Checklist for Starting a Aquarium Business: Essential Ingredients for Success
If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Aquarium business. This will allow you to predict problems before they happeen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
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A Step by Step
Guide to Starting a Small Business
This is a
practical manual in a PDF format, that will walk you step by step through all the
essential phases of starting your Aquarium business. The book is packed with
guides, worksheets and checklists. These strategies are
absolutely crucial to your business' success yet are simple and
easy to Apply.
Copy the following link to your browser and save the file to your PC:
https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf
Preliminary Income Statement
Besides return on investment, you need to know the income and expenses for your business. You show profit or loss and derive operating ratios on the income statement. Dollars are the (actual, estimated, or industry average) amounts for income and expense categories. Operating ratios are expressed as percentages of net sales and show relationships of expenses and net sales.
For instance 50,000 in net sales equals 100% of sales income (revenue). Net profit after taxes equals 3.14% of net sales. The hypothetical "X" industry average after tax net profit might be 5% in a given year for firms with 50,000 in net sales. First you estimate or forecast income (revenue) and expense dollars and ratios for your business. Then compare your estimated or actual performance with your industry average. Analyze differences to see why you are doing better or worse than the competition or why your venture does or doesn't look like it will float.
These basic financial statistics are generally available for most businesses from trade and industry associations, government agencies, universities and private companies and banks
Forecast your own income statement. Do not be influenced by industry figures. Your estimates must be as accurate as possible or else you will have a false impression.
1. What is the normal markup in this line of business. i.e., the dollar difference between the cost of goods sold and sales, expressed as a percentage of sales?
2. What is the average cost of goods sold percentage of sales?
3. What is the average inventory turnover, i.e., the number of times the average inventory is sold each year?
4. What is the average gross profit as a percentage of sales?
5. What are the average expenses as a percentage of sales?
6. What is the average net profit as a percent of sales?
7. Take the preceding figures and work backwards using a standard income statement format and determine the level of sales necessary to support your desired income level.
8. From an objective, practical standpoint, is this level of sales, expenses and profit attainable?
Market Analysis
The primary objective of a market analysis is to arrive at a realistic projection of sales. after answering the following questions you will be in a better positions to answer question eight immediately above.
Population
1. Define the geographical areas from which you can realistically expect to draw customers.
2. What is the population of these areas?
3. What do you know about the population growth trend in these areas?
4. What is the average family size?
5. What is the age distribution?
6. What is the per capita income?
7. What are the consumers' attitudes toward business like yours?
8. What do you know about consumer shopping and spending patterns relative to your type of business?
9. Is the price of your product/service especially important to your target market?
10. Can you appeal to the entire market?
11. If you appeal to only a market segment, is it large enough to be profitable?
Competition
1. Who are your major competitors?
2. What are the major strengths of each?
3. What are the major weaknesses of each?
4. Are you familiar with the following factors concerning your competitors:
Price structure?
Product lines (quality, breadth, width)?
Location?
Promotional activities?
Sources of supply?
Image from a consumer's viewpoint?
5. Do you know of any new competitors?
6. Do you know of any competitor's plans for expansion?
7. Have any firms of your type gone out of business lately?
8. If so, why?
9. Do you know the sales and market share of each competitor?
10. Do you know whether the sales and market share of each competitor are increasing, decreasing, or stable?
11. Do you know the profit levels of each competitor?
12. Are your competitors' profits increasing, decreasing, or stable?
13. Can you compete with your competition?
Sales
1. Determine the total sales volume in your market area.
2. How accurate do you think your forecast of total sales is?
3. Did you base your forecast on concrete data?
4. Is the estimated sales figure "normal" for your market area?
5. Is the sales per square foot for your competitors above the normal average?
6. Are there conditions, or trends, that could change your forecast of total sales?
7. Do you expect to carry items in inventory from season to season, or do you plan to mark down products occasionally to eliminate inventories? If you do not carry over inventory, have you adequately considered the effect of mark-down in your pricing? (Your gross profits margin may be too low.)
8. How do you plan to advertise and promote your product/service/business?
9. Forecast the share of the total market that you can realistically expect - as a dollar amount and as a percentage of your market.
10. Are you sure that you can create enough competitive advantages to achieve the market share in your forecast of the previous question?
