Checklist for Going into
Business
Summary
Thinking of owning and managing your own business? It's a
good idea -
provided you know and have what it takes.
Starting a business is risky at best, but your chances of
making it
succeed will be better if you understand the problems you'll
meet and work
out as many of them as you can before you start.
Here are some questions and worksheets to help you think
through what you
need to know and do. Check each question if the answer is
YES. Where the
answer is NO, you have some work to do.
Before You Start
Yes No
Are you the kind of person who can get a business started
and make it run
efficiently?
Think about why you want to own your own business. Do you
want to badly
enough to work long hours without knowing how much money
you'll end up
with?
Have you worked for someone else as a foreman or manager?
Have you had any business training in school?
Have you saved any money?
How About the Money?
Yes No
Do you know how much money you will need to get your
business started?
Have you determined how much money of your own you can put
into the business?
Do you know how much credit you can get from your suppliers
-- the people you will buy from?
Do you know where you can borrow the rest of the money you
need to start your business?
Have you figured out what net/loss income per year you
expect to get from the business?
Are you willing to re-invest your salary/business profits to
help your business grow?
Have you talked to a banker about your plans?
How About a Partner?
Yes No
If you require a partner for additional financing, do you
know someone who
will fit - someone you can get along with?
Do you know the good and bad points about running your own
business, having a partnership, and incorporating your
business?
Have you talked to a lawyer about a partner?
How About Your Customers?
Yes No
Do most businesses in your community seem to be doing well?
Have you tried to find out whether or not businesses like
the one you want
to open are doing well in your community and in the rest of
the country?
Do you know what kind of people will want to buy what you
plan to sell?
Do people like to live in the area where you want to open
your business?
Do they need a business like yours?
If not, have you thought about opening a different kind of
business or going to another location?
Your Building
Yes No
Have you found a good building for your business?
Will you have sufficient room to expand when necessary?
Can you fix the building up the way you want without
spending too much money?
Can people access your business easily from parking spaces,
bus stops, or their homes?
Have you had a lawyer check the lease and zoning
requirements?
Equipment and Supplies
Yes No
Do you know just equipment and supplies you need and how
much they will cost?
Can you save some money by buying second-hand equipment?
Is it feasible to buy second-hand equipment?
Expenses
Yes No
Do you know what your expenses will be for: rent, wages,
insurance, utilities, advertising, interest, etc.?
Do you need to know which expenses are direct, indirect, or
fixed?
Do you know how much your overhead costs will be?
Do you know how much your selling expenses will be?
Miscellaneous
Yes No
Are you aware of the major risks associated with your
product? Service?
Business?
Can you minimize any of these major risks?
Are there major risks beyond your control?
Can these risks bankrupt you?
Your Merchandise
Yes No
Have you decided what things you will sell?
Do you know how much or how many of each you will buy to
open your store with?
Have you found suppliers who will sell you what you need at
a competitive price?
Have you compared the prices and credit terms of different
suppliers?
Your Records
Yes No
Have you planned a system of records that will keep track of
your income and expenses, what you owe people, and what
other people owe you?
Have you worked out a way to keep track of your inventory so
that you will
always have enough on hand for your customers but not more
than you can sell?
Have you figured out how to keep your payroll records and
take care of tax reports and payments?
Do you know what financial statements you should prepare?
Do you know an accountant who will help you with your
records and financial statements?
Your Business and The Law
Yes No
Do you know what licenses and permits you need?
Do you know what business laws you have to obey?
Do you know a lawyer you can go to for advice and help with
legal papers?
Buying a Business Someone Else Has Started
Yes No
Have you made a list of the advantages and disadvantages of
the business someone else has started?
Are you sure you know the real reason why the owner wants to
sell this business?
Have you compared the cost of buying the business with the
cost of starting a new business?
Is the equipment/inventory up to date and in good condition?
Will the owner of the building transfer the lease to you?
Have you talked with other business owners in the area to
see what they think of the business for sale?
Have you talked with the company's current suppliers?
Have you talked with a lawyer about the existing business?
Advertising
Yes No
Have you decided how you will advertise? (newspapers,
posters, handbills,
television, radio, Internet, mail?)
Do you know where to get help with your ads?
Have you watched what other competitors do to get people to
buy?
The Prices You Charge
Yes No
Do you know how to determine what you should charge for each
item you
sell?
Do you know what your competitors charge?
Buying
Yes No
Do you have a plan for finding out what your customers want?
Will your plan for keeping track of your inventory tell you
when it is time to order more and how much to order?
Do you plan to buy most of your stock from a few suppliers
or several?
So you know the advantages and disadvantages of each supply
method?
Selling
Yes No
Have you decided whether you will have sales associates or
self-service?
Do you know how to encourage customers to buy?
Have you thought about why you like to buy from some sales
associates while others turn you off?
Your Employees
Yes No
If you need to hire someone to help you, do you know where
to look?
Do you know what kind of employees you need?
Do you have a plan for training your employees?
Credit for Your Customers
Yes No
Have you decided whether or not to let your customers buy on
credit?
Do you know the good and bad points about joining a
credit-card plan?
Can you tell a deadbeat from a good credit customer?
A Few Extra Questions
Yes No
Have you figured out whether or not you could make more
money working for someone else?
Does your family go along with your plan to start a business
of your own?
Do you know where to find out about new ideas and new
products?
Do you have a business plan for yourself and your employees?
If you have answered all these questions carefully, you've
done some hard
work and serious thinking. Moreover, you have probably found
some things
you still need to know more about or do something about.
Do all you can for yourself, but don't hesitate to ask for
help from
people who can tell you what you need to know. Remember,
running a
business takes courage! You've got to be able to decide what
you need and
then go after it.
Good Luck!
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