As Easy as 1,2,3

Timing Is Everything

Lynskey suggests you make a list of everything you need to do before opening your doors. Then just start backing up from that point, he says. A list makes you put things in order, and it will grow longer as you write it.

"This doesn't take a rocket scientist. There's an obvious order to most of the items on the list," he says. "You'll see lots of dependencies, that clearly this item needs to be done before that one. Build potential problems into your opening day."

This is especially important if you're opening a retail store, where a target opening date can be pushed back three months before you know it. It took Rebecca Velasco, 40, founder and owner of Muse, a women's apparel store in Newport, Rhode Island, more than one year of planning before her store opened this past April. Even with a background in women's retail, one of the first things she did was seek out a business advisor at her local SBA office.

"Without his insight, I probably wouldn't have been able to foresee all the things I had to do," Velasco says. "I wanted to do everything right because I didn't want to backtrack, open wrong and get penalized."

It's All About Who You Know

Learn how to make the most of your relationships with the folks who'll keep you out of trouble, help you make decisions and share their business knowledge with you:

Velasco spent all of 2001 writing her business plan, and spoke with an accountant to learn more about tax laws and setting projections. Ultimately, her business hinged on landing about $50,000 in outside financing. Her parents lent her $25,000, but it didn't cover all the start-up costs. "It was the very first thing I had to think about because I didn't have the money," she says. "Your whole plan changes based on your funding issues."

Velasco held off on large expenses until she had secured additional financing. When she received a $15,000 loan through the city of Newport last February, things started falling into place quickly. She signed a two-year lease on a 500-square-foot retail space after hiring an attorney to read it, contacted a merchant services company to set up credit card processing, purchased used clothing racks and ordered her first inventory. Her approach wasn't without beginner's mistakes, however. She opened her business account where she did her personal banking without realizing the rates were astronomical. "I had to close that account and open another one later," she says. "I would have saved a lot of money if I hadn't acted so quickly."

Make sure you're set with the state in terms of licenses and permits, then think about what you need to operate, Velasco suggests. Muse projects 2003 sales of $250,000.

T Minus 1 Year

Keep to this schedule, and use the year leading up to your business's grand opening most effectively.

  • One year before you open: Research your idea and take a business workshop.
  • Six months before: Do a competitive analysis, start writing your business plan, and think about where you might locate your business based on demographics.
  • Four months before: Do a cost analysis; review potential leases with an attorney. Choose your business structure with the help of a lawyer and an accountant. Join some business and trade organizations.
  • Three months before: Establish your rough financial objectives, sales forecast and pricing; write your marketing and personnel plan. Prepare your income statements and balance sheets, and settle on a business name. Consult with an accountant.
  • Two months before: Meet with a banker to review your business plan and secure financing. Then get ID numbers, open your bank accounts, decide on a merchant services company, get insurance coverage, set up your bookkeeping system, order first inventory and schedule any leasehold improvements.
  • One month before: Do a final check on financial statements, office setup and display, legal, licensing and utilities. Send out announcements and start your promotional push.
  • Open your doors!

Source: The Pennsylvania Small Business Development Center/Gannon University SBDC

Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the February 2003 print edition of Entrepreneur's StartUps with the headline: As Easy as 1,2,3.

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