Ten things to ask yourself before you start a business

Step One: The Idea
Before you start a business, you need a good idea…Let's face it, the single most important step in creating a business is the idea. After all, a good idea can make a company millions or even billions of dollars, while a bad idea can lead it to bankruptcy. And without an idea, you can't create a business.

So it's time to start brainstorming. Think up that next million-dollar idea. If you're stuck and can't think of anything, here are some questions to ask yourself to help you out a little:
What are my interests?

Get out a sheet of paper and start writing down some things that interest you. Are you good at sports? Do you like managing other people's money? Are you good with computers? Do you like pets?

It always helps if you start a business in a field that interests you. That way when you're spending your time working on it, you'll have so much fun that you don't even think of it as work. For example, I enjoy money-related stuff. But once a week, I'm required to mow our lawn since I'm the "man of the house". Some of the neighbours need their lawns mowed too. However, because it doesn't interest me, I probably shouldn't start my own lawn-mowing business.

If I had some money, what would I buy?

Try to think of something that you think would be cool to buy. It helps if there isn't already something similar out there. If you think something is cool, there is always a chance that others might think so too. But be careful, don't start a business solely on this. Be sure to see if there is actually a demand for it!

What could be improved?

There are a lot of great products out there that aren't quite perfect. They can be improved in some way or another. Do you notice anything in your life that could be improved? Is there a chance you might be able to make a business out of it? If so, you might want to consider that kind of idea.

It helps if you get out a piece of paper and think up a number of ideas. You can then make a few columns on your piece of paper and compare each idea to decide which one you think will be best. Once you've got an idea that sounds good, you'll be ready to proceed to the next step...evaluating the idea.

(YOU ARE NOT SHORT OF IDEAS!!!)

Step Two: Evaluate the Idea
Okay, so now you have an idea...but does it have the potential to become a viable business? Let's face it, not every idea is a good idea. There are so many ideas out there that have sounded good to the businessman at first but we later realize that it wasn't such a great idea. Here are a number of questions to ask yourself in order to save yourself time and money...and avoid embarrassment.
Would you buy it with your own money? Honestly, if you had the money, would you buy whatever you're trying to sell? Be sure to be honest about this because if you wouldn't buy it, you shouldn't sell it. It's important to have confidence in what you are trying to sell to others. Besides, if you aren't willing to buy your own product, chances are that nobody else will.

How much competition is out there?

Are you trying to enter a market that already has a lot of competing businesses? If you are, you should consider doing one of the two following things.
1.) Start over and think up a new idea
2.) Find an "edge" you can have over your competition

If you choose the second one, you'll need to be creative. After all, you'll be vying for the same customers as the other companies so you'll need to find a way to make your product/service stand out. You can do this by comparing all of the similar products and asking yourself "what do these lack and how can I improve on it?"

Can I make money from this?

Lots of entrepreneurs think up a great idea but fail to think whether or not they will be able to earn a profit from it. You'll need to decide how much your product/service will cost to produce and then decide what you think the public would be willing to pay for it. If the price you sell it for is more than what you plan to pay to produce it, continue on with the rest of this section. If not, start all over again.

Ask for someone else's opinion

Find someone you can trust to give his or her honest opinion and ask them what they think of the idea. You can ask your friends and parents but they will likely just say what you want to hear because they want to encourage you. What you need to do is find someone who will be completely honest. Try asking a stranger (if they are willing and don't think it's too weird). This will help you get an idea of what the general public will think of it. If they don't like the idea, ask them what you might be able to do to improve it.

These are just a few of the questions you can ask yourself. Be sure to actually do this step and don't just skip it over. You may come back to regret it later on when you realized you overlooked something simple.

Step Three: Plan Things Out
Ask yourself a few questions in order to get a plan for your business going… Ah, this is yet another important step in the process. Some people really dislike planning out all of the minute details while some (like myself) think that it's one of the best parts about starting a business. Well, whether you enjoy it or not, it's necessary to devote quite a bit of time to doing this. That way when you get the business rolling, you'll have an idea of what you're doing, how much money you'll have to spend on each expense, etc...

Okay, it's time to start putting on those thinking caps and get out something to write with so we can start ironing out the details. In fact, now might be the time to pick up a stack of legal pads at the local Staples or something. Okay, here are some questions you will need to answer:
What exactly is my product?

