HOW TO START UP…

AND REMAIN IN BUSINESS.
A SIMPLE PROCESS.
AKINO A. DAVIS.

HOW TO START UP…AND REMAIN IN BUSINESS.

HOW TO START UP…

AND REMAIN IN BUSINESS.
A SIMPLE PROCESS.
AKINO A. DAVIS.

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HOW TO START UP…AND REMAIN IN BUSINESS. HOW TO START UP…AND REMAIN IN BUSINESS. A SIMPLE PROCESS. First Edition Print Copyright © December 2008 By Akino A. Davis. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Published By: Kingdom Coaching Company. Address: #19 Arcadia Avenue, Paradise East, Tacarigua, Trinidad, W.I. Telephone: 1-868-337-5886 Email: sme.chiefconsultant@gmail.com Website: www.kingdomcoach.webs.com / www.smedirect.webs.com Cover Design by: Akino A. Davis. Printed in The Republic of Trinidad & Tobago

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HOW TO START UP…AND REMAIN IN BUSINESS. TABLE OF CONTENTS. Dedication Introduction How to Use this Manual SECTION ONE: How to Start a Business. Chapter 1 Developing Your Ideas Chapter 2 Selecting Your Business Entry Level (Part time or Full time) Chapter 3 Making the Business Legal Chapter 4 Writing a Successful Business Plan Chapter 5 Getting Start Up Capital Chapter 6 Establishing Financial Controls Chapter 7 Considerations at Start Up Concluding Section One page 10 page 05 page 06 page 08

page 14

page 16

page 20

page 25

page 30

page 33

page 45

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HOW TO START UP…AND REMAIN IN BUSINESS. Dedication This book is dedicated to all the young and not so young individuals with an internal and overwhelming desire to seek out and obtain self liberation and financial well being via small business ownership and commerce. I especially dedicate this book to my Mother, Gloria Wilson-Thomas for laying the foundation as an Entrepreneur and for giving me a business education that could never be taught or learnt in any school. May God Bless Her Soul, see you in Heaven. Furthermore, I dedicate this book to all my other family, friends and onlookers, who have endured my perseverance and ambition to become a successful businessman and example to them.

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HOW TO START UP…AND REMAIN IN BUSINESS. Introduction

As a young boy growing up, I have always been
exposed to entrepreneurship and small business start ups, operations and development. My mother, for as long as I could remember was always self employed. There was only one time in my mid teens where she took employment but still maintained a successful business. In the 1980’s my mother started as a “street vendor”, meaning she had no fixed place of operation except for the streets of San Juan a budding town in east Trinidad. Eventually as she became more successful as a merchant she relocated to the capital city of Port of Spain and this is where my real education as an entrepreneur started. On my mother’s instruction and guidance, my primary and secondary school years were spent pedaling goods and other items throughout the city. I would sell from lemon to lipstick, even belting out sales slogans in my sleep at nights. Soon enough though we were able to set up a permanent building structure in our village, were we sold small food items, snacks and drinks. In 2003, mom moved back to St. Vincent the country of her birth after spending twenty seven years in Trinidad and Tobago. In St. Vincent and before her death in June 2010, she successfully operated a successful fast food café and variety store. It is this training as a boy and teenager together with my own experiences as an employee and successful businessman and the formal education received along 6|P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. the way that I set out to present this book: HOW TO START UP… AND REMAIN IN BUSINESS as an applied and proven guide for starting and remaining in business. In my endeavors as an entrepreneur, these guides have allowed me to start and operate several businesses in Trinidad and Tobago, even the company which publishes this book. In this book I don’t attempt to re-invent anyone else’s principles but only to compile steps and strategies as they have been useful to me, as I am sure they will prove useful to you also. Read on then if you are ready to learn HOW TO START UP… AND REMAIN

IN BUSINESS, A Simple Process.

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HOW TO START UP…AND REMAIN IN BUSINESS. How to Use This Manual

This Manual is a guide for aspiring entrepreneurs and future business owners on the ABCs of starting up and successfully managing their ventures. This manual is not a fool proof guide and no claims of guarantee are suggested herein. It is my belief that the success of a small business or any business is dependent upon the management and vision of the business owner and the team operating the business.
I hope that as you read this book, the information will inform you accordingly and that you make the decisions that is right for your business to start and remain a success in the marketplace. Wishing you all the best of success!

