Time to Make the Decision

Time, now, to make a decision. You've analyzed yourself, your life style, your opinion, and your attitudes. You've read and studied and discussed the pros and cons of starting a business of your own with attorneys and accountants, business owners and bankers. You've picked a lot of brains, and given your own a workout. Now it is time for you to make the one all-encompassing decision which, if it is in the affirmative and you decide to start a small business of your own, will require one decision after another to implement.

You've done your cash planning and explored your cash requirements in consultation with your lawyer, banker, accountant or any combination of the three. Can you swing it financially? Make a decision.

You've pondered the advisability of sharing ownership with others as compared with the independence of going it alone. Which will it be? Another decision required.

You've walked and driven through urban business areas, stood and watched the traffic in neighborhood shopping centers, tried to estimate the value of becoming part of one of the gigantic covered malls sprawled out in the suburbs. Which offers the most suitable location for you?

Some of you have faced the alternative of buying an existing business. After carefully weighing the advantages of such a transaction against the disadvantages, what decision will you make on this question?

Others among you who are reading these pages have given the possibility of investing in a franchised business serious consideration. Do the safeguards the quick-start advantages offered by operating within the shelter of a national franchise make up for the lack of freedom under which you may be forced to operate? What will your decision be?

These five important preliminary decisions made, you are ready to begin considering the many decisions which the specific type and size of small business you have chosen will require. Answer the following questions.

What are my immediate goals?

My long range goals?

If purchasing stock for resale, I should begin with the following decisions:

What quality merchandise shall I carry? Luxury, Average, Thrifty, Varied?

Who will my suppliers be?

What will my average pricing markup be?

Who will do the selling? Owner, Employees, Both?

How will I attract customers? Newspaper ads, Radio, TV, Handbills, Word of mouth, Window displays, Special promotions?

What kind of records will I need?

Who will keep the records? Owner, Bookkeeper Full time, Bookkeeper Part-time?

How will personnel be selected? Employment Agency, Help Wanted, Family, Word of Mouth?

How will personnel be trained?

How will personnel be motivated?

Special attention also must be paid to law requirements and regulations. Some of these will involve decisions on your part. Most of them give you little choice. They simply need to be followed. These questions may serve as a helpful check:

Does my business require licensing? How often? By whom?

Am I familiar with requirements regarding consumer protection in pricing, time payments and so forth? Have I taken steps to meet these requirements?

If I am setting up a manufacturing plant, am I aware of the restrictions regarding disposition of waste materials in compliance with environmental codes? Have I taken steps to assure compliance with them?

Have I checked to assure that my business practices will be in consonance with national and local regulations concerning fair competition practices?

If my place of business will require employees other than myself, have I taken steps to comply with Fair Labor Standards, OSHA requirements, Fair Employment Practices and other labor relations criteria? What about group health insurance? Other insurance?

Have I checked with the Internal Revenue Service for employee tax withholding procedures and forms?

If you are aware of the responsibility, the hard work and the long hours it will take before your goal as an entrepreneur can be realized, and you are not deterred...

If you have given long and careful consideration to all the requirements, regulations, financial obligations and hazards implicit in setting up a small business, and you regard them as challenges you can meet.

If you would gladly give up your safe job working for someone else for the independence, the excitement, the sheer joy of being your own boss, than small business ownership may indeed be for you.

Good luck in your endeavor!

Say that you're the type who's beginning new small business. You Have given focus to the general chances for success, and have
selected the new business you want to establish.

What technical issues will you face in establishing the organization? How Much cash will you need for starting new small business?
Where can you obtain it? What kind of business organization will you own? Where should you locate the business? (start business
tips to follow)

The very first question you want to answer is: How much cash will I need? But this question can not be answered until other
questions are answered and several choices are made.

To decide how much cash is needed to start a business, enter all Of your prospective income and all of your planned expenses on a
work sheet or kind.

Though you might feel that This Type of planning is more than You have to initiate a simple small business it is useful to begin
with this approach to direction which puts down figures in black and white. You will discover the same approach valuable in an
established small business.

First, estimate your sales volume. This will depend on the overall Amount of business in the area, the number and ability of
opponents now sharing that business, and your own capability to compete for the consumer's dollar. Obtain assistance in making
your sales estimate from wholesalers, trade associations, your banker, and other business-people. A number of business and
statistical books could be useful in making sales volume estimates.

In reaching your final quote of earnings don't be over-enthusiastic. A new company generally grows slowly at the start. Should you
overestimate sales you're likely to invest too much in gear and initial inventory, and devote to heavier operating expenses
compared to your real sales volume will warrant. Since you are just starting up you might have no sales for the first couple of
months. At any rate you may expect your first few weeks to be very low.

You must also determine what percentage of your earnings will be money And what percentage will be sold on credit. If you guess
that a particular part of the sales will be on charge then you have to figure when you're likely to get the money for these
earnings. One month? 2 months? More? Never?

In our guide to beginning new small business, estimate how Much money will be paid out. Remember that in starting a business you
may be purchasing equipment, paying licenses and fees, making deposits on rent, utilities and so on, several months until you open
the door. A few of these expenses are simple to estimate. In case you've decided to lease a building (more about this later) then
you know what your deposits will be and how much you'll have to pay out monthly. You are probably able to get the cost of fees,
permits and utility deposits with a few telephone calls.

Other expense figures might take a little more work to get. 1 way Is to acquire typical operating ratios for the type of company
in which you are interested. Among the resources for such ratios include Dun & Bradstreet, Inc., trade associations, publishers of
trade magazines, technical accounting companies, industrial companies, and colleges and universities. The typical ratios for your
kind of business multiplied by your projected sales volume will serve as bench marks for estimating the various items of
expenditure. But do not rely solely on this method for estimating each cost item. Verify and change these quotes through
evaluation and quotes in the particular market area where you intend to operate.

Don't forget to cover yourself too. You Might Need cash to live on if You have to quit your job. If your partner is working and
can support the family for a while you may not have to withdraw cash from the business. The more time you can go without taking
money from, the faster you will develop a strong cash position. Now you've estimated your money receipts and expenditures, write
down the quantity of cash you'll put into the business to start. This goes online 1 in the case below. Next, add lines 1 and 2 for
the first month to get line 3. Then add up all of the expenses to get line 5. Subtract line 5 from line 3 to find line 6. This
cash in the end of month 1 then goes to line 1 to the start of the following month, etc.

If you continue this for the entire year, very soon you will find You've got negative numbers or even a negative cash flow. About
this time you'll also understand that you ought to be operating on this kind with a pencil that has a fantastic eraser.

In this overly-simplified case, you see that by the end of June you're minus $200 in money. Two solutions can be tried - reduce
your purchases in June by $200 or start with $200 more. You may be unable to reduce expenses (they will probably go up as your
business starts). So you will have to put in $200 more to start with. If all you've got is 4000 then the additional $200 you will
need is funding you need to get from somewhere else.

Don't be misled by this very simple illustration. Many small businesses Begin with the 200, and attempt to get the $4000 from
someplace else. Since a Major cause of failure in the first stages of a business is Under-capitalization, be very careful in your
preparation at this point. You can Almost always plan on several unexpected expenses and a few delays in anticipated income.

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