Making sure you keep costs down and sales up is important to the success of any enterprise.
Tools and Equipment
What are the essential tools and equipment you will need? Do you have them, or will you have to get them? Which items are accessories (e.g. nice to have) and which are critical?
For example, many service-oriented businesses can be run from the home reducing costs considerably. What will you need in the way of furniture and computers and telephones? What about banking considerations, forms and paperwork? Can you drop ship your product (have the
manufacturer deliver directly to the customer in your name) or will you
need inventory? If so, how much inventory will you need? All of these questions will help determine how much you will need in the way of starting capital and working capital.
Are you versed with the supply and demand information side of the business? Do you know how prices are set, how services are completed, how delivery is made? What are the keys to success in this type of business and do you have at least two or three of them?
Have you spoken to your target market/potential customers to find out what is important to them? What about interviewing members of trade
associations, suppliers and even your competitors? Remember that knowledge is power in any business. The more information you have about the business, the better you will be able to handle fluctuations and problems.
What is the potential for failure and can you compensate for the risks? What additional opportunities for expansion or change are there for the future?
Having a contingency plan is always good. For example, you may open a new Security Company to sell security equipment, but find once you’ve started that the monitoring side of the business seems to be in greater demand. Be ready to change your area of concentration to take advantage of that information. Or, suppose you had planned to use direct mail contacts as your primary advertising and find that telemarketing will work better. Be prepared to do it. Contingency planning and flexibility are two main keys to success especially for the new and small business.