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HOW TO START UP…AND REMAIN IN BUSINESS.

SECTION ONE

HOW TO START A BUSINESS

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 1 Developing Your Ideas

Every new business starts with an idea. Ideas can be unique to the one who possess it but many a business has been started from the modification of existing business ideas. Your idea is the most important seed for your business and one must seek out to guard your idea and protect it.
A business idea, though birthed in your mind and heart, can be easily stolen, copied or modified. Having a business idea does not give you ownership of a business but it is only when this idea is developed and your business started can you give claim to the business. The development of your business idea is an essential step. Having a unique idea does not guarantee that your business will be successful. The idea is merely a seed and you need to nurture it to a stage where it can morph into a successful business. Developing a successful business idea will involve the following steps: • • • Journaling your Idea Conducting Idea Studies Crunching Start up Numbers

Journaling Your Idea: Your memory grows more fragile with age, so it is advisable that you write down your ideas. Keep a journal or writing pad handy. There are times when I go through phases of “idea storms”

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HOW TO START UP…AND REMAIN IN BUSINESS. and it usually serves me well to keep a writing pad and pen close by at all times; even at my bedside in the night. If you are as excited an entrepreneur as I am, you will not remember ever idea that comes to mind, so journaling is important. Most ideas that come through your mind may not stick and keeping a journal of your ideas will serve as a sort of filing of your ideas. As an entrepreneur you too will realize that memory space is important to you and the less stuff you have in your mind will serve to increase your thinking capacity. This leads us to step two. Conducting Idea Studies: After recording your unique or existing idea, you can now review each your idea(s) more carefully. This is what I call the idea elimination stage. Here you can engage in a bit more research on your idea industry to see if indeed there is a place for your idea in the business market place. Not all unique ideas find a place in the market, even it appears to be a “messiah idea” that is, an idea that you know will solve a problem. For example, in 2007 I came across an idea that was highly popular in Europe and North America for generations before. It is the conversion of shipping containers into affordable housing and other building uses. In my research I discovered that the technology was very easy to apply to my local industry and that indeed I had found the “Messiah Idea.” I drew up exquisite floor plans, did a sound business plan and invited associates to invest in the idea.

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HOW TO START UP…AND REMAIN IN BUSINESS. When we launched the “C.U.T.E – Container Units To Enjoy” in August 2008, the idea and designs generated huge fanfare and interest. Unfortunately to this day (September 2010) we have not been able to secure a sale for our units. What was our problem? Well we had a “Messiah Idea” but nobody wanted to be saved. We underestimated the culture of our local citizens. Our target market then did not appreciate the idea of dwelling in a “steel box” even though it looked better than and cost cheaper than a traditionally built house or building. I failed then to study our unique idea carefully and to take into account the culture of the homebuyer. What resulted was me becoming indebted to several investors and I didn’t even make money from the idea. You can save yourself time, effort, energy, money and some shame if you carefully study your business ideas. Determine firstly if your idea is wanted by your target customers. If it isn’t at that point in time, create a file, store it away and move onto the studying the next idea. Notice I advised you to store away your ideas if they are not feasible when you did your initial study. Storing ideas is important because after time when markets, environments and cultural acceptance change, these ideas can be resurrected and developed into successful businesses. Anyway, after two years, we were able to resurrect our “Container Housing” idea. As it turns out now the market for rental housing is huge and we were able to adapt our designs to the housing rental market. Let’s just say we were fortunate not to discard the idea file. 12 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. Crunching Start Up Numbers. So you’ve journal and studied the ideas. The next step is to crunch the start up numbers. A simple idea can cost much to implement but this can be structured into smaller segments if you crunch the numbers for start up. One has to remember that each business must start with small steps and though you may possess a large vision, the business must start somewhere. Starting small and growing gradually is an almost sure path to success. By crunching the numbers, you can determine what it will cost to get you started on this path and will instruct you in your way in further developing your idea(s) into a business you will enjoy doing.

