Planning and starting a business is a little like climbing a mountain. It is a perilous journey, fraught with unknown dangers and influences outside your control. But if you keep your goal in sight and plan very, very carefully, getting to the top can be a most rewarding experience. We'll revisit this metaphor later.
The statistics concerning survival rates of new businesses vary considerably depending on who's doing the reporting. For instance, the reported failure rate during the first three years ranges from 10% to 85%. The real figure is no doubt somewhere in between these limits. The point, however, is that considering there are nearly a million new business start-ups each year; many of them will fail. We're going to profit from these failures by learning the basis for the failures, adding this information to data we've gleaned from the successes, to give you a clear advantage. This guide contains a wealth of information that is based on many actual, hard-learned, and expensive lessons.
All the reasons for a business failure are too numerous to list, but they can be categorized into these major areas:
Chapter 2 includes information that will allow you to assess your own entrepreneurial qualities. A checklist is included for you to test yourself.
Chapter 3 covers choosing your business and selecting its legal structure. The choice may seem obvious to you but you might be overlooking some obvious pitfalls. The "right" business can turn out to be a disaster if the choice is made for the wrong reasons. This chapter also discusses the numerous legal requirements of which you need to be aware.
Chapter 4 provides guidance on obtaining outside financing to start or expand your business.
Chapter 5 discusses partnerships and includes a checklist for choosing a partner who will be an asset to your business. An effective partnership can be a powerful combination for success, but the wrong partner is like stepping into the batter's box with two strikes against you.
Chapter 6 discusses planning. The lack of proper planning is the major reason for business failure. This chapter gives practical advice on the planning process, why it's important, and how to plan effectively for success. This chapter also covers planning for failure. Huh? Well, the facts are the facts ... Business is tough and failure is possible. If you plan ahead for the possibility of failure, you will be ready to deal with it.
Chapter 7 provides advice for working with accountants, attorneys, and insurance agents, all of whom you will be working with on a regular basis. Checklists are included for selecting and dealing with these professionals.
Chapter 8 covers the importance of a banking relationship, how to choose and deal with your bank. A listing of banking services is also included.
Chapter 9 discusses the significance of separation of home and business. It is no secret that many couples split up because of the pressures of one or the other going into business. Suggestions are listed that can prevent this tragedy.
Chapter 10 discusses marketing. This chapter is by no means comprehensive since marketing is a very complex arena, but what is offered are simple suggestions relative to basic marketing principles that can be critical to the long term health of your business. The appendix to this chapter contains listings for seeking out further information about marketing activities.
Chapter 11. Protection! Don't skim over this chapter! This very important area includes personal guarantee warnings, partnership agreements, and insurance.
Chapter 12 provides some ideas on hiring employees and suggests hiring may not be the best approach for you.
Chapter 13 discusses technology and its relation to your business. Computers and the Internet are discussed in some detail including selection of hardware and software; maintenance; security; and more. You will probably find early on that a computer is a necessary tool for your business.
Chapter 14 discusses the importance of the Internet. Information is included to show you how to "get connected" and how to use the Internet as a valuable business tool. The Internet is just as important - maybe more so - than the telephone is to your business success.
Chapter 15 is about communications, writing and speaking. Included is a checklist for effective writ-ten and spoken communications.
Chapter 16 includes a listing of suggestions for day-to-day business operations, including important areas such as saving money and using the telephone to best advantage.
Chapter 17 provides a summary listing of the major items to be considered when starting and running your business and a few final thoughts.
Appendix I is a listing of reference material.
Appendix II is an index of the various checklists included throughout the text.
Appendix III contains information specific to home-based businesses.
Appendix IV is a listing of some useful Internet sites and reference material.
Appendix V provides information on obtaining a business merchant account so that your customers may pay for services and products with credit cards.
Appendix VI is a small business glossary.
Appendix VII is state specific small business contact information.
Appendix VIII provides information on how your small business can sell products or services to the Federal Government.
Appendix IX is a listing of important Internet milestones.
Appendix X is a compilation of useful small business tips taken from the Small Business Advisor website.
Each chapter of this guidebook contains useful information for both the first time businessperson and the more experienced entrepreneur. However, each chapter stands alone, and if you are looking for information on a specific topic, refer to the brief chapter descriptions above to determine what portion of the guidebook will be most useful for your specific situation.