Starting a Business - Checklist of Questions

• Have you had managerial experience?
• What business training have you had if any?
• How much money have you saved to start your business?

How About the Money?

• Do you know how much money you will need to get your business started?
• How much money of your own can put into the business?
• How much credit can you 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?
• Do you have enough money saved to pay personal bills for six months until the business becomes profitable?

How About a Partner?

• If you require a partner for additional financing, do you know someone who will fit - someone you can get along with in good times and bad times?
• 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 or CPA about a partner?

How About Your Customers?

• 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 who your customers will be?
• Do people like to live in the area where you want to open your business?
• Is there a need for a business like yours?
• If not, have you thought about opening a different kind of business or going to another location?
• Do people like to live in the area where you want to open your business?

Your Office or Retail Building

• Have you found a good office/building for your business?
• Will you have sufficient room to expand?
• How much will it cost to fix the building up the way you want?
• 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

• Do you know what 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

• Do you know what your expenses will be for: rent, wages, insurance, utilities, advertising, interest, payroll, etc.?
• Do you know how much your selling expenses will be?

Miscellaneous

• Are you aware of the major risks associated with your product? Service? Business?
• Can you minimize any of these major risks?
• Can these risks bankrupt you?

Your Merchandise

• 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

• Do you know an accountant who will help you with your records and financial statements?
• 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 payroll tax reports and payments?
• Do you know what financial statements and tax returns you should prepare?

Business and The Law

• What legal form will you operate your business under? (Sole Proprietorship, Partnership or Corporation)
• 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?
• Do you know what income taxes you are liable for?

Buying a Business Someone Else Has Started

• 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?
• Will existing customers remain loyal to a new owner?
• Have you considered a non-compete agrement?
• 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?

Advertising

• 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

• Do you know how to determine what you should charge for each item you sell?
• Do you know what your competitors charge?

Buying

• 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?
• 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

• 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?
• Do you know if you need workmen's compensation insurance?

Credit for Your Customers

• 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

• Have you figured out whether or not you could make more money working for someone else?
• Does your family support 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 written business plan?
• Have you talked with an insurance agent about your new business?
• Are you aware that there is less than a 50-50 chance that you will be in business two years from now?

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.