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 2 Selecting Your Business Entry Level

After doing the feasibility study to determine the
viability of converting your business idea into a successful business, your next step is to determine what level of entry you will pursue in the establishment and operation of the business. Ideally there are two levels of business entry levels to be considered when deciding on this matter, they are: 1. Part Time Entry and 2. Full Time Entry. Part Time Entry. There are several factors which determine whether it is better suited for small businesses to be started as part time businesses. These factors include the level of income generated, the need or not for employees, and the operator confidence. Where it is established that the business will not satisfy these factors, an entrepreneur should choose to start their business on a part time level. In fact it is recommended by other successful entrepreneurs that new small businesses should be started part time to allow for the business to adapt to the market and for the owners to learn more of the market conditions, industry challenges and to develop naturally. Part time entry is also ideally suited to small businesses starting out with very limited budgets and cash flow. This form of entry offers the entrepreneur to continue 14 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. in a day job, where cash can be saved and contributed to the development of the business as well as for enjoying further opportunity for learning and personal development, which will redound to the benefit of your small business. Full Time Entry. Full time business entry is best suited for the more confident entrepreneur. Ideally the business owner should have a healthy savings to mitigate against slow business startup and not have to worry about meeting the needs of living expenses for his/her family. A full time business entry offers greater flexibility in operating and growing the business as the restrictions that accompany a part time entry is non-existent. Choosing to start your business on a full-time basis will require that greater planning and control be designed and established before a decision is made in this regard. Careful analysis of the market and business planning should be undertaken and a sound business plan should be written to convince investors that it is worth investing in your business. Even where your own funds are to be used for starting your business full time, it is still important to plan properly. Because your own personal finance is at risk the need for proper planning should be greater when starting out. Whether choosing to start part time or full time, you should be clear to recognize the benefits and challenges of both levels of entry and employ the necessary feasibility and planning procedures to ensure success at the chosen level of business entry. 15 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 3 Making the Business Legal

Now that you have drafted a solid business plan you
are confident will allow you to attract investors to finance your business idea, you need now, to give life to the business in itself. Neither Banks nor investors lend to ideas therefore the business idea must be given a life. A type of “personification” or making the business a Legal entity. When a business is registered or incorporated, it gives legitimacy to its operations and the objectives of the business plan. It also inspires confidence in the owner, its customers/clients and its investors. Registration or Incorporation also facilitates payment of government and personal income taxes from income to be derived from the activities of the business. There are several types of legal structures for operating a business. Here in Trinidad and Tobago and the Caribbean and maybe most Commonwealth Countries, you will encounter the three (3) main forms of ways to make your business legal. These forms of structures are; 1. Sole Proprietorship, 2. Partnerships/Firms and 3. Limited Liability Company. Sole Proprietorship: This form of registration is the simplest form of business structure within which you can operate. It is sometimes referred to as Sole Trader Business. In this structure an individual may register a business name and conduct his or her business under 16 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. such name. The main advantage to operating under this type of registration is that the process in itself is a very easy process to undertake. In this structure, the individual assumes all the responsibilities and or liabilities of the business, which may include bad debts or other type of liability. All business operations account to the personal name of the business owner and will reflect on the individual’s credit health and personal reputation. The registration process is a three step process which includes: 1. Undertaking a Business Name Search. 2. Obtaining an Individual Income Tax Registration Number and 3. Registering the Approved Business Name to make the business legal. Partnership/Firm: A partnership or firm is a type of business structure where two (2) or more individuals come together to register a business. In a partnership or firm, each partner assumes shared responsibilities for the responsibilities and liabilities of the business. As in the case of the sole proprietorship type, the partners are personally liable for any legal or other action that may be brought against the business. The process of registration of a partnership or firm is quite similar to that of the sole proprietorship. The process includes: 1. Undertaking a Business Name Search. 2. Obtaining Individual Income Tax Registration Numbers for each partner and 17 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. 3. Registering the Approved Business Name to make the business legal. Limited Liability Company: A limited liability company structure is far more complex than both the sole proprietorship and the partnership/firm structures. This type of structure establishes the business as an individual in itself. It makes the company a separate entity from the owners. The business has a life of its own and is treated as such in law. It is taxed separately from the individuals; (who themselves are still taxed from earned personal income), the business is liable for any bad debts or other liabilities and shields the owners or directors from personal responsibilities for such liabilities. A limited liability company must be incorporated by a minimum of two (2) persons referred to as directors. This type of business structure is well suited to large corporations which require a board of directors which is appointed by the shareholders or owners, a set of operating rules known as the bye-laws and a host of other policies for governance. It my advice that any person seeking to register this type of business structure should seek professional legal assistance as this type of structure is way more complex to incorporate than the previous two types of business structures. Many corporations have started out as sole traders and as partnerships and for your business, when the time is appropriate and your business have outgrown its structure, then it is best to shift the legal structure of 18 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. the business to a corporation, which is a limited liability company. Remember that any business activity that is conducted deliberately outside of the structures discussed is an illegal business! Will this then create a problem for teen businesses? Teenagers not yet having attained the voting age or the age to acquire a National Identification Card and who operate a business should seek to have their businesses registered in their parents name or in the name of an adult they can trust. Be sure to have a legal contract drawn up to ensure that funds are accounted for that that transfer of the business or any assets thereof will take place on the teenager reaching legal age to operate his or her own business. Remember the Kid Actor from the Home Alone Movies? And what of the countless others who had to take their parents or guardians to court to reclaim their business and assets. Making your business legal is making your business safely yours!

