(YoungBiz.com) - You've probably heard this saying before, most likely from your parents: If you fail to plan, you plan to fail.
Any success in life--from planning a party to starting a business--takes some planning. And while every start-up is different, by going through these seven phases of development, you'll be well on your way to building a business with a solid foundation.
Phase 1:Decide what you're good at. The greatest determinant of your success, of course, is you. That's why it's so important that you choose a business that's right for you, based on what you like to do and what you're good at.
To get the juices flowing on ideas, make a list of your hobbies, talents and work experience--any jobs or chores you know how to do. These are your personal business assets or skills.
There are basically two ways to earn money: 1) sell goods (merchandise), or 2) sell service (labor and knowledge). Now study your list of personal assets, and write down some ideas for goods or services that you could create and sell. You should be able to list at least 10 or more.
|Visit the Kauffman Center for Entrepreneurial Leadership online to learn more about starting a teen business.|
Phase 2:Choose an idea. Successful entrepreneurs not only choose businesses they'll like; they also capitalize on products or services that people need. (Hint: Think about jobs people don't like or have time to do.)
Go over the list you made in Phase 1. Which of the products or services you listed would draw the most customers? If you're not sure, consider conducting a survey in your community. It's important to strike a balance between your personal interests and what your customers need or want. After all, you want your business to be successful and fun.
Phase 3:Prepare for start-up. One of the most important things to do during this planning phase is to determine your start-up costs. Make a list of all the equipment, supplies and furnishings you will need to operate the company. Don't forget operating expenses such as your phone service, voice mail or pager, rent and transportation costs. If you're selling merchandise, you'll also have to make decisions about how much inventory to buy.
Once you know all the start-up expenses, you can start figuring out where to get the money to open the doors. Will you use your personal savings? Do odd jobs to earn the money? Get a loan from your parents? This phase calls for careful planning before you can move forward.
Phase 4:Be official. Now you're almost ready to get started. But before you open for business, most states require that you take care of some legal issues, such as getting a sales tax permit and registering your business name.
Some cities or counties require special licenses or permits to operate a business. And if you want to put up signs or hand out fliers in your neighborhood, you'll need to check with your homeowners' association to see if it's OK.
To avoid legal problems, go to your local city hall or Chamber of Commerce office and request information on the legal steps you may need to take before starting your business. For more guidelines, see "Keep It Legal."
Phase 5:Attract customers. So the day has finally arrived that you're open for business. If you're going to stay that way, you've got to tell the world that you've arrived.
While you're certain to get a few customers through word-of-mouth, you can't depend on that alone. There are lots of inexpensive ways to get the word out. Design and distribute fliers. Get some business cards printed. And start practicing your sales talk.
You will also need to brainstorm a long-term marketing plan for your company. Jot down all the different groups of people who could benefit from your product or service, like pet owners, elderly people or people with swimming pools. Then design a plan to get your sales message to each group of potential customers.
Phase 6:Take care of the money. You've heard stories about famous people who were very wealthy but managed their money so poorly that they ended up broke. It's the same with a business. Your business might be very profitable from the get-go, but if you don't have a plan for how you will manage the money that comes in, your business might struggle, or even fail.
Once you are open for business, you will need to find a system for keeping close track of all the money your business brings in as well as all your expenses. A good record-keeping system will help you know which customers owe you money, whether your business is making enough sales to cover expenses and when you can give yourself a raise. Good records will also help you know whether you owe taxes and, if so, how much.
Phase 7:Keep on growing. All successful entrepreneurs have goals. Setting goals allows you to measure your performance and make important decisions about the future of your business. The key to successful goal-setting is to be specific. For example:
- Put your goals in writing so you can remember, review and revise them. This allows you to stay on track or change tracks if something isn't working.
- Make your goals measurable. Instead of saying "I will increase sales," say "I will increase sales by 20 percent in the next three months."
- Set goals that are reachable, but challenging. If you are earning $100 a week, try to double it. A larger increase might be difficult; less than that might be too easy.
- Make deadlines for attaining your goals. This helps you chart your growth and keep from getting bogged down.
A successful business owner is someone who not only offers an excellent product or service, but who is also continually looking for ways to improve his or her business. Maybe that means looking for new products your business could offer or offering your services to a new group of customers. Be creative and stay on the lookout. You never know when that next opportunity will come your way!