Tweet

The 7 Basic Rules Business Start-Up Tool Kit

Written by: Jim Kayalar

Article Overview: Starting a business? Here is a short list of the kind of questions that you need to ask yourself before setting out on starting up your own business. Nobody starts out a new business venture with the aim of being unsuccessful. And yet: It has been statistically proven that four out of five business start-ups will close their doors within five years time. Yet every year hundreds of thousands of individuals venture out to do “their own thing” The short list of questions below will prepare you for what’s awaiting you around the corner when you set out on your own.

The 7 Basic Rules Business Start-Up Tool Kit

The 7 Basic Rules Business Start-Up Tool Kit

Starting a business? Here is a short list of the kind of questions that you need to ask yourself before setting out on starting up your own business.

Nobody starts out a new business venture with the aim of being unsuccessful. And yet:

It has been statistically proven that four out of five business start-ups will close their doors within five years time. Yet every year hundreds of thousands of individuals venture out to do “their own thing”

The short list of questions below will prepare you for what’s awaiting you around the corner when you set out on your own.

Rule 1: Business owners must chose the right business, right from the start. Otherwise you will spend valuable time and money trying to figure out what business is right for you.

The most important question is “who are you and what can you do?”

A man weighing 300 pounds cannot run a hundred yards faster than a 150 pound man can.

A 150 pound man cannot lift as heavy as a 300 pound man can.

A 60 year old cannot climb a tree as well as a 12 year old, and a 12 year old cannot solve cross word puzzles as well as a 60 year old.

So “who are you and what can you do?”

Please be honest with yourself. The more honest you are with yourself at this stage, the easier it will be to be chose the right kind of business and increase your chances of success.

An accountant might not be as good in changing oil as a former machine tools worker would be.

The former machine tool worker might not be as good with numbers as the accountant would be.

Rule 2: The truth is, we all have certain capabilities and learnt skills. If we concentrate on what we know best, do best, and what we like to do best, we have already come very close to succeeding.

Find out who you are and what you can do. The best way is to start asking people who know you well. They usually will tell you all about your good sides. Next, talk to somebody whom you don’t know, like a business adviser or a management consultant. Tell them about your plans, your background and your business experience. Ask them to do strengths and weakness analysis about you and your planned business to determine a “fit” and possible opportunities and threats to your business.

Clarify the following questions, before starting your formal business planning process

1. Product or Service
• Have you clearly defined your business?
• What differentiates your product or service from your competitors?

2. Your Personal Needs
• How long can you survive financially?
• Are you ready to work long hours and weekends?
• Will your family support your decision?

3. Your Business’s Industry
• Do you know the cyclical/seasonal nature of the economy, the industry and your market and how these things can affect your business?

4. Marketing Issues
• Are there buyers out there who would be willing to part with their money to purchase your product/service?
• What do buyers pay for in your market: price, quality, or convenience levels?

5. The Competition
• Do you know who your competitors are?
• How does your business measure against the competition?

6. Your Finances?
• Where will your start-up funding come from?
• Are you aware of how much time it will take before you start to turn a profit?
• Are you aware of how your business structure is taxed?

7. Employment Issues
• Will you need to hire employees?
• Have you written a clear set of company policy and procedures for your employees?

8. Insurance
• Do you know what kind of property coverage your business will need?

9. Location
• Does your product or service require specific location needs?
• Can the area support a business like the one you propose?


Rule 3: If you can’t answer the questions above, don’t start your business. Find somebody that can help you answer these questions.

Rule 4: Just don’t ask one person. There are lots of people out there who can’t tell right from wrong. Talk to your banker, talk to somebody at the SBA, talk to SCORE advisers.
All of this advice is free.

Rule 5: Do research on the internet. Use search engines like Google and Yahoo to look for free online articles about setting up a business, and how to write business plans.

You might have heard of the term “paralysis by analyses”. Don’t overdo it. There is no need to for you to prepare an overly detailed business plan and over commit on time and money.

But a business plan will be necessary, especially if you will need to bring in outside investors or get financing from a bank.

Rule 6: Unless you really want to, don’t go splurging on expensive business planning software. They are costly; you will need to spend time to learn how to use the software and most of them just do what spreadsheet programs like Microsoft Excel do.

Rule 7: The final and most important rule! Be realistic. Downsize your business success expectations by at least a half. After you have sold to your family, friends, relatives, colleagues, you will need to sell to total strangers that could care less with whom they do business. Unless you are able to sell and generate repeat sales from total strangers, your business will not make it. That means the following:

Rule 7.5: Your business concept, whether it is selling goods or services has to be sound. You need to do whatever you are doing in the most competitive way that you are capable of. If your capabilities compare to the present market contenders you will be moderately successful. If you can surpass the present market contenders based on how you do things,
and if there is a market for what you are doing, you will be successful. Its that simple.

Rule 7.75: Simple is good. Don’t complicate things. Simple is good.

Related Articles
  Passive-Aggressive Behavior Is Useless In A Startup
  StartUp Costs
  Breakeven Analysis
  Finance Start-Up
  Fantastic Post By Calacanis On How To Get PR

Article Tags:



Related Forum Posts
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
How She Does It - Interesting to see what are the most popular threads in this folder, judging by how many hits each thread gets. There must be a lot of moms out there who want to start businesses. I'm currently reading How She Does It: How Women Entrepreneurs are Changing the Rules of Business Success, by Margaret Heffernan. Some interesting statistics: Between 1997 and 2006, privately held businesses owned by women grew at 3 times the rate of all American privately owned firms, women's companies are creating jobs and growing profits at twice the rate of all firms and are responsible for more payroll than all of the Fortune 500 companies combined. This book tells the stories of a few women who have made it big...recommended reading so you know that "you can do it, too."
Re: What newsletter program to use? - Just did a quick review of GetResponse and v6.0 is impressive! but you should go with the Premium package which is $10 more than the Basic package per month. Does anyone know if they require Opt-in confirmation on imported contacts? I noticed they also include video emails and twitter integration. Nice product offering.
Wow! - Wow, this comes in as a close second to one of the best resources listed on EC.com. The first for me was the free Camtasia Tool.
Contingency Planning and Disaster Recovery: A Small Business - Contingency Planning and Disaster Recovery: A Small Business Guide Donna R. Childs, Stefan Dietrich 2002 "Among the countless tragic lessons of 9/11, an overlooked but important discovery was the lack of preparedness among small and midsized businesses for responding to disaster. While most of the media attention was naturally devoted to...., the very existence of thousands of small businesses was determined by whether or not they had adequate insurance, sufficient technological support, and viable disaster contingency plans." (People who live in hurricane prone areas need this as well...and who knows when a fire might not strike...) Table of Contents 1. Preparation 2. Response 3. Recovery 4. SAmple IT Solutions Basic safety practices Okay, the TOC isn't [i:2fu76idt]too [/i:2fu76idt]helpful, but there's lots of valuable info in this book, as to ensure that [i:2fu76idt]your [/i:2fu76idt]losses won't be catastrophic. How people cope with suddenly seeing their homes and all their possessions gone, what kinds of insurance to get, etc. etc.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Marketing & Sales tools – going back to basics

The new marketing question. Will they follow?

How do you keep it together on a daily basis?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.