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 4 Writing a Successful Business Plan

For all products or services ever invented, it is
accompanied by a manual. This manual is simply a guide or set of instructions in the operation of same product or delivery of service. Such is A Business Plan. Simply put, a business plan is your guide, a manual that will lead you along your path to starting up and maintaining a successful business. There are many types of business plan but we will focus on the Start up Business Plan. A business plan has many aims. It is primarily used to obtain financing such as bank loans, grants, private investment and other sources of capital investment for starting the proposed business. For this primary reason, a business plan should be drafted as realistic as possible, based on researched facts and not on “dreamed up” concepts. The business plan also serves to highlight the business vision and mission. The vision and mission must be real and appeal to the receiver of the plan as a vision or mission that is attainable. If the reader is convinced of such, then your business plan will indeed serve a good tool for obtaining your financing. There are several components or chapters to a realistic business plan and they are as follows: 1. 2. 3. 4. Opening Statement Executive Summary Company/Business Summary Products & Services 20 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. 5. 6. 7. 8. 9. Market Analysis Summary Strategy & Implementation Summary Management Summary Financial Plan Closing Statement.

Opening Statement: In this chapter, as the name implies, the opening statement is used to briefly introduce the reader to the intention of the business plan. It is used to indicate whether the plan is for obtaining financing or to be used as an appraisal of the business operations for a forthcoming period of time. Your opening statement should not be too long, one paragraph, two at most is ideal. Executive Summary: This section is written last but in the order of the business plan, stated just after the opening statement. In fact it is the first actual chapter of the business plan. This section is a comprehensive summary of the entire business plan and the most significant chapter of the plan. In the executive summary you should describe the Business, The Customer, Management, Objectives, Vision, Mission, Financial Highlights and the Start up Requirements. The reader, who is usually the Loans Officer or Investor, will read this section first. If the executive summary fails to impress or convince the reader of the business viability, you can forget about getting that start up loan because he/she won’t even proceed to read the rest of your plan. Chances are the plan may be returned or tossed in the garbage bin under the desk. Company/Business Summary: The company or business summary is a chapter dedicated to describing 21 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. your company or business to the investor. In here, it is important to state and describe the Owner, Location and Facilities and to provide an estimate of the Start up Requirements. Products and Services: Use this section to describe in detail, the products and services you will be offering in your business. In addition write about the Sales Literature you intend to employ in the promotion of the products and services. Speak also of the Technology and Systems that will be employed in the provision of the products and the services to your target customer and finally, use this section to highlight any possible plans for future product or service development. Market Analysis Summary: The ground work for composing this section of the business plan should have already been done, that is, if your followed the advice in chapter 1. Journaling, Studying Ideas and Crunching Numbers all contribute to an effective Market Analysis Summary. This Section is 100% dependent on the facts gathered during the development of the business idea and the feasibility stages. Use this section to describe the Market Segmentation, Target Market Segment Strategy, your Service/Product Business Analysis and the Competition and Buying Patterns. Strategy and Implementation Strategy: This section is necessary to highlight your strategy for promoting your product and service, stating your competitive edge(s) over your competition, describing your marketing and sales strategy. It is also important to 22 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. highlight your sales forecast and to list out the tasks and milestones in setting up the business and launching your product and services. Management Summary: The Management Summary is the chapter of the plan where you tell the investor of your strategy for managing the business. An investor will be very interested in this section because after all, it’s their money invested into your care! In the Management Summary it is vital to list the resume′ of key management personnel, your organization chart or diagram, the compensation plan and any other important information on employees and management staff. Financial Plan: Apart from the Executive Summary, the Financial Plan is the second most important part of the plan. Most investors or loans officers will skip through the body of the plan, to get to this section. Here is where all the numbers in the plan is explained. This section is for Highlighting Important Assumptions on the business and the market environment and for highlighting the Break Even Analysis Chart or Graph. The most important highlights of the Financial Plan are the Financial Statements. The Profit/Loss Projection is a financial statement that will basically highlight all income and expenses for the plan period and highlight the profit/loss made at the end of such period. The Balance Sheet Projection will give an indication of the value of the business at the end of the projected period. It should project the expected Assets, Liabilities and Net Worth of the Business. 23 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. The final part of the Financial Plan is the Cash Flow Projection. As it is said, “Cash is King!” This statement projects how the cash will be used in the operations of a business. Many businesses fail mainly because cash is mismanaged. Closing Statement: This is the final part of the plan and it is the closing summary. It is where you thank the reader and reinforce your intentions for seeking your own business.

