There are some important issues to consider when starting a small business.
Small businesses here in the United States currently represent over 98% of the of the labor force (Business Essentials, 2003). When starting a new business you will need a business plan and financing. You must consider the legal issues involved as well as structure, especially when dealing with a family business.
A business plan is a valuable tool to allow a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities (Quicken Small Business, 2003). The businesses plan is not difficult to do. There are various formats and outlines available. Depending on your needs, your business plan can have all or some of the following; description of the company, produce or service, market, forecasts, management team, and financial analysis (Quicken Small Business, 2003). A business plan will help the business owner decide how long it should take for your business to become profitable, and if it is worth pursuing.
Financial institutions and investors will more often than not require a business plan when you apply for any type of loan or funding.
There are many different financing options available to the small business owner. There are two basic types of financing, equity and debt financing. If your firm has a high ratio of equity to debt, you will probably seek debt financing. Most small businesses are limited to equity financing since they have limited equity available (SBA Financing Basics, 2003). Some of the most popular types of financing are; venture capitalists, small business investment companies (SBIC), friends and family, personal savings, banks, investors and governmental agencies (Business Essentials, 2003). The SBA, Small Business Association, has many financing options available too; Basic Loan Guaranty, Certified Development Company...