Friday, November 30, 2012

Small Business Examination Friday: Beginnings



Small Business Examination Friday: Beginnings

This Friday, and for the following Fridays up to January, I will start to talk about small businesses as they begin and prosper. This guide is designed for the reader to understand that even with this, a small business or franchise is a lot of work and motivation.  Most individuals create a business or franchise because they have a dream of having a successful business.  As crazy as that sounds, most true entrepreneurs aren’t too worried about the money, because they understand that a successful product begets money automatically.

Today’s Friday starts us at the beginning of a small business adventure. You are interested in developing a small business but have no idea how to get started. The first thing you’ll need to do is ask yourself a few questions:

Do you have a business plan with exactly what your short term and long term goals are?

Do I need a loan for this business or can I do this on my own?

Do I have all the capabilities of advertising for myself or will I need help?

If something happens and a catastrophe strikes, will I be able to recover?

These are extremely important questions to ask yourself, because the way you pave your business needs to be with expecting the worst case scenarios. I’ll go through each question one at a time and we’ll go over the scenarios.

Do I need a loan for this business or can I do this on my own?

Consequently, this is a road block that hits individuals who may be good entrepreneurs but simply don’t have the credit to get themselves a loan all the time. Most 401k’s that are paid into because of a full time or part time job can be borrowed from, and repaid regardless of your credit history. This way, if you’re 18-20 years of age, and pay into your 401k for 10 years, you could set yourself up with running a small business by the time you are in your early 30’s. 

You will also need a business plan, as a bank or small institution needs to see some sort of paperwork or documentation that you took the time and effort thinking thoroughly about your business.

Do you have a business plan with exactly what your short term and long term goals are?

Business Plans are a packet of information that has any research, information, and costs associated with your business. This packet is very important for the creation of your business, because it will be necessary for the bank to take a look at it and make a determination as to whether or not they trust your judgment. I highly suggest reading more on business plans and taking a look at a few guides that point out the top 10 do’s and don’ts of business plans.


Do I have all the capabilities of advertising for myself or will I need help?

       Small businesses suffer from lack of advertising, and as such not only cause headaches but dismay. Imagine, what if you could make cupcakes better then every individual in the area, but you lacked the resources to tell everyone? Crowds will  flock to Wal-Mart to buy their cupcakes that they have for the sake of its customers and your gourmet cupcakes will sit on your window, collecting dust and no revenue. Make sure to do research in the creation of a professional Facebook page, eventual web site, and things like Google ad-words and Facebook advertising. Without social media advertising, with updates weekly if not daily, your business will be doomed to fail.
If something happens and a catastrophe strikes, will I be able to recover?

       If you owned your cupcake business and one of the machines went down, would you have the money or the capabilities of fixing the machine? A common mistake with entrepreneurs is a failure to borrow enough money to cover the “what ifs”. Common mistakes like this could spell disaster in a huge scale, especially if plans were made prior. Imagine a situation where you made a deal with a local school to make cupcakes for the PTA. 2 days before the beginning of the baking, your machine shorts out, and you find out its 500 dollars to fix. You simply don’t have the money because this turned into an interrupted expense. Now, the PTA that you planned on impressing and doing advertising for will feel that the business is lackluster and in 6 months, lose out on over a thousand dollars worth of customers because of the blunder.

       Next Friday, we will move on from here to the development of a product, more on social media marketing, and research and development! Until then, happy entrepreneuring!

       If you have any suggestions as to information you are curious about or suggestions for examination Friday, don’t hesitate to e-mail me at Theodore.holten@yahoo.com with any questions, comments, or concerns!

       Theodore Holten is a Business major with an associate degree in business administration. Ted has been in the business of turning around small businesses using innovation and technology for the past 4 years.

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