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 5 Getting Start Up Capital

For the several successful businesses and companies I
have started or projects undertaken and the many that were unsuccessful, there is one lesson that I have learned from every experience. That lesson is “Money Follows Vision; Vision Does Not Follow Money!” This is to say that contrary to popular belief, you don’t need money to start a business. In this case you already have your vision (The Business Plan) and to the extent that you can market that vision, you will be able to obtain the requisite finance to start your operations. Unless you are born into wealth or have the backing of wealthy family or friends, then this truth won’t matter to you but for the typical ambitious reader, this truth is all you need to understand. Once your vision is clear and the business plan is solid, you should have the confidence to pitch your plan and share your vision with many. At this stage you don’t have to worry about your idea being stolen because you already made the business legal. The more people you share your vision and plan with, the greater probability there is of you obtaining the finance to start the business. In more theoretical terms now, there are several factors which will influence the success of getting the financing you seek. You must be able to demonstrate confidence both in the written plan and in the verbal presentation of the plan. Secondly, your plan must reflect smart and solid benefits to the investors and you must be able to convince the investor of such benefits. 25 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. Another thing I learnt from my experiences is that most banking officers have a very limited knowledge of business. In fact the majority lacks any entrepreneurial instinct and therefore, they most times fail to recognize potential in a solid business plan. Ever wondered why banks reject so many loan applications from small business owners? Well the answer is simple! The loan officer as an employee of the bank may never have had the exposure to a business or the desire to start a business. Their employment is secure and the entrepreneurial spirit is hard to comprehend. As a small business owner, I have found more success at obtaining loans and financing from fellow business owners or from private investors than from banks. In Trinidad and Tobago, there are special purpose state run companies specifically mandated to assist the self employed and small business owners with financing. In fact I have accessed financing through NEDCO – National Entrepreneurship Development Company in establishing my publishing company Kingdom Coaching Company which is responsible for publishing this book. When I wrote my first book, publishers were hesitant to publish my works because I was an unknown author. I registered my own publishing company, did my business plan, shared the vision convincingly which was to make publishing services accessible to unknown authors and today the rest is history as they say. Publishing my first book opened many doors and the today I can truly say that Money Follows Vision and not the other way around. In the end there are many ways 26 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. to obtain business startup capital and there are many institutions that offer such services, they are: Family and Friends: Usually the easiest to borrow from. You can benefit from zero interest payments on the loan, no collateral requirement and they usually don’t pressure you for quick repayment. They are usually close to your business though and may cause problems. Friends and family believe they have some natural right to manage your business because they loaned you the money to start up. It is best to establish from the onset, the boundaries of their involvement in your business so that you do not make enemies with your family or lose friends in the process. Private (Angel) Investors: Private investors or angel investors as they are more professionally called are more inclined to investing in new businesses. These individuals may have themselves evolved from ownership of small businesses and understand well the challenges of starting a new business. They will invest in projects or businesses where a return on investment is guaranteed and in the shortest possible time. Angel investors don’t usually require collateral however their interest rates on the investments are higher than banks, though in recent times, angel investors have been known to start demanding collateral against loans. State Run Development Companies: These bodies are by purpose designed and established to assist in the provision of startup capital. By approaching and accessing the government run institutions, one can also 27 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. benefit from the several incubator and training programs for developing the knowledge and management skills for small business owners. Loans are disbursed against very low interest rates and the collateral requirement is necessary but in most cases nonexistent. When I approached NEDCO, my loan was secured against household furniture items. Venture Capital Firms: VC Firms are more suited to larger corporations or limited liability companies. They are risk averse and will lend based on their acceptance of a solid business plan based on well researched figures, trends and market environment. A VC Firm’s investment takes the form of the purchase of a stake in your company which requires a seat on your board of directors. By investing in your company they become part owners of your business. There are many criterions to be met when seeking funding from VCs but the success of your business will benefit from the management input from the VC Firm. Banks: As mentioned earlier, banks are the least unlikely to invest in a small start up business. Unless you have an established history of banking, borrowing or saving with your bank, the chances are very slim to none that you can access a loan. Providing that your history is sufficient, and all your documentation is in order, approach your bank with every confidence of obtaining the loan. The interest rate at banks varies and the requirement for collateral is 28 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. an absolute must have. Banks though are also very aggressive in their collection of payments and repossession of collateral on default. Now that you have a clearer guidance on the ways in how to obtain Start up Capital, remember that “Money Follows Vision; Vision Does Not Follow Money.”