If you've gotten to this step, you probably already know what your product/service is going to be. But this is the time for you to start giving a lot of thought to it. Is this something that you have a chance of building well? You don't want a product that sounds good in theory but is quite unappealing to look at when you have the finished product. What makes this product/service unique? Am I qualified to be an "expert" in this area? If you're going to be running a business, you should be absolutely certain that you know as much as possible about what you're doing.
Who is my target market?

Okay, imagine that you're the person that you're trying to make a sale to. How old are you? What do you look like? Are you a teenager with money burning a hole in his pocket or are you a conservative adult? Are you a male or a female? It's time for you to start thinking about who exactly you're trying to sell to. This is important because it'll help you decide what approach you'll take to make the sale. If you're selling to kids, you can probably be more informal. But if you're selling to adults and want them to take you seriously, you might have to be a little more formal. So if you've got a shirt and a tie sitting around the house, you might need to put it on to impress them.

What is it costing me and what am I selling it for?

This was mentioned in the last step but it is still very important so we're reiterating the fact that you should go over this. Write down all the different costs you'll have for your business. Figure out what the materials cost if you're manufacturing something. If you're mailing your product to people, be sure to include shipping costs. If you'll be on the phone a lot more, you might want to account for your phone bill.

Once you figure out how much it will cost to run the business, you'll need to start getting idea of what you will charge people for it. Don't ever charge anything more than what you yourself would be willing to pay for it. Figure out a price that is reasonable for your target market. If they're teenagers, you might want to keep the price low.

Now that you have an idea of what it's going to cost and how much you're selling it for, figure out how many you'll need to sell to generate a decent profit. If it's out of reach, you might want to reconsider your idea or simply find a few ways to cut costs.

Step Four: Put it on Paper
Now you're ready to put your plan onto paper in order to present a formal business plan. A business plan is a very useful tool when starting a business. However, a lot of people skip this step. let’s focus on your idea and plans. It's good to have your ideas running freely in your head but it's also important to put something "solid" down on paper. When you do this, it's called "writing a business plan".

What's a business plan and why should I make one? As its name suggests, a business plan is pretty much just a plan for your business. It takes everything you've thought about in the last few steps and ties them together into a few-page report. This plan is basically the outline of what your business is, how you will make money, how you will market it, and some financial projections.

A business plan has many benefits. If you ever find yourself in a hard situation, reflect back to your business plan and you might find an idea that you had forgotten about. It also helps you find investors. By having a copy of your business plan, they can evaluate your idea and decide if they want to invest their money in it. And if you ever change your idea, you can just go back and make a few changes to the business plan.

What should I include in the business plan?

Simply put, you should include everything. But I know that will leave you a little puzzled so here are a few common sections that most business plans include. Granted, you don't need to include all of these but I encourage you to write down as many of your ideas as possible. Here are the various sections:

The 30-second pitch - No matter how complicated your business is, you should be able to explain to someone what your business does in under thirty seconds. After all, if you can't explain what you do to an ordinary person, it'll make running the business very difficult. In this section of the business plan, right down a short description of what you're trying to do and make sure it won't take the reader a long time to go through or leave them confused.

Business Concept - This is a lot like the previous section but feel free to go into more detail about what you're doing.

Marketing Information - This is where you'll explain who you're trying to sell your services to and give a rough outline of how you expect to do this. Will you advertise or depend on word of mouth? Will you be involved with a lot of community-oriented promotions? Include all of your ideas here.

Competition - Although you don't want any competition, pretty much every business faces it. This is where you'll decide who your competition is and why your business is better than theirs. Do you offer something unique? Are your prices cheaper?

Financials - This is the number-crunching part. Figure out how much your product or service will cost and come up with a rough estimate of how many people you think will pay for it. Figure out what kind of costs you will need to get things started and running. Include everything imaginable from office supplies to postage stamps. And when you're estimating how much you expect to make, be conservative

As you're writing all of this down, you'll likely come up with more ideas than you had when you started. And if you decide later on that you want to change the business model, be sure to go back and make some changes to your business plan so that it stays fresh and up to date. You'll be glad you did this once things are up and running.

Step Five: Find Help
It's hard to run a business on your own so you'll probably need a little help… It's nice to be independent and know that you can do things on your own but everybody needs a little help here and there. And if you're running a business, especially if it's your first one, don't be afraid to ask for help from adults, friends, and even complete strangers if you need to. Here are a few ways you can find help from other people:

Find a mentor If you have someone that you look up to and can depend on, you might want to consider having them as a mentor if they are willing to do so. I always suggest that each person starting a business should have someone that they can go to and ask a question every once in a while. Mentors are great in providing guidance and assistance.

