The Basics of Starting a Small Business

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Thinking of starting a small business? Unless you're using your own money, you'll need to obtain financing.

For many people, an important part of living the American Dream involves having the chance to take a stab at being one’s own boss by picking up on an idea and turning it into a profitable reality. And now, when a lot of folks are actively seeking career changes (by choice or necessity), it may just be the ideal time to test the entrepreneurial waters by starting a small business.

Unfortunately, the statistics regarding annual new business start-ups and failures can be alarming. It seems that roughly eight of every ten new ventures fail within five years. But there’s no reason why yours can’t be one of the 20% that survive and prosper! To help insure that’ll happen, however, it’s a good idea to study some of the available literature on the subject, and to consult with as many professionals as possible.

No business activity should, for example, be undertaken without the advice of lawyers and accountants, and a smart entrepreneur will also enlist the aid of the nearest field office of the Small Business Administration (SBA), the only federal government agency specifically set up to assist the potential (or practicing) small-business person.

Get Organized

First of all, you need to establish a business plan that outlines [a] your objectives, [b] your potential market, [c] your plan for reaching that market, and [d] your method of operating the business. Before you take even the first step toward locating financial backers, you should have those items thought out and the answers presented in writing. After all, no investor can be expected to take an interest in sponsoring your venture if you haven’t shown enough interest in it yourself to set down a detailed plan of action.

  • Published on Mar 1, 1983
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