Money Talk

     By Yvonne Messer, Montgomery

If you’ve been thinking about launching your own business, you may have experienced some of the anxiety and thrill that’s part of stepping out on your own. Becoming a business owner is a big move, especially if you’re leaving the security of a large corporation. It also involves taking a risk-one that can bring significant rewards, both personally and financially. Here are some things you can do ahead of time to make sure you get started on the right foot:

Do you have what it takes? An important first step is to decide if you’re the kind of person who would enjoy being a business owner. Looking at your personal expertise, management skills, financial capacity, talents and interests can help you make that decision.

Conduct your own market research. Examine the demand for the type of business you are considering. Market research can help you assess your competition, understand the industry and define your target market. Use the Internet, Small Business Administration or survey potential or existing customers and competitors.

Develop a business plan. Which identifies your goals and provides tactics that will help you become successful. Creation of a business plan is an especially important early step, as most lenders will require a plan before providing financing for your venture.

Seek help from other professionals. A financial advisor can help you understand your financial situation, establish a business plan and assist you with start-up issues. It’s likely you’ll also need the services of an attorney and an accountant. Relying on other professionals can be key to ensuring that you follow the rules and procedures necessary to running a successful business.

Find the financing you’ll need. When estimating the amount of money you’ll need to start a business, be sure to take into account the cost for building, equipment, mandatory insurance programs and staff. It’s also wise to secure enough capital to cover your operating expenses-like your salary and loan repayments-for at least a year.

You can finance a business in several ways-personal savings, loans from relatives or friends, traditional bank loans, government or venture capital loans, etc. A financial advisor or other professional can help you determine potential resources for securing funds to get your business up and running.

Insure your risk. Some lenders require that you carry enough life insurance to cover any outstanding loans should something happen to you.

Take advantage of available resources. The U.S. Small Business Administration has a web site (www.sba.com) and local offices. The SBA’s Office of Business Initiatives operates a toll-free "answer desk" at 1-800-8-ASK-SBA.

Starting a new business can be exhilarating. The investment you make in early planning is critical. By carefully laying the groundwork and thoughtfully considering your options, your new business can become the foundation of your future security.

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