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 6 Establishing Financial Controls

Probably the most important aspect of starting and
operating a business is the establishment and implementation of strong financial control. Finance is like the life source of your business. It is like blood in human veins. In other words, a business is not a business without a financial component to it. In chapter 3 we discussed the business plan and touched on the Financial Summary which is in the main the skeleton for establishing financial control. Financial control simply means monitoring and management of the income generated and expenses incurred in the operations of the business. There are basic steps to establishing and maintaining control of a business’ finance. While there are many steps that the experts may suggest and recommend, there is no real rocket science to this very important aspect of running your business successfully. Some the simple steps that I have implemented in starting new businesses of my own are: 1. Opening a business bank account. 2. Maintaining detailed and accurate records for income, expenses, taxes, assets, liabilities and other. 3. Seek out an education in financial management. Your can do this by attending seminars or short courses. 4. Hire competent accounting staff or outsource professional services for preparing monthly, semi and or annual financial reports. 30 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. Opening a business bank account or merchant account is a very important tool in establishing financial control. A bank account for your business serves several important purposes. They are as follows: 1. A business bank account gives your business credibility. It says to your bankers that you are serious about your business and the way that the finances are controlled. It also gives your bank a front row seat to observing how your business finances are managed, in which case if it is in a healthy manner, can earn you favor points when seeking that loan. 2. Secondly, it establishes your business as a separate entity and discourages the co-mingling of funds. Many countries including here in Trinidad and Tobago have laws and or regulations that discourages the co-mingling of the proceeds of business and personal income. No doubt this is a measure to stamp out or prevent money laundering, a criminal activity, which can land a perpetrator some jail time. One of my early mistakes in running my first business was to believe that I could manage my company finances on my own. What a mistake! This cost me thousands of dollars in back taxes and bad debt and I learned that an education in accounting and outsourcing for further validation of the reports I recorded and prepared, was one of the best decisions I ever took and can assure you that it will be a good decision for you too`.

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HOW TO START UP…AND REMAIN IN BUSINESS. As your business grows you will recognize that the reports and the information therein will become very important. Good financial control and record keeping will serve as an advantage to you and your business when seeking loans or investment for business growth and in the opposite, poor financial control or record keeping can prove the undoing of your business. Establishing financial control apart from the other important steps highlighted in the previous chapters and those that follow will prove to be very important and beneficial measures in starting up and remaining in business.

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HOW TO START UP…AND REMAIN IN BUSINESS. Chapter 7 Considerations at Start Up

If you’re still reading up to this point it means you have
done most of the hard stuff already and you’re on your way to starting operations of your business. At this stage there are several considerations that need to be made to ensure the successful start up of the business. There are five (5) basic considerations at start up, they include: 1. 2. 3. 4. 5. Location for the business Privacy Hiring Employees Advertising Strategies and Furniture, Tools & Equipment.

