Not all entrepreneurs start their business with a plan, but those who do are statistically more likely to succeed. The failure rate of startup businesses in the US is 50% by year five, so it is very important for people to do their research before taking that risk.
“By failing to prepare, you are preparing to fail.” – Benjamin Franklin
An entrepreneur is a person who undertakes the organization and management of an enterprise, usually with considerable initiative and risk. Just as a scientist starts with a hypothesis and then tests that theory, an entrepreneur begins with an idea and then proves its viability with a business plan.
The research is the most important part. If you have an idea for a business, here are some questions to ask yourself: What product/service will you sell? How much does it cost? Who are your competitors? What makes your product/service different or better? How will people learn about your product/service? Why should they buy it? Who will buy it? How much will they pay for it? Where will your business be located? Will you operate out of your home? Is your neighborhood zoned for that type of business? Will you lease space? How much will it cost to get that space ready? What are your startup costs? Do you have enough cash to start? Do you need a loan or an investor? Will you be the sole proprietor, or will you have a partner(s)? How will you keep track of your revenue and expenses? Is your product/service subject to sales tax? What will happen to your business when you want to retire? In the end, will your business be saleable?
To start, I recommend jotting down all of your ideas. However, it’s wise to arrange your plan into phases. Once you have implemented and mastered the first phase then review, make adjustments, and start the next phase. Some people make the mistake of trying to be everything to everyone. Find a niche and do it well. Figure out what will make money and allow you to grow.
Whether someone starts with a plan or not, they will likely need one when it’s time to seek funding. Most people don’t have all of the money they need in order to start and operate a business. Therefore, they traditionally go to a bank for a commercial loan. If you have ever asked someone for money, the basic questions they will ask are, “How much money do you need?”, “What do you need it for?”, and “How will you pay it back?”. If you don’t have the answers to those questions, you’re not quite ready to ask for a loan. One question I’m commonly asked is whether there are grants for startup businesses. The answer to that question is explained in the February 16, 2017 article, “What grants are available to your business?”
Starting a business isn’t just filing a DBA (Doing Business As) with the County Clerk’s office. That process is similar to writing “The end” on the final page of your business plan and should be one of the last steps you take. One reason is because your research might lead you to a better name for your business. For a DBA, your name must be unique and available within Cayuga County, but a better question is whether or not that business name is available on the World Wide Web. For more insight about naming a business, read the article from June 25, 2015, “What’s in a (business) name?”
It is very important to remember that your business plan is a living document. You should regularly monitor and update it to assure you are on track to meet your goals. It is not just the tool you use in the beginning to get startup funding. There might come a time when you need to seek funding for another phase of your business.
Approximately 20 local entrepreneurs have recently researched their business ideas via the Auburn SCORE’s workshop series: Simple Steps for Starting Your Business. The five-part series helps individuals reach a “go or no-go” decision. Topics include business basics, marketing, accounting, and finding funding. Local professionals present each topic, which allows participants to ask the experts their questions. Participants can also learn from and network with each other. There will be another session of Simple Steps in Spring 2018. Contact the Auburn SCORE Chapter or follow them at facebook.com/SCOREAuburnNY/.
The Cayuga Economic Development Agency and SCORE are just two of the many resources available at 2 State Street to start or grow a business in Cayuga County. When starting a business the entrepreneur takes all of the initiative and risk, but with a solid business plan and the support of our many local resources, we hope they will grow their one job into many!
Maureen Riester is a SCORE mentor and the Cayuga Economic Development Agency’s business development specialist, focusing on bringing new business to Auburn and Cayuga County. She can be contacted at email@example.com or (315) 252-3500.
Published in the October 26, 2017, edition of The Citizen.