Our July, 2002  newsletter is entitled "Initial Assessment of Your Business Idea."   Our newsletters feature articles on various aspects of preparing a business plan and over time should lead you through the entire business planning process.  

New Product - "Do-It-Yourself Financial Projections"
Our latest product is a Do-It-Yourself Financial Projections template that leads you through basic questions about your business plan and allows you to prepare your own three year financial projections in Microsoft Excel.  For only $19.95 (US$) we will e-mail the template to you and will be available to answer any questions you may have while you prepare your template. For more details......

Initial Assessment of Your Idea
Before you get too involved in spending time and money on your business plan you should ask yourself some basic questions about your idea. Will you be able to manage your business? Can you become an entrepreneur? Are there any major weaknesses to your idea that should be identified now? Are you getting proper advice? This newsletter is designed to help you answer these important questions before you begin your business plan.

Characteristics of an Entrepreneur
Most entrepreneurs put in very long hours, work extremely hard, are required to make financial and family sacrifices, and have to deal with a lot of stress.  After all this, there is no guarantee of success. Before you start your own business, ask yourself if you are willing to make these sacrifices.

The majority of business failures can be attributed to inexperienced or incompetent management. It is very important that you assess your personal strengths and weaknesses and become fully aware of what is involved in running your own business.

Ask yourself how many of the following strengths you possess:
Physical Resources - Do you have the stamina to put in long hours?
Family Support - Will your family support you and can you afford to take time away from your family to run your business?
Setbacks - Are you prepared for a lot of work? Very few entrepreneurs achieve instant success.
Risks - Are you comfortable taking a risk?
Discipline - Do you have the perseverance and personal drive to keep going after a setback?
Responsibility - Being your own boss means that you have nobody to report to, or to motivate you. Are you able to stay focused on your goals?
Leadership - Do you have the leadership qualities needed to deal with employees and customers?
Communication Skills - Do you have the communication skills required to deal with customers and properly market your business? Are you a good listener? Do you have good writing skills?
Decision Making - Are you comfortable making decisions? As a small business owner you will have to make a lot of them involving both your business and your family.
Problem Solving - Do you have what it takes to solve problems? Can you work through tough situations? Can you find a creative solution when one is required?
Willingness to Seek Advice - Are you willing to seek and listen to good advice? In many situations, making the proper decision will require professional help from your accountant, lawyer, consultant or economic development officer.
Managerial Skills - In order to run your own business you must be a generalist who can deal with operations, finance, marketing and staffing. You must know a little bit of everything and be able to wear many hats.
A Network of Contacts - Contacts in the community often develop into customers. Industry contacts can give you advice, keep you up to date about industry trends and assure that you are getting good service from your suppliers.

Obviously, no one person will be blessed with all the above skills. As important as it is to possess most of the above, it is equally as important to be able to recognize your weaknesses, and then get help by hiring a good advisor or by working with employees or partners who compliment your skills.

Business Reality Check
Before you spend a lot of time and money preparing a business plan, sit back and ask yourself some simple but key questions about your idea. These questions are a "Reality Check" to determine whether your idea makes sense.  It is not meant that you go into a lot of detail at this point to answer these questions, but you should have a "gut feeling" as to whether or not you can answer them positively.

These questions centre around five issues.  These are very important questions. They are also the questions that bankers and other investors ask when they are reviewing business plans.

1. Do you have the management capabilities to run your business? - Are you going to be able to manage this business? Do you have management experience? Do you have experience in the industry? Do you know who your suppliers will be? Do you know enough about the financial aspects of the business? Are you good at dealing with people? Are you prepared to work hard? If you are weak in any area, seek assistance from professional advisors.
2. Will you be able to get the financing? - Starting a business requires proper financing. Ask yourself up-front if you can acquire the money you will need to start your business. Your plan must make sense to potential lenders or investors. It is critical that you have some of your own money to put into the business as equity. Most lending organizations insist that the owner contribute enough equity to cover 10% to 20% of all start-up costs.
3. Do you have a viable product or service? - Have you got a good product or service? Will your product be accepted by your potential customers? Usually you will have a "gut feeling" about your product. However don't hesitate to ask the advice of friends, industry experts, or consultants. In some extreme cases, you may want to have a Market Feasibility Study completed before you proceed any further with your business planning.
4. Do you have a good location for your business? - You have all heard the expression that the three things a successful business needs are: location, location and location. Where you are going to be located in relation to your customers, and the ease in which your customers will have access to your business is perhaps one of the most critical elements to being successful. This is true for most businesses, whether they be in retail, service, or manufacturing. If you do not have a good location, you should think twice about going any further with your plans, or you should wait until a better location becomes available.
5. Will Your Plan Work? - Your business plan, of course, will deal with this question in detail. However, at this point, you should objectively ask yourself "do my preliminary plans make sense?" Don't be afraid to ask others what they think.

Seek Professional Help
Professional advisors, including accountants, management consultants, economic development officers and lawyers, can assist you in preparing your business plan. Considering all the time, effort and money you will be spending to get your business up and running, good financial, legal, and planning advice is one of the best investments you can make. Good advice now may help you avoid major problems down the road.

We will be e-mailing regular newsletters and business planning tips to those who have subscribed to our mailing list.

If you would like to be on our mailing list please send an e-mail to rutledge@mts.net with "Subscribe" in the subject line.