Small Business Establishment, Development and Management

Essay by drauzenclauz70University, Bachelor'sA+, April 2005

download word file, 4 pages 5.0

With more people venturing into the business world, the openings of new businesses seem to be a popular move. It is believed that there are two reasons for starting a business: An inspiration for a great idea and secondly the desire to enter a new market. With the need of money and the lack of jobs suitable for their needs, people are finding themselves researching various ways to start a business of their own, mainly, in a field they know well. Whether buying a franchise or an existing company, or simply starting from scratch, a business plan is an essential first step in starting up a firm.

A business plan is essentially your firm's resume. It organizes information about your company and its goals. In detail, the plan should have an overview introducing the reader to the company and its products and services; the company's competition, a marketing strategy entailing product promotions, pricing and strategies for distribution.

Management, staff and hiring procedures are discussed as well as lease or rental agreements and insurance. An implementation and a financial plan include a pro-forma balance sheet which compares what your business owns to what it owes, an income statement which compares revenue to expenses, defining daily operating cost versus overhead.

The Small Business Act of 1953 created the SBA to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns." Calculating expenses to determine startup costs, depending on the business, is the beginning to either equity or debt financing. Wealthy individuals called venture capitalists are the main source of equity funding - which essentially is the use of stocks and/or earnings to raise money. Without much interest in the retail business or real estate, their niche lies in the marketplace where they are often found seeking 20%...