Are you raring to be the next big business story? Every good story needs a great start, and we show you just how to kick off your venture on the right foot with this guide. Look for the “action words” below to get your entrepreneurial dream going.
If there is one important thing about starting a business, it’s starting one that actually matters. And in starting one, it’s the entrepreneur that matters.
“Anyone can start any business as long as he is ready—emotionally, intellectually, financially, and most of all, strategically,” says Ian del Carmen, president of the Internet marketing firm Fireball Group.
That is the big question, isn’t it? So are you ready? To find out the answer to that, we need to ask you more questions:
1. Do you enjoy making decisions and being in charge?
2. Do you have the willingness to take initiative?
3. Do you have enough money saved up to start your business?
4. Do you have good credit rating?
5. Do you have strong people skills?
6. Are you flexible, and can adapt to changing circumstances?
7. Are you good at short-range and long-term planning?
8. Are you willing to take calculated risks?
9. Are you good at following through on your ideas, plans, and projects?
10. Will you be starting a business that really interests you?
Positively answering all these is a good indicator that you’re probably ready to take the plunge. But before setting up shop and putting in long hours, understand that starting a business takes as much gray matter as elbow grease.
Armando Bartolome, a noted franchising consultant and president of GMB Franchise Developers, says: “Starting a business does not depend on perfect timing. What is required is for an entrepreneur to have established a business concept and written down a business plan.”
Latching onto the current business craze may be a good idea, but think about how many others will think the same way. Beware, the business “bubble” might burst soon after you hop in.
Factors like the size of your target market and the number of “players” (other businesses) in the area are some things to consider. Del Carmen puts it this way: “Do your research. Your amazing idea might not be the perfect business for you. Find a market first before creating a product, not the other way around.”
Research methods abound, but what matters most is that you know what you’re looking for. For starters, you need to familiarize yourself with demographics (age, gender, religion, family size, and educational attainment, among others, of your target market), your geography, and the behavior of your target market (your customers’ preferences and knowledge about your product or service).
Use interviews, surveys, public and online information to flesh out the details. Focus your efforts on narrowly defined segments where there are few competitors but a small and profitable segment that you can serve.
After you gather the data, you need to make a plan. One of the more basic tools to get started is the Strengths, Weaknesses, Opportunities and Threats analysis, or SWOT for short.
For strengths and weaknesses, ask yourself:
What are your skills, experiences, and resources?
Is there someone or something that can help you compensate for deficiencies?
Do you have a source of guidance or advice?
Do you have enough capital to begin with, or do you have somewhere to get that capital from?
Do you have a clear idea of what you’re doing?
Do you have the right people?
Can you sell?
Under opportunities and threats, possible questions include:
How will having competitors affect your business?
Do certain rules require you to shell out more money or do extra work for registration, approval, and compliance that you weren’t aware of from the beginning?
Use the SWOT analysis to build on your strengths, overcome your weaknesses, grab opportunities, and anticipate the threats to your business.
With buildings, battles, and businesses, it is better to take a good old-fashioned “look before you leap.” A business plan is not a guarantee for success, but having one is a lot better than going in blind. To make the business plan, you need to:
1. Name your business. Of course you want it to be catchy, you need recall. But there are some considerations. The business name should be unique. That means the business hasn’t been registered yet with the Department of Trade and Industry (DTI), SEC (Securities and Exchange Commission), or other government agencies. Names must not be scandalous, refer to anything illegal, be purely generic (a beer company had a problem with this one), and names and styles used by the government in its functions.
2. State your mission. Present your goals in an acronym that teachers know so well—SMART (Simple, Measurable, Accurate, Realistic and Timebound). Simple goals that are met in a reasonable amount of time give the benefit of encouraging the one who set the goals. “Corner the market” is not a SMART goal, “establish three branches in five years” is. Making ideas concrete is a good way to get your investors onboard by showing them you have a solid plan.
3. Introduce the business and its management team. Describe your business lucidly, how you plan to begin and run it. When presenting your plan to investors, you need to introduce the people behind the business, your team, and their capabilities. Like a good résumé, “Jojo is our graphic artist,” isn’t as convincing as “Jojo is the one who laid out the brochure enclosed in this plan.” Include in the plan an overview of the economic environment in which the business will operate, explaining how the team will perform under these conditions. Economic indicators will be needed for an accurate depiction of this overview, and can be referred to in the other sections of the business plan.
4. Elaborate on your product and marketing plan. How do you intend to sell your idea? How will it generate revenues? How reliable is your supply chain? Why are you confident that you’ll get these customers? Write down your sales projections, but don’t be too optimistic about it. Keep in mind that the economic atmosphere, like the weather, can change very quickly.
5. Illustrate your financial strategy. This is usually daunting to new entrepreneurs, but you can get help to map your financial strategies and fiscal policies. These are the expertise of accountants and financial planners who can help you remove the guesswork from this part of the business plan.
6. Write an executive summary. An executive summary provides a condensed version of the business plan, for non-technical people or for those who simply don’t have the time to read the entire document. Piles and piles of data could be overwhelming. Put in what matters in this section, encapsulate what your business is about, and tackle crucial information, key strategies, and important people. It may be physically placed at the first or last part of the business plan.
7. Go over the business plan, give it time to “sit,” and reread it. See which points could be better illustrated graphically, which points could be shortened, and which points need elaboration.
8. Get people to help you. Very soon you’ll need to find help. No matter how small your business is, once it picks up, it will be difficult to do the office work and the legwork (meeting clients, processing papers, etc.) at the same time. Before posting that help-wanted ad, ask yourself: What do you need? For a basic selling business (a stall), you don’t need much except someone you can trust, and who can count money. Product knowledge and customer service is something you can train them about later on.
But if your business is highly technical, like automotive maintenance or desktop publishing, you’ll need very specific and skilled personnel. So ask yourself: do you want fresh grads or seasoned employees?
If you want people who can hit the ground running, those with work experience would be preferable—experience eliminates the need for lengthy training and supervision. On the downside, they might find it difficult to adapt to your work culture, given different work environments in the past. Also, work experience commands high salaries, thus increasing your costs.
On the other hand, fresh graduates are more easily trained to conform to your company culture and standards, and are easier to motivate. In addition, salaries typically given to fresh graduates are more affordable. Of course, rookies require more training and supervision. You must also be ready to put up with errors typically committed by newbies. But if you invest in proper training, the benefits of having workers following your standards will be evident.