To begin with, it worth being mentioned that starting any business is extremely individual process. It does not allow to rely on universal and fully correct predications as some risks are always relevant to appear. Notwithstanding this fact, businessmen are still required for deep and comprehensive “start-up” analysis. This is known as mandatory preparing stage. Often, it is mistakenly identified to business plan design only. This approach is fundamentally incorrect, as business plan is just one of several issues to be addressed with business starting. Considering the assignment of analytical essay writing, the next thesis is proposed: proper “starting of a small business”strategy involves three separate, but closely interrelated stages – identification and evaluation, organizational issues andbusiness plan design. In this paper, issues about all three of them will be addressed. By outlining the substantial volume of each of three stages, the understanding of their interrelation will be reached.
1. Identification and evaluation.
In fact, this stage requires exploring and research. It is important that it has to be conducted before the start of business plan writing. The first aim here is to get the business idea. In this order, it is regularly suggested to take ideas that correspond the specifics of subject’s skills and knowledge. At this part DarrellZahorsky wrote: “A business opportunity can have an incredible upside only if you bring the skills required to succeed. If the business requires you to go way outside your comfort zone, it might be better to find something that more closely mirrors your skills” (Zahorsky 1). Being clear with the business idea,it is time to go to its evaluation. Eventually, dealing with evaluation there is the list of points to be considered. However, the main of them look in next way:
Target identification.This step requires to get the clear understanding what researchable market will be entered.
Find the right proposal. At this stage, it is important to find out if future business proposal meets needs and wants of consumers from identified market.
Look into the future. At this part, it would be helpful to consider the achievements of modern technologies and other factors (f.e. legal regulations) that can make business proposal irrelevant in the nearest future (Potts 1). In other words, the next question should be raised – is there any real insurmountable outside danger to business?
By passing all these steps, the next to think about are organizational specifics.
2. Organizational issues.
In his article, Ismael D. Tabijestated: “The mandatory step before developing your plan is the pre-business checklist which encompasses legal structure to be used, maintenance of business records, insurance coverage, resources, compensation and financing” (Tabije 1). Actually, the list proposed by mentioned economist seems to be the most comprehensive among all found. The only point to be added is getting license and permits. Among all noted positions, the structure of business is the most important point. In this order, starting businessmen may pick one of next legal forms: sole proprietorship—unincorporated; partnership—two or more persons carrying out a trade; corporation—prospective shareholders exchange money, property, or both, for the corporation’s capital stock.; S corporation—an eligible domestic corporation. At this part, some legal consultation should be required to get best ratio of cons and pros to every individual case. As for accounting systems, small business is able to make choice between cash and accrual accounting. Whatever the choice is, serious attention is required to be paid to financial structure. Dealing with business location, the first issue to address is office space. The options are shred office space, home office, purchase or leasing. Then, it is time to think about essentials and equipment. Last few years, the scientific thought reached top point in working space organization. Reference to competent will help to maximize business efficiency and reduce negative impact of working stress. Business insurance is the last crucial issue to talk about. Each owner of small business takes responsibility to manage probable risks and insurance is irreplaceable helper at this part. As for its types, three may be reminded: Business property insurance; Business disability insurance; Business liability insurance; Errors and Omissions insurance.
To sum up, organizational issues are extremely important to provide the needful background to every starting business. Aiming to be maximally creative, every beginning entrepreneur ought to remember that proper organizational approach is even more crucial to survive and stay relevant on identified market.
3. Business plan
The importance of business plan hardly can over esteemed with small business start. Especially, there is a talk about necessity of outside investments involving. To get the meaning of business plan importance, the words of Elizabeth Wasserman are to the place: “For those who just starting a business, writing a business plan is a crucial first step. It can help you describe your product or service, detail your marketing strategy, and lay out your sales and operational forecasts—including the ever important cash-flow projection so as to keep your business on track for profits”(Wasserman 1). Talking about “perfect business plan”, there is still no clear answer to question how should it look like. However, there are still some universal and general tips. The first step is proper presentation. In this order, a business plan has include cover sheet stating the principles or business, the name of business, and the address of it. It is also suggested to provide a quick reference guide to the topics covered in plan, following with a table of contents. Then, great care should be taken about the sections of business plan: executive summary; company overview; business offering; marketing plan and analysis; strategy and implementation; financial projections. Further in this paper, the points that should be included into each of sections will be listed:
- Executive summary – background about company, the market opportunity, a mission statement, capital requirements, competitors, an overview of management, business’s competitive advantages, and a summary of financial projections over the next three years. All the highlights of business plan should be placed in this section.
- Company overview – more information about business: why and when it was formed, its mission, strategy, business model, strategic relationships, management and personnel data.
- Business offering – frankly, it is all about the direction of business: what services are provided or what products are produced.
- Marketing plan and analysis – involves all issues about business’s market strategy: market analysis, advertising, customer service, sales, and public relations.
- Strategy and implementation –all details concerning about involved solutions and expected outcomes, dates or deadlines.
- Financial projections – includes forecasted profit and loss statements, balance sheet, and cash flow statements for the next three years (Wasserman 2).
Keeping appropriate outline is useful to make business plan maximally pithy and impressive to potential investors. At last, it should be said that at this stage requirements for special soft or professional consult (f.e. market research) will additionally benefit expended efforts.
To sum up, carried out analysis showed the complex and multifaceted nature of business starting process. It is assumed that some certain issues were not noted in paper. However, conducted research allowed to prove thesis stated in the beginning. The point is three mentioned stages of proper small business starting strategy allow to get the most reasonable approach to business’s relevance, potential, risks, pros and cons evaluation. Thereby, it was one more time proved that identification of business start to business plan writing only is unacceptable. Frankly, made analysis allowed to get the outline to business starting activities as they should go one by one. It is assumed that each of three stages may involve some additional issues accept mentioned ones. However, the pattern remains the same in any case, notwithstanding peculiar properties of started business. The value of proper business start strategy is determined with its ability to make reasonable forecasts about its validity, relevance and profitability; to predict some possible risks and to attract outside investments. Thus, maximal efforts expanding at this stage is the main ground to business success in future.
Potts, K. (2003). “Starting a Business: Advice from the Trenches”.A list apart.com. Retrieved from http://www.alistapart.com/articles/startingabusiness/
Tabije, Ismael. (2011). “Starting a business: strategies, ideas, solutions and tips”. Best management articles.com. Retrieved from http://starting-a-business.bestmanagementarticles.com/
Wasserman, E. (2011). “How to Write a Great Business Plan”.2p. Inc.com. Retrieved from http://www.inc.com/guides/write-a-great-business-plan_pagen_2.html
Zahorsky, D. (2010). “8 Simple Rules for Rating A Business Opportunity”. About.com. Retrieved from: http://sbinformation.about.com/cs/businessplans/a/8rules.htm