A plethora of resources are available to provide support and information in your entrepreneurial venture. Taking the time to network, research and plan will help to create a thriving environment for you and your business.
Your Business Plan -- A benchmark for progress
Unless you need to compete for financing, the preparation of a business plan is not an official requirement. Even so, the creation of a business plan will help you define your strategy and mission. The plan will enable you to evaluate your resources, study your environment, formalize your projections, and consolidate your objectives. It will also serve as a tool for making critical business decisions.
The Small Business Administration (SBA) has an online workshop called The Business Plan -- Roadmap to Success. The IRS has the same resource in a more structured PDF format.
The tool incorporates four main elements of a business plan: description of your business, marketing plan, financial plan, and the management plan.
The workbook even includes a tutorial and self-paced activity that can help you formulate the most challenging phases of your plan without ever stepping foot into business school! You will be led through a comprehensive analysis of how to conduct financial management (income projections, balance sheet, monthly cash flow projections) and marketing management (marketing plan, price/quality matrix). In developing your marketing plan, you will conduct a product/service analysis, and a survey for significant environmental factors (i.e. regulatory, competitive, economic, and legal). You will also find detailed worksheets for evaluating target markets, marketing mix, and positioning.
Over time, your business plan will serve as a living document that can signal your need for redirection and benchmark your progress toward concrete objectives. As an entrepreneur, it will be a lasting source of feedback, and an indicator of your ultimate success.
Determine the legal form of your business
The legal structure of your business organization will affect many key factors in your regulatory environment. Three commonly known structures are the proprietorship, partnership and corporation. Each of these constructions is defined by different characteristics: method of creation, entity status, liability of owners, duration, transferability of interest, control, capital and taxation. Other business forms include joint ventures, joint stock companies, syndicates, cooperatives, and franchises. You might even decide that the Limited Liability Company (LLC) or the Limited Liability Partnership (LLP) best meet your needs.
Most small business owners do not invest the proper amount of time and consideration in determining the legal structure. There are distinct advantages and disadvantages to each organizational model. Of course, the right structure will depend on the nature of your individual business and style.
This aspect of establishing an HBB can be daunting to new entrepreneurs. You do not have to face these decisions alone. A civilian attorney or accountant can help you explore the most appropriate legal structures for your venture. If this process feels intimidating, look for a basic textbook on the legal environment of business at your local library. It can help you become comfortable with the issues and terminology before seeking counsel.
This expenditure should be incorporated into your planning and budgeting. Though you may feel that you cannot afford to pay for professional advice, the wrong decision in this area could be the most expensive mistake of your life.