Business 101

Quick Start Guide To Starting Your Business
By: Sarah Truglio

So, you have an idea and you want to start your own business, where do you start?

Your local Small Business Development Center is a great resource to help get you started. Below are some basic guidelines to prepare yourself for starting your own business.

  1. Identify & examine your motivation for business ownership

The first and often most overlooked step is, ask yourself why you want to own your own business? Perform a self-analysis. Identify your reasons, is it freedom from 9-5 daily work routine? or improving your standard of living? List all the reasons that apply to you.

  2. Choose a business suitable for you

Going into business requires certain personal characteristics, decide what role you will have in the business. Are you a leader and enjoy making decisions or do you prefer to be the planner and people person? What personal skills and experience will you bring to the business? Summarize the strengths, skills and experience you have and what skills and experience you think are needed to make your business successful. Understanding your personal characteristics, the required skills and demands of business ownership are critical in helping you determine the business that is best suited for you.

  3. Finding a niche

Small businesses will range in size and function, the knowledge and skills required will vary. Every successful business has one thing in common, they have found a niche in the market to fill. A crucial problem most businesses will face in the early planning stage is to find YOUR niche and determine the feasibility of your idea/product or service. Many entrepreneurs plunge into a business without thoroughly evaluating the businesses potential. A good feasibility evaluation will include a detailed examination of financial, personal and market realities.

   4. Startup requirements

• Research legal forms of a business entity and determine which business structure will be best suited for your business, an Attorney and or CPA can assist you with this process.
• Learn which permits, licenses, rules and regulations are required.
• Determine the types of records you will need to keep for local, state and federal tax purposes and what types of recordkeeping and internal control systems you will need to setup.
• Study your professional needs; Legal, banking, accounting & taxes, insurance, and marketing

  5. Write a business plan

A business plan is the best tool you can have to start, run & grow your business. Business planning is the process through which you research, analyze and understand your business and goals.  A successful plan will consist of the following;

• Executive Summary

• Business Description
• Management & Operations
• Marketing (including industry overview, target market, competition, product/service, promotion, pricing & business placement)
• Financials (including, financial assumptions, startup expenses, source of capital, use of funds and collateral, cash flow, income statements and balance sheets).
• Appendix items (such as credit report, business license, copies of leases & contracts)
  

   6. Startup costs & financing
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Once you have completed your research & have written your business plan, determine what the startup costs for your business will be, such as licensing, insurance, rent, equipment, advertising etc. How will you pay for these startup costs? Most small businesses are started with money from personal savings, borrowing from friends & family, and microloans. Obtaining a business loan from a commercial lender will require a strong business plan with good financial projections. Generally business loans will require a certain percentage of owner’s contribution or personal investment, a good rule of thumb is 20% or more of the startup costs depending on the amount you are borrowing and the terms of the loan.

  7. Finalize all startup requirements

Congratulations! You have completed your business planning and acquired the funding you need to start your business. Now it is time to hire your employees, open a business bank account, sign lease agreements, apply for permits, licenses and hang your OPEN sign in the window.
 
To get a step by step New Business Checklist – Starting a Business in Washington State, contact your local Small Business Development Center at 509-575-1140.