What is the number one thing to be prepared for when opening up a small business?

Question

Trying to put a business plan together. I wanted some feedback.

Answer 1

Judgment and collection proceedings. Insulate yourself as much as possible to drag out the process. Protect your personal assets. This can be done in a number of ways. Something that you may find more usable to your business plan *snicker*. No, no, I'm sorry. What I meant to say is that one thing you should have plenty of is insurance coverage for fire, robbery, etc.

Answer 2

Developing a realistic business plan is essential to the success of any business, especially a small one.

Start with a sales model. Determine the volume of sales you'll have (quantity) and the price of those sales. It's best to do it by product line - or as low a level of detail as you can. Use the "reasonableness" test to see if it's something you think you can sustain.

Always be conservative. Underestimate sales and overestimate expense.

Then determine your cost of the above sales to arrive at your margin. Then look at operating expenses (rent, phone, utilities, advertising, payroll, etc.). Consider your capital expenses (leasehold improvements, financing, etc.). How much inventory will you need?

Use a spreadsheet program and model it with different levels to see how changes affect the bottom line.

Answer 3

Just to share my experience; There is no 1 single important factor. They are all important. You will need minimum 6 months operating expenses. For newbies, limited partnerships or limited liability companies should be the preferred set-up. You should at least have 1 staff or partner because you will need someone to take care of paper work if you are doing the sales and vice versa. 1 man set-ups are hard to grow.

Answer 4

Running out of working capital. The answer above is right so you have to budget for running costs for at leats a year. You must also monitor how things are going. If no money is coming after a couple of months think hard about whether you continue.

Answer 5

First of all, If this is your business DO NOT GET EMPLOYIES because then you have to pay employe tax, and all this other stuff.
It is best if you can do this business by yourself.
You will earn more that way, you may have very busy days but the profit is worth it.
Put some signs up or a banner telling about your buiness.

Answer 6

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Answer 7

it depends on what kind of buisness you want to start up. make sure you have your tax papers in order and have a seperate bank account for the buisness. You will also have to put at least 90% of the money you make back into the buisness. and i agree that you will need money enough to last at least one yr. If your buisness makes it past the first yr then you have a fair chance of it lasting 5 yrs.

Answer 8

an instructor i had once told me 1 of every 10 people will cause a problem in your business after 20 yrs of business i believe its more like 2 outta 10 a--hol-- are a real big problem

Answer 9

you need to be sure you have enough money to cover all your expenses for about a year. most people assume that money will start flowing in the day the doors open but that isn't true and most businesses fail because they can't pay thier bills during the first year.

Answer 10

The famous hope for the best but expect the worst makes sense. While we want to be optimistic we also need to prepare for the possibility of losses. There are many successful stories for those who risked it but there are also those who failed. I admire your guts and I think being technically (operational-materials you need), financially (capital/investment), and personally (motivation/focus/drive) prepared will mean you are halfway there. =) best luck!