Business and Map of Competitors
- Advertising and Promotional Programs
- Market Analysis
- Owner/Management Qualifications for all Partners
- Owner/Management and Partner Functions
- Location is Relationship to Ideal Customer Base
- Location and Facilities Requirements
- Staffing Requirements/Organization Chart
- Training Requirements/Initial and On-Going
- 1st Year Financial Analysis
- 1-5 Year Profit/Loss Projections
- Breakdown of Start-Up Costs and Capital Expenditures
- Primary Areas of Risk and Viable Solutions
- Identification of Potential Business Difficulties and Viable Solutions
Partnership and Investor Considerations
- My partner(s) and I have complementary skills and compatible personalities.
- My partner(s) and I have a written understanding of our place in the organizational structure and our respective responsibilities.
- My partner(s) and I have a well-drafted and legally binding partnership agreement that includes and “buyout” clause.
- The partner(s) buyout agreement is funded (e.g. escrow funds, whole life insurance, etc.)
- My investor(s) and I have a well-drafted and legally binding agreement.
- I am able to provide current and accurate financial information to my partners and investors.