31 Finance and Accounting, Understanding the Time Value of Money

Brainstorm ideas
Every new business starts with an idea. Maybe there’s something you’re really knowledgeable and passionate about, or perhaps you think you’ve found a way to fill a gap in the marketplace. Wherever your interests lie, it’s almost guaranteed that there’s a way to turn it into a business.

Another option is to open a franchise of an established company. If you choose to go this route, a lot of the legwork has been done for you. The concept, brand following and business model are already in place; all you need is a good location and the means to fund your operation.

Once you’ve narrowed your list of ideas down to one or two, do a quick search for existing companies in your chosen industry. Learn what the current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, but faster and cheaper), you’ve got a solid idea and are ready to create a business plan.

David Silverstein, a global business consultant and CEO of operational strategy consulting firm BMGI, cautioned would-be entrepreneurs against starting a business for the sake of being a business owner: You need a viable business model, not just an idea, he said.

“Businesses don’t start with simple ideas,” Silverstein told Business News Daily. “They start with problems to be solved [and] opportunities to do something better. Know your solution and your customer inside and out. Ensure you are passionate about what you are starting because you will be spending all your time with it.”

Build a business plan
Now that you have your idea in place, there are a few important questions you need to ask yourself. What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? All of these questions can be answered in a well-written business plan.

A business plan helps you figure out where your company is going, how it will overcome any potential difficulties, and what you need to sustain it. A full guide to writing your plan can be found here, but these are the basic sections you will need to cover:

What your business is about and how you will accomplish your goals.
Your extended goals, and how you will fill your market’s needs.
Your research on your target market.
Organization and management of your company.
Your service or product line, including copyright information and R & D activities.
Strategies for market penetration and growth.
Estimated costs and funding request (if you need financial assistance).
Assess your finances
Starting any business has a price, so you need to determine how you’re going to cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you are planning to make your new business your full-time job, it’s wise to wait until you have at least some money put away for startup costs and to sustain yourself in the beginning before you start making a profit.

While many entrepreneurs put their own money into their new companies, it’s very possible that you’ll need a little bit (or a lot) of financial assistance depending on the type of business you’re starting. A commercial loan through a bank is a good starting point, although these can often be difficult to secure. If you are unable to take out a bank loan, you can apply for a small business loan through the Small Business Administration (SBA) or an alternative lender like Kabbage, OnDeck or CAN Capital.

Startups requiring a lot more funding up front may want to consider venture capital. This is money, usually in the amount of several million dollars, provided to a fledgling company by a firm or business with the expectation that the backers will have a hands-on role in running your business. Alternatively, you could use an angel investor, a private individual that will provide up to about million for a project, or launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers.
How to Start a Business: A Step-by-Step Guide
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Every year, hundreds of thousands of people across the country take a leap of faith and start their own business. This path requires a lot of hard work, and many end up failing. But for those who survive, the rewards of entrepreneurship are well worth the obstacles they face on the road to success.

Think you’re ready to start your first business? Here’s a step-by-step overview of what you need to do to make it happen.

Brainstorm ideas
Every new business starts with an idea. Maybe there’s something you’re really knowledgeable and passionate about, or perhaps you think you’ve found a way to fill a gap in the marketplace. Wherever your interests lie, it’s almost guaranteed that there’s a way to turn it into a business.