In the following paragraphs of this chapter we will seek to expand on the five considerations listed above. Location: choosing a suitable location can prove tricky and may not seem important but it is a most vital consideration to be made in starting a business. It is vital because situating a business in the wrong location can spell disaster for start ups. For example, you wouldn’t set up a professional consultancy in an industrial estate or a retail store in a gated residential community and it is for these reasons choosing a good location is important. Retail stores are best suited for busy pedestrian traffic areas; manufacturing operations in industrial zones and professional services in city or metropolitan areas. 33 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. There are several types of businesses such as professional and practical services that can be started out of your home and consideration should be given to this option as it can save you money in the start up phase and shorten the time taken to start operations. If you’ve decided that you’ll operate your business from home then the next step is another important consideration. Privacy: all businesses should be operated in private and if not, disturbance free environments. For the most part businesses should be housed in accommodations separate and apart from competing activities. This is most applicable to home-based businesses, where privacy and disturbances are most commonly impacted and affects the best performance of the operations. If your business is located at home there are several steps that should be taken to ensure that productivity is not compromised, they are as follows: 1. Ensure Privacy. Keep your business space separate from common areas around the home. This can be best achieved by utilizing a spare room or garage space or in the worst case, isolate a corner in the home that you think you could manage some privacy. 2. Define Workspace Time. Operating a business from home can create a false sense of comfort and control. You should define set working hours and practice being on time to work. It is very easy to want to steal away from working time to watch TV or goof around. 34 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. 3. Set Working Time Rules. Where there is family around, be clear to discuss with them upfront working time from family time. Spouses and children can be very insensitive to your working time if the boundaries are not set in advance. By making clear the rules you will avoid breaking hearts or making your loved ones feel neglected and having the peace to work at home will be to benefit of the business. Hiring Employees: according to the size of your start up or the type of business you establish, hiring employees may be unavoidable. Where it is necessary to do so, it is important to avoid certain pitfalls that are mostly overlooked. Choosing bad employees from the start can stifle business growth and frustrate you whilst choosing competent employees will benefit you and the business. What to avoid when choosing employees. In choosing employees a small business owner should avoid two (2) important situations, they are: 1. Avoid Hiring family members or friends. Family and friends are always the first to pledge support and make themselves available for selection when you start out in your business. As the business prospers, it becomes more and more difficult to govern and instruct them, because of their misplaced belief of your obligation to them. They tend to believe that they become part owners of the business the longer they stay. 35 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. Furthermore, your leadership can be undermined or become ineffective especially if enforcing disciplinary action is required against family and friends. It is always better to keep family and friends just that and don’t try to make them your employees. 2. Avoid Making Promises you can’t honor. One of the errors that entrepreneurs make when hiring new employees is making promises you can’t honor. Many small business owners make this common mistake so as to put an exaggerated image of the business and as a result give employees a false expectation of working at your business. Giving an employee false hope is like putting dynamite in the hands of a toddler and leaving the match on the floor. Eventually that toddler (employee) is sure to find the match and you can figure out the result. Let’s just say an employee that lacks motivation or respect for you is an explosion waiting to happen. Things to Ensure you do when hiring employees. There are several things to ensure when hiring new employees, of which the first two points are very obvious. They are: 1. Ensure you don’t hire family members or friends. 2. Ensure you don’t make promises you can’t honor. 3. Be sure to hire qualified and competent staff. Ensure that qualifications are legitimate. 4. Ensure that references are supplied from the prospective employees at the time of application. 36 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. 5. Check those references for legitimacy. 6. Don’t discriminate! Give every applicant a fair chance at tryouts or in this case, an interview. Advertising Strategies: advertising is essential for attracting customers and clients and generating public awareness of your new business. There are many forms of advertising mechanisms that are available to small businesses and when choosing such, careful consideration should be made. One should avoid being enticed into using expensive forms of advertising your products and business services. Advertising is essential for business promotion and growth. There are different forms of advertising that small business owners can utilize for business promotion, they are as follows: Flyers and Brochures: flyers and brochures are the cheapest form of small business advertising and the easiest to produce. They are ideal for highlighting business and product information. A desktop computer with basic word processing software, a printer and a ream of paper and you have 500 flyers or brochures to distribute. Distribution of flyers and brochures can also be cost effective. They can be distributed in the newspaper as inserts or in the mail. Flyers and brochures can also make for personal hand to hand distribution. Business Cards: a business card is a highly effective tool for spreading awareness of your business, its products and services as