Friday, September 26, 2008

Steps to forming a business of your own

If you want to be an entrepreneur, welcome to the crowd. Every month there are thousands of people creating new businesses around the country but to start a business can be a complicating, risky effort. Only about 60% of these businessmen survive for 2 years and less than 50% of them survive for at least 4 years, according to a study by the U.S. Small business Association.

A typical business setup will include the following considerations. However, you can always look for a business consultant or an online free advice on how to prepare for it :

1. Am I an entrepreneur or businessman ? or a Wannabe ?

• To have a successful business, you need a certain set of characteristics. You must be willing to take calculated risks, be optimistic, and enthusiasm

• You must be prepared to play many roles i.e. Being a chairman of the company but still willing to fix the toilet when its broke.

2. Which business is suitable for me ?

• There are lots of ways to find a business idea. You can read about it on Newspaper, Magazines, Internet surfing or Forums. But for most people, they begin with their interest first.

• Back in 1989, when I found out that I was really interested in computer servicing while working as a Salesman, I left the company and started a business that provides Computer Servicing for companies that need to outsource their personal computers or monitors for repair.

3. Is the business still viable in the market ?

• Find out if the business is still viable by talking to potential customers, suppiers and distributors. You can even attend Trade-show or Seminar to guage if the cake is still hot. You are merely exploring the opportunity.

• If you have a product at hand, make some tiny sales in fair or local outlets to get feedback, good or bad, so that you can fine tune your business concept or other matters.

4. Write a business plan.

No business can proceed without a game plan !. It should describe why and how you want the business to be carried out and by when will it be consider successful.

• It address concern such as : What kind of product or service am I providing? Who is my potential customers ? How can I make money out of it ?

• A plan can be fine tune as many times along the way so that it keeps the company growing in the projected direction.

5. How much do I need to start a business ?

• Most entrepreneurs start their business with the savings they have, or they also loan some funds from their family and friends.

• You also can get a loan with a bank provided you have assets e.g. your home and a very sound business proposal plan.

• The best advice is always to start small, and slowing building it up along the way.

6. What choice of business do I have ?

• For detailed business choices, you might want to read my September 24th post.

• The most basic choices are Sole-proprietor, Partnership and Private Limited. Each offers different legal protections, tax savings and ownership requirements.

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