Financial Requirements for Starting a Small Business
A Home Business Article Contributed by G. Uma Bennett
Be Clear on Your Financial Requirements for Starting a Small Business
Be careful not to underestimate your financial requirements for starting a new small business. It is important to find necessary business resources and determine sources of capital, equipment, employees, and vendors. Beyond having capital to pay for daily operations, think about what amount of finance will be needed for future growth such as product development, marketing and sales campaigns as well as territory expansion. It is a smart business move to discuss ways with your accountant to secure back-up sources to emergency funds.
How Starting a Small Business Will Affect Your Lifestyle
One area that you may overlook in starting your small business is how your decision will affect your personal life. Whether you are single or married with a family, your decision to own and operate a company will make extra demands on your time. For the sake of keeping peace with your family, this decision needs to be discussed fully so that everyone understands how they will be affected. In some cases it is helpful to involve your family members with active roles in the business so that they will feel invested in the small business process.
Will Your Reasons for Starting a Business Stand the Test of Time?
When you begin looking into starting a business, write down why you decided become an entrepreneur. Your reasons need to be more than just money for your business to have staying power. Think about your business from the standpoint of the return in personal satisfaction, self-development and public service. Operating your own company can give you the opportunity to use abilities that you have neglected, perhaps to transform from analytical work to creative. Keep this list handy at all times; these reasons will motivate you in good times and in bad.
Starting with Financing from an Investment Company
Many entrepreneurs have had success starting a small business with the assistance of an investment company. These companies called Small Business Investment Companies (SBIC), are run by the Small Business Administration agency of the federal government.
Although the application process is lengthy and time-consuming, these business entities exist for the sole purpose of lending money to businesses and offer much more than money, many times they can assist in business plan development and marketing strategy as well. Many of them trade their investment for a percentage of the company they help capitalize, in effect, becoming a partner.
Your First Step to Successfully Starting Your Small Business
Of the many steps that you must take in starting your new small business is to do your homework. The three most important factors in success beside adequate financing are to assess your markets, know who is your competition and look to trends in consumer spending to forecast demand. With the proper preparation, the idea of starting a business in today's economy is both challenging and alluring, but feasible as well. Being prepared with the facts of what your new business make face can help it survive in today's rocky economy.
