What does it take for a person to start a business

Let’s name this person Mr.X

Mr. X can follow these 6 pointers to start his own business.

A. Scribble down a 1-page business plan.

To get started, Mr. X should create his own simple, one-page business plan that is a high-level overview of the small business you’re about to start.

1. Define your vision. What will be the end result of Mr.X’s business?
2. Define your mission. Different to a vision, your mission should explain the reason Mr.X’s company exists.
3. Define your objectives. What are you going to do — what are Mr.X’s goals — that will lead to the accomplishment of his mission and his vision?
4. Outline your basic strategies. How is Mr.X going to achieve the objectives he just bulleted?
5. Write a simple action plan. Bullet out the smaller task-oriented actions required to achieve the stated objectives.

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B. Fix a budget.

We highly recommend Mr.X keep his costs as low as possible, he’ll still need to determine a budget and how much he’ll be able to spend to get started. If he is self-funding, he should be realistic about numbers and whatever he should anticipate his budget to be. We’ve found that an additional 20 percent tacked on for incidentals is a realistic overage amount that will help him plan his burn rate.

His burn rate is how much cash he’s spending month over month. It’s an important number for him to figure out to determine how long he can stay in business before he needs to turn a profit.

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C. Fix a legal entity.

Filing paperwork to start a business costs money. Often, depending on the business’s state, it can be a lot of money. Mr.X will need to account for city or municipality licensing, state incorporation or business entity fees and more. Do a thorough search ahead of time to determine what the filing fees are for his city, county, and state before starting any business.

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D. Wisely keep a check on the funds

Whatever business entity Mr.X decides on, he should keep the funds separate from his personal accounts. This is a big mistake that makes tax time and financials so confusing. It’s really easy to set up a free business checking account with his local credit union or bank. All he’ll need is his filing paperwork, sole proprietor licensing information and an initial deposit to get set up from most financial institutions.

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E. Get his own website.

Regardless of whether his business will be brick-or-mortar or online, he’ll need a website, and that means securing a URL. Popular domain sites such as HostGator and GoDaddy will allow you to search for the website domain address of his choice and purchase it for as little as $9.99.

If he is starting an online business, he can tie his domain to an online shopping cart and storefront such as Shopify for a low monthly fee, or he can build a basic website himself on top of his URL with do-it-yourself drag-and-drop site builders such as Weebly for a low fee. Both are less than $100 a month.

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F. Assess sales.

Mr.X must have enough of a foundation now that he can start testing some sales. Try to spread the word in inexpensive and creative ways.

If he has a service-based business, he should get involved with his local chamber of commerce or small-business chapter immediately and ask what resources are available for him to speak, present or share information about his business. If he has a product-based business, he should test the viability of his product at local swap meets, farmers markets or other community events to test what the public really thinks (and if they’ll purchase) from him.

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