Get Smart Before You Start A New Business (Part-02) The Research Stage

I have already written a number of real estate and business articles covering a wide range of topics and you can access these articles by clicking article reference link at the bottom of this page. The link will take you to a menu of my articles here at EzineArticles.com, which you can scroll through for additional information related to your particular project. This article will cover the preliminary checklist you need to consider before spending or investing any money on a business. This article assumes you are starting a business from scratch and not buying an existing business or franchise.

If you are thinking of starting a business from scratch, here is a suggested order of approach:

1. Invest in at least five (5) (or more) 8.5 x 11 spiral notebooks and some pens and pencils and title them “The Business” “Management”, “Marketing”, “Finance & Legal” and “General Ideas”. You want to keep your thoughts organized by topic and write them down (all of them) as they flow into your thinking–this way you won’t lose them and this will build the data for your business plan. This is a very important step.

2. Gather as much information as possible from the Internet or the local library about the general industry sector you intend to operate. (E.g. manufacturing, distribution, retail or service). Are there sources of raw supplies for your business? Make notes on everything good and bad.

3. Search the net for businesses like the one you are thinking about to determine if there are similar businesses and what the level of competition is. Also check the Thomas Register at http://www.thomasnet.com/ for businesses, products and services. From information gleamed from research, request information packages from the competition in order to perform a competitive study (see my article on professional competition analysis). Make notes on everything good and bad.

4. As you research, take note of the things you see that you think are innovative and you could use in your business. Make a determination of the things you will need to compete on a level playing ground. Will you need a website? Will you need a storefront? An office? Will you be based at home? Is there a place that is quiet that you take and receive phone calls without being disturbed? Make notes on everything good and bad.

5. Start to make a list of all the tools, equipment and supplies you will need for your business. Price these products and estimate how much they will cost. Do you have enough money to support these acquisitions? Can you borrow the money (not a good idea) what other ways can you get the supplies that you need (try Ebay). The key: itemize everything, get price estimates and think about this over the short term. Make notes on everything.

6. Carefully consider the systems you will need to run your business including office equipment (phones, computer, printer, fax machine, scanner, software, production equipment, tools, etc. Further consider letterhead, business cards, stationary, and how you will handle inbound/outbound communications. Make notes on everything.

7. From your notes, begin to outline your business plan. This is a rough draft and cover areas like the business, management, the market, sales pro forma projections, etc. You can go to the SBA online and download business plan outlines or you can get business planing ebooks at our website. In either case, get references for creating a business plan. Start to develop a business plan whether you are ready or not. A business plan will take on a life of its own as soon as you begin to develop one. You may run into snags and roadblocks but as you gather more information the plan will start to come together… eventually, you will see the business more clearly over time.

8. Read books about business from authors whom are in business. Typically, those who teach can’t. In other words, if college professors were so knowledgeable about business, they would be out making a million bucks and not teaching, right? A book that I highly recommend to anybody contemplating setting up a business is Think and Grow Rich, By Napoleon Hill. (See my article Think & Grow Rich, What Every Entrepreneur Should Know) The book is a great read and will blow you away with excitement. It costs like $5 for a paper back version and it’s well worth it, trust me on this one….

The key here is to get educated about the business you are thinking about. The chance that you have originated at absolutely unique idea is highly unlikely. That’s why you want to research EVERYTHING before doing ANYTHING. You want to think as clearly as possible about what you are doing (see my article The Power of the 5WH Formula) it shows you how to ask the questions you need to ask to get the answers you need for effective decision making.

Does this article sound like a lot of work? Aha! You haven’t seen anything yet! Many people dream about owning their own business but have no idea of the sacrifice that is paid to just begin intelligently. And really, your business will be built on the foundation of your mind and knowledge base. If you lack business intelligence now, and you refuse to gather intelligence, your business will be retarded and it will fail. Give your business a fighting chance and get Smart before you start!

To your success!

Copyright © 2006 James W. Hart, IV