Things you need to consider before starting a business

NEW YORK (AP) -- You've got a business idea that you're sure will work. It's just a matter of getting started.

Are you really ready? Before you start thinking about quitting your current job, you should be asking yourself plenty of questions, and answering them honestly.

The federal Small Business Administration's Web site (www.sba.gov) has what it calls a Small Business Startup Kit to help prospective entrepreneurs focus on some of the factors they need to consider. Among questions listed to help you decide if being an entrepreneur is really for you: Are you a self -starter? How well do you get along with different personalities? How good are you at making decisions? Do you have the physical and emotional stamina to run a business? How well do you plan and organize? Is your drive strong enough to maintain your motivation?

The SBA site also has information about many of the practical considerations of starting a business. Small business guidebooks are another resource for people wrestling with whether they should just do it. In A Woman's Guide to Starting Her Own Business, author Cynthia S. Smith tries to give would-be entrepreneurs a dose of reality.

"You will be better equipped to weather the rough times if you are aware of the incipient problems now and can either learn to meet them head-on or, even better, stave them off entirely," Smith says.

Among the pitfalls she lists: family resentment, working for no income, dealing with rejection, lots of worrying and plenty of broken dreams.

If you decide you're up to starting your own business, you'll probably start thinking immediately about money B where will you get the funds? But even before you start calculating how much is in your savings account and how much available credit you can tap, you need to have a business plan prepared.

A business plan is a document required by lenders and many investors; it's highly unlikely you'll be able to get a loan or seed money without one. But perhaps more important for an entrepreneur, a business plan provides an opportunity to plan a company in a concrete, organized fashion and to look realistically at what the demands of being a business owner will be. "A business plan precisely defines your business, identifies your goals and serves as your firm's resume ..." the SBA says in its Web site. "It helps you allocate resources properly, handle unforeseen complications and make the right decisions."

Financial information about your company is a critical part of your business plan, of course, but it also should describe the company's products or services, include market research, detail marketing and advertising plans and generally describe how the business will operate. The plan needs to be put together carefully. In "The Young Entrepreneur's Guide to Starting and Running a Business," author Steve Mariotti says, "A well-written business plan shows potential investors that the business owner has carefully thought through the business."

"A well-written plan not only helps you raise money; it also guides you as you develop your business," Mariotti says.

There are many books in stores and in libraries to help put a business plan together. The SBA Web site also has a guide for writing a plan.

The business plan will give a good idea of just how much money is needed. Along with that plan, you need to assess your personal finances -- chances are, you're going to take a cut in income when you start your business. "How long can you live without a paycheck in case you need to put it all back in the business?" asks Entrepreneur magazine's Small Business Advisor. The book tells prospective business owners to come up with a family budget, and to be sure family members understand the financial risks that go along with this new venture.

2000Copyright
Provided by ProQuest Information and Learning Company. All rights Reserved.