There's a few ways to find a mentor. For business-related stuff, you'll probably want to talk to someone with experience in running their own business. Do you know any family friends that own their own business? Ask them if you can sit down and ask them a few questions to get you on the right track.
Get your friends involved

Running a business is much more fun when you like the people you're working with so ask a few of your friends if they'd be interested in helping out. You probably won't have much money to pay them but if they are very serious about it, you could possibly make them your business partners by forming a partnership and giving them a share of the business.

Network, network, network!

One nice thing about running a business is that it allows you to network. You can meet a lot of new people and it really comes in handy if you need a hand down the road. Perhaps you'll find someone who wants to be a part of the business and help out. Or maybe you'll meet another business-owner who would like to partner with your business. For example, he'll help you out if you help him out. It's kind of like the old saying "I'll scratch your back if you scratch mine".

Ok, all aboard the business train...it's time to move on to the next exciting section: structuring your business

Step Six: Structure the Biz
A business has to have its own legal structure. This will help you decide which one to go with…Everything in life needs a little structure, a skeleton on which the rest of it will be built. The same is true with a business. A business needs a certain legal structure in order to operate. In fact, it's required. It can seem kind of confusing at first, but you'll realize that it's actually easier than you originally thought. We'll walk you through each of the various ways to form a business to help you decide which one is best for you.
Sole-proprietorships (best for very small businesses)

As its name suggests, a sole-proprietorship is a business that only one person owns and runs. It's the easiest way to get a business up and running The biggest benefit that a sole-proprietorship offers is that it's easy to set up and run. You don't have to worry about filing separate taxes because all of the money that the business makes will go on your own tax forms. Check out the requirements carefully from a tax perspective.

Partnerships (best for very small to small businesses)

Partnerships are a lot like sole-proprietorships. The big advantage is that it allows you to have business partners to share in the costs of running the business. But like sole-proprietorships, each person is also liable for any legal judgments and any debt that the business takes on. If you want to start up a partnership, be sure you can trust your business partners. If they screw up, it can end up hurting you too!

Corporations (best for medium and large businesses)

If you're worried about getting sued or if you intend to grow into a very large and profitable business, you might want to consider forming some kind of corporation. Corporations are "limited liability", which basically means that the owners aren't responsible for any debts or legal settlements incurred by the business. So if the business fails, the worst that will happen is that it'll declare bankruptcy. You'll still get to keep your house and car.

Corporations are usually preferred by business owners because they allow you to hire employees. They also make deducting expenses from the taxes a little easier. However, if you're one of the only employees of the business and intend to pay yourself with the profits, you'll be taxed twice. The business will be taxed by the money it makes and then the money you pay yourself will be taxed as personal income. That can really take a big chunk out of the earnings.

We've taken a little bit of time to prepare the table below to help you decide which one will be best for you:

Step Seven: Find Capital
Businesses take money in order to make money. This will help you find some start-up capital. As the famous saying goes, "it takes money to make money". That couldn't be more true when it comes to the business world. Every business costs money to start. To do that, you'll need to find some startup capital and here's how you can do that�

Find someone with money and make them your partner There's always someone out there with money. If you know of someone who has a little extra money sitting around burning a hole in their pocket, mention to them that if they lend it to you, you'll give them a share of the business'

Take out a loan with the local bank

If you're at least 18 years old and are confident in your business, you can take your business plan to a local bank and ask about a small business loan. Like I said, you should be pretty confident about your business because you'll be liable for any debt your business incurs. So you might end up paying back that loan out of your own pocket.

Find some big investors (venture capitalists)

Okay, so you have a "hot" idea and it's going to make you millions of dollars? Well, if you think it has that much potential and you are very serious about it, you'll probably want to talk to some venture capitalists.

Venture capitalists are investors and firms who give large sums of money to startup companies that need the funds. In exchange, they get a share of the business.

Getting venture capital isn't easy to do. You'll need a very professional business plan and you'll need to prove that you're serious about what you are doing. You might face a lot of rejections before you find an offer. But stick with it and you should do okay.

Now that the money is secure and everything is ready to go, it's time to finally start the business. Continue reading...you're still not done yet.

