How to start a business


June 20, 1993|By Niki Scott

If you can provide a needed product or service, if you're something of a risk-taker, and if you're a hard worker and a dedicated optimist, you might have what it takes to run your own business.

We talked about the traits entrepreneurs need in order to succeed last time. This time, let's look at the first four steps you'd have to take to start your own business, and at six specific resources that are available to you.

Step 1: Research, research, research. Check your competition -- who's already providing the same sort of service or product you're planning to offer? Is there room for more of this product or service in your immediate area? How would your company differ (specifically!) from the competition?

Step 2: Formulate a plan that includes detailed information about your service or product, the results of your marketing research, the manner in which your business will operate, and a (pessimistic!) estimate of your start-up and first-year costs.

You'll need this proposal to show bankers or other investors, and it will help you organize your thoughts, as well. Since there's an industry standard for such plans, consider getting advice from friends who've done it or hiring an expert.

Step 3: Start the search for the financing you'll need to run your company for at least one year -- the minimum time most experts advise new-business owners to count on without making any profit.

The Small Business Administration (SBA) is a good place to start, although money is tighter there than it used to be.

Try local banks, as well. You might have to take out a home equity loan in order to get the money you need, but current low interest rates are on your side.

If you can't find an institution that will lend you money, consider offering independent investors in your business community stock in your company (with contracts drawn up by a qualified attorney) or, as a last resort, borrowing it from family members or friends -- again, only with a legally binding contract.

Step 4: Promote, promote, promote. Set money aside for advertising and marketing your product or service -- to fail to do so is the worst kind of false economy -- and try to interest local newspapers, radio and TV stations in interviewing you, as well. Also join professional and civic-minded groups in your area.

And if you need assistance, advice and, in some cases concrete financial help, the following organizations are excellent resources:

* The SBA. For information about SBA programs (including start-up loans) and referrals to offices in your area: (800) 8-ASK-SBA.

* National Association of Women Business Owners (NAWBO). This organization offers mentoring and networking to women who've been in business for at least one year. Join by calling (800) 892-9000.

* American Women's Economic Development Corp. (AWED). This is the place to turn for various kinds of training, plus assistance in writing your business proposal; (212) 692-9286.

* National Association for Female Executives (NAFE) Venture Capital Program offers start-up grants ranging from $5,000 to $50,000 to qualified members, in exchange for a share of your profits. Membership costs $29; (800) 927-NAFE.

* Association of Black Women Entrepreneurs offers business counseling, networking contacts and a newsletter to members. Membership fees range from $15 to $56; (213) 624-8639.

* Service Corps of Retired Executives Association (SCORE). This organization is made up of retired executives who volunteer counseling, training, assistance in writing business proposals and advice about how to run a company to entrepreneurs of both sexes; (800) 634-0245.

) Universal Press Syndicate

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