Organizing the initial steps of a small business
September 8, 2006 2:22 PM Subscribe
Looking at starting a business in the spring. How should I organize my thoughts/plans/ideas?
As well as formulating a business plan (not because of seeking financing, which I am avoiding at all costs, but because it's just a good idea), I'll need to plan the business space rental and payment acceptance and internet connectivity, etc.
I want something that will help coordinate the efforts and research and not just the final resolution of those actions. Does such exist?
Bonus points if I can continue to use Linux and not resort to booting Windows for a piece of software to do this. More bonus points for *closely* related bits of advice on the initial stages of starting a business.
As well as formulating a business plan (not because of seeking financing, which I am avoiding at all costs, but because it's just a good idea), I'll need to plan the business space rental and payment acceptance and internet connectivity, etc.
I want something that will help coordinate the efforts and research and not just the final resolution of those actions. Does such exist?
Bonus points if I can continue to use Linux and not resort to booting Windows for a piece of software to do this. More bonus points for *closely* related bits of advice on the initial stages of starting a business.
Response by poster: unSane: Thanks, that helps a little.
At the risk of this falling into chat...there is very little to no chance that I can do this with 6 months of money to ride me through. However, there is very little upfront capital for this and very little ongoing expense to accomplish it, as well as no real risk to shutting it down if it doesn't work. Same rules apply?
posted by Kickstart70 at 4:52 PM on September 8, 2006
At the risk of this falling into chat...there is very little to no chance that I can do this with 6 months of money to ride me through. However, there is very little upfront capital for this and very little ongoing expense to accomplish it, as well as no real risk to shutting it down if it doesn't work. Same rules apply?
posted by Kickstart70 at 4:52 PM on September 8, 2006
I would be triple-darn sure there is a market for the product/service you offer and that you can get buyers/