11. Is your forecast of dollar sales greater than the sales amount needed to guarantee your desired or minimum income?
12. Have you been optimistic or pessimistic in your forecast of sales?
13. Do you need to hire an expert to refine the sales forecast?
14. Are you willing to hire an expert to refine the sales forecast?
Supply
1. Can you make a list of every item of inventory and operating supplies needed?
2. Do you know the quantity, quality, technical specifications, and price ranges desired?
3. Do you know the name and location of each potential source of supply?
4. Do you know the price ranges available for each product from each supplier?
5. Do you know about the delivery schedules for each supplier?
6. Do you know the sales terms of each supplier?
7. Do you know the credit terms of each supplier?
8. Do you know the financial condition of each supplier?
9. Is there a risk of shortage for any critical materials or merchandise?
10. Are you aware of which supplies have an advantage relative to transportation costs?
11. Will the price available allow you to achieve an adequate markup?
ToSay that you are the sort who is starting
new small business. You Have given focus to the overall chances
for success, and have
selected the new business you want to
establish.
What practical problems will you face in
starting the business? How Much money will you require for
beginning new small business?
Where can you get it? What form
of business organization does one have? Where should you find
the company? (start business tips to
follow)
The very
first question you want to reply is: Just how much money will I
need? However, this question can't be answered until
other
questions are answered and many decisions are made.
To
Determine how much cash is Required to start a business, enter
all Of your prospective income and all of your planned expenses
onto a work sheet or form.
Even though you might feel
that this kind of planning is more than You need to initiate a
simple small business it's useful to get
started with this
particular approach to management which puts down figures in
black and white. You will find exactly the same
approach
valuable in an established business.
First, estimate
your sales volume. This will depend on the overall Quantity of
business in the area, the number and skill of
opponents now
sharing that business, and your own capability to compete for
the consumer's dollar. Obtain assistance in making
your sales
quote from wholesalers, trade associations, your banker, and
other business-people. A number of company and statistical
publications may be useful in making sales volume estimates.
In reaching your final estimate of earnings do not be
over-enthusiastic. A new business generally grows slowly at the
start.
Should you overestimate sales you are likely to spend
too much in gear and initial inventory, and commit yourself to
thicker
operating expenses compared to your real sales volume
will justify. As you're just starting up you might have no sales
for the
first few months. At any rate you may expect your
first few weeks to be very low.
You must also decide
what proportion of your sales will be cash And what percentage
will be offered on credit. If you estimate
that a particular
portion of the sales will be on charge then you must figure
whenever you're likely to have the money for all
these
earnings. One month? Two months? More? Never?
In our
guide to beginning new small business, estimate how Much money
will be paid out. Bear in mind that in starting a company
you
might be purchasing equipment, paying fees and licenses, making
deposits on lease, utilities and so forth, several months
until you open the door. Some of those expenses are simple to
estimate. In case you've opted to lease a building (more about
that
later) then you know what your deposits will be and how
much you will have to pay out monthly. You are probably able to
get the
expense of fees, licenses and utility deposits with a
few telephone calls.
Other expense figures might take a
little more work for you. One way Is to obtain average operating
ratios for the type of
business in which you're interested.
Among the sources for such ratios include Dun & Bradstreet,
Inc., trade associations,
publishers of trade magazines,
specialized accounting firms, industrial companies, and colleges
and universities. The normal
ratios for your kind of business
multiplied by your estimated sales volume will serve as bench
marks for estimating the various
items of expense. However,
do not rely exclusively on this way of estimating each cost
item. Verify and change these estimates
through evaluation
and quotations in the particular market area in which you plan
to operate.
Do not forget to cover yourself too. You may
need money to live on if You have to quit your job. If your
partner is working and
can support the family for a while you
might not have to withdraw money from the company. The more time
you can go without taking
money from, the quicker you will
build up a solid cash position. Now that you have estimated your
money receipts and expenditures,
write down the amount of
cash you'll put in the company to begin. This goes on line 1 in
the case below. Then add lines 2 and 1
for the first month to
get line 3. Then add up all of the expenses to get 5. Subtract
line 5 from line 3 to find line 6. This cash
at the end of
month 1 then goes to line 1 for the start of the following
month, and so on.
If you continue this for the entire
year, very soon you'll find You've got negative numbers or even
a negative cash flow. About
this time you'll also understand
that you should be working on this kind with a pencil which has
a fantastic eraser.
In this overly-simplified
illustration, you see that by the end of June you are minus $200
in cash. Two options can be tried -
reduce your buys at June
by $200 or start with $200 more. You might be unable to reduce
expenses (they will probably go up as your
business starts).
So you will have to put in $200 more to begin with. If all
you've got is 4000 then the additional $200 you will
need is
funding you must get from somewhere else.
Don't be
misled by this very simple illustration. Many small businesses
Start with the 200, and try to get the $4000 from
somewhere
else. Since a Major cause of failure in the early phases of a
company is Under-capitalization, be very careful in your
planning at this point. You can Almost always plan on several
unexpected expenses and a few delays in expected income.
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