well as personal information on the owner or representative. The business card is a 37 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. very personal form of advertising as it is usually distributed by hand to hand exchange. It can also serve as a tool for meeting and growing contacts at network and other social events. A business card may vary in size but the most common size 3.5 inches x 2 inches. On a business card you can and should include the business name, the representative’s name, business address, phone, fax and email contact, website address and if possible include your business logo or product photo. The good news for startups is that you can design and cut your own business cards or ordered at very low cost. Classified Ads: a small business can benefit from placing advertisements in the local newspaper or magazines at affordable costs. Classifieds are cheaper than display ads which require professional graphic design services. Instead classified ads are text based and the cost is determined by applying a rate per word per day. The classifieds sections of newspapers and magazines are widely searched by potential buyers and you can generally expect good results. Extra visibility can be achieved by manipulating or enhancing text fonts adding bullet points and highlighting key text and numbers. Business Documents: is a highly under-utilized and even unrecognized form of small business advertising. It is expected that during everyday business communications, several types of business documents are generated and exchanged between the business, its customers, employees, suppliers and regulators. These 38 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. documents include letters, invoices, quotations, receipts, purchase orders, reports and proposals. Images of products and or the listing of services can be creatively inserted on these documents in spaces in the header, footer or side bars and serve to increase awareness of their existence to persons whom the documents are exchanged with. The benefits of this form of advertising for small businesses are that it is cheap as no extra costs are incurred for preparation and distribution. Newsletter: newsletters are another form of small business advertising which is practical and inexpensive to distribute a well. Content in newsletter could be compiled in a one page document or even into multipage editions depending on the volume of information to be included. Newsletters can be distributed in ways similar to flyers and brochures and as well as via internet email. Mail Order Catalogs: mail order catalogs are more expensive to produce but costs can be bridged by producing fewer editions per year. Mail order catalogs can prove highly effective for persons operating product distribution businesses either home-based or where no formal walk-in warehouse stores are established. The mail order catalog by design is intended to be preserved or put away for later reference, thereby increasing its lifetime over business cards, flyers, brochures and newsletters. Internet Technology: internet technology is now more than ever the premier form of business 39 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. communication and interaction. Even with the advent of social media networking, using the internet for product and service advertising for small business is an invaluable tool and asset for the small business owner. The internet offers email for communication, websites for creating virtual offices and storefronts and several other applications for voice and other communications. There are several do-it-yourself email and website building services offered online and entrepreneurs can easily build and continuously develop the business websites online. Where website development knowledge is limited it is wisely recommended to hire a professional web-builder to design and develop your business website. Be sure to include information of everything related to your business and where possible, include a storefront to conduct sale of products and services. Make sure to include your email and website addresses on all your business documents to make it known that you indeed have a website or email. Having a professionally designed website may cost plenty upfront but customers appreciate a business with a website and email as it gives the impression of a legitimate and well organized business and offers reliability in business communication. Furniture, Tools and Equipment. The final major consideration every entrepreneur must make when starting up their new business is the choice of furniture, tools and equipment. These items are 40 | P a g e

HOW TO START UP…AND REMAIN IN BUSINESS. essential for ensuring operatives comfort and productivity of the business. Selections should be made on functionality and expensive items should be avoided if less expensive items can offer the same or close enough features and functionality. Keeping in mind that your business is new, it is vital to limit high upfront costs on items that depreciate over time and end up being liabilities rather assets.

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HOW TO START UP…AND REMAIN IN BUSINESS. Concluding Section One

In section one, How To Start Up A Business, we detailed
and discussed the steps necessary to inform individuals desirous of starting their own small businesses and the steps and considerations necessary. After reading section one, the reader should be clear on what is required to start their new small business. From the idea conception stage through to business planning, registration and incorporation, and physical planning requirements; enough information is disseminated to encourage and guide the entrepreneur in starting your business. If you have taken action and started your business, it is important that you continue on reading section two, How To Remain In Business where we will focus on policy, development and growing your new business. We encourage you to read on and hope that you will apply the recommendations offered in the following chapters.

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HOW TO START UP…AND REMAIN IN BUSINESS.

SECTION TWO

HOW TO REMAIN IN BUSINESS

Coming Soon!

For other books by the author visit
http://smedirect.webs.com/apps/webstore/
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HOW TO START UP…AND REMAIN IN BUSINESS.

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