Step Eight: Get it Rolling
Now that you have your business all ready, it's time to get it started…Okay, you've come this far. Take a breather and give yourself a pat on the back. Many businesses fail to even get started because the owner either decides it's too much work or they lose interest. If you're this far, you're obviously ready to get the ball rolling. So here goes�
Get all the forms filed

Set up the business so that it's efficient

You'll need to find a way to minimize the amount of work required to run the business. For example, if you have an internet business, you'll want to find a way to make the site pretty self-sufficient so you don't have to sit at a computer for 12 hours/day keeping the website up-to-date. When TeenAnalyst.com was first started, it took many many hours each week just to keep it up and running. Nowadays, it's pretty turnkey.

Prepare all the paperwork ahead of time If you plan to have paperwork and whatnot for your customers to fill out, have it ready ahead of time so that you look like you know what you're doing. Trust me, being organized really pays off!

You might also want to create some business cards. A lot of places offer to do it for you for a certain fee. But they usually require you to print a couple hundred business cards.

Open up shop and get the word out

Okay, now it's time to start the business. If you have your own store, open up the doors. If you have a website, launch the website. If you're making something and selling it from home, start doing that.

With your business started, you're one step closer to being a millionaire. But this is just the beginning...the true excitement lies ahead.

Step Nine: Keep Marketing A lot of businesses fail because they just can't sell their products/services to enough people. And part of the reason why is because not enough people knew about the business. That's why marketing plays such an important role in the success of a biz.

Print out flyers and promotional materials to give out

Attend conventions and public events If you're in a niche market, attend any type of convention that fits your business category. Like if you are running an investing newsletter, attend a financial seminar. You'll meet lots of people to whom you can inform about what you're offering. Who knows...you might end up becoming the most popular person at the convention. I've actually heard of this happening.

If you're doing a mailing, try postcards

Try internet advertising

Internet advertising used to have a reputation of being very pricey. But over the last couple years, prices have come down over 90%. Here are some ways you can get some cheap internet advertising: * Submit your site to search engines: There are many search engines out there, like Yahoo and Google, that allow you to submit your website to. People can then find your website when they search for something related to your site. This is free but you will need to install "meta-tags" on your site to do this. * Pay-per-click search engines: Some search engines out there, like FindWhat.com, have created a system that allows you to "buy" the rank in which your site appears. For example, if you wanted to be the first site to come up when you enter the word "shopping", you just have to bid higher than anyone else. If you bid just 1 or 2 cents per click and you register a lot of keywords, you can get quite a bit of traffic. Twenty-five dollars might buy you 2500 visitors to your site. * Cheap banner advertising - Design an ad and display it at the top of another website. Sites typically charge on a CPM basis. CPM stands for "cost per thousand impressions". So if a site charges $5 CPM, it means that you can have your ad displayed 1,000 times for $5.00. But remember that only about 0.8% of all people will actually click on the ad. So be sure not to pay more than $5 CPM for this kind of advertising.

Put an ad in the local newspaper

If you want a lot of awareness in the community, you might want to consider putting an ad in the local newspaper. Print advertising can be costly but if you're selling a service, an ad is one of the best ways to get you more clients. Be sure to research the rates and decide what size ad you can afford.

Always carry a business card

Be sure you have a business card handy to give to anybody you meet. It's one of the best ways for people to remember you. And they'll also have your contact information handy in case they decide they're interested.

With the right marketing, you'll be on the track to success...

A good marketing approach can mean the success of your business…

Step Ten: Keep Growing
Okay, so your business is doing pretty well? That's great. But now let's try to make it do even better! Okay, let's recap...you created a great idea, you planned things out, you started your business, and things are going good. What could be better? But even if things are going good, you still want to improve your business to make it the best you possibly can. After all, why would you want to settle for something when you know you can have better? Here are some ideas that will help you grow your business even further:

Partner with other businesses

Exchange links if you have a site

Go online and find as many websites as you can that have "links" sections. Then tell them that you'll put a link to their website if they do the same for you. It might be a little extra work but before long you'll have dozens of websites sending traffic to yours. And it won't cost you a dime (well, it shouldn't anyway).
Buy another business

If you've got the money and have a competitor, you might want to buy them out. That way you'll have less competition and more business. Another idea is to buy out a business in a related industry. For example, if you're printing a successful newspaper, you might want to buy a printing business to save on printing costs since the printing business would no longer have to mark up the prices. TeenAnalyst.com is actually the product of a merger. A few years ago, a stock picking website and an educational website merged to form this business.

Just a few ideas!!!!

Kim Usher