Clearly define your business idea and be able to succinctly articulate it. Know your mission.
Develop a personal financial evaluation. Determine your net worth and your annual, personal cash flow needs.
Examine your motives. Make sure that you have a passion for owning a business and for this particular business.
Be willing to commit to the hours, discipline, continuous learning and the frustrations of owning your own business.
Understand that your primary responsibility is the proper use of capital and that you are in business to make a profit.
Test the economics of your product or service. Make sure that it is profitable and that the gross profit percent is in line with that of the industry.
Determine who your customers are, and what their wants or needs are. Know how your product or service satisfies their wants or needs.
Know how customers will buy from you. Plan how you will make your product or service available to them-wholesale, retail, direct or Internet.
Know how you will finance your business. Visit lenders (banks) prior to seeking financing to gather information. Ask your lenders what they will want to see before you apply for a loan.
Conduct a competitive analysis in your market, including products, prices, promotions, advertising, distribution, quality, service, and be aware of the outside influences that effect your business.
Test the reality of your business-know why it will work and how you will make it work. Think your business through step by step.
Write a business plan with a complete financial and marketing plan.
Determine your primary business unit-units sold, customers sold, average order, hours billed, etc. Know what drives your business.
Develop meaningful sales forecasts in terms of basic business units. Predict weekly sales for the first few months and monthly sales for the first year. Consider possible scenarios such as 10percent rise or fall in sales.
Develop realistic financial forecasts for income statements, cash flow, and balance sheets for three years. Forecast monthly for the first year.
Establish an annual operating plan. Review it and update it monthly with appropriate employees.
Carefully select your place of business. Review guidelines for locations on type of business, customer convenience, traffic, safety, etc.
Develop profiles for your products or services, customers, and markets.
Conserve capital. Do not commit cash or capital until necessary. Don't buy services before you need them. Lease instead of buy when possible.
Carefully determine your inventory needs. Don't overstock or get oversold by eager vendors.
Know and utilize your suppliers, including your banker. They can be a great source of training, information and support.
Select the proper business structure for you business. Consider taxes, liability, capital needs, costs, entry and exit. Know the benefits and drawbacks of your legal structure.
Seek help from other small businesses, vendors, professionals, government agencies, employees, trade associations and trade shows. Be alert, ask questions, and visit your local SCORE office!
Advertising is expensive so know why you are advertising and what you want to accomplish. Evaluate your advertising carefully and measure its effectiveness.
Develop appropriate sales promotion tools such as flyers, brochures and signs. Carefully review each item for it's effectiveness and evaluate what these tools say about your business.
Establish an accurate, timely and meaningful accounting and financial system to enable proper management of the business.
Maintain strict separation of personal and business accounts.
Employees are your most important assets, so hire the best, provide training and growth opportunities, and recognize good performance.
Examine your own skills carefully. Know your own strengths and weaknesses and hire to compliment your skills not duplicate.
Have a meaningful, concise, realistic job description for each employee. Make sure you review it with the employee and that it is understood.
Be sure employees know what is expected of them. Establish high standards of performance and morality but be realistic and practical and communicate effectively.
Instill and practice the concept of continuous quality improvement and quality customer service as a way of life in your business.
Study your business and stay abreast of what's going on in your industry. Read newspapers, periodicals, trade journals, etc.
Get involved in your community. Join the Chamber of Commerce, business organizations, service clubs, and charities. Network yourself and keep your antennae up.
Allow three to four hours every week for thinking and planning. Do not allow anything to interfere with this time. You run the business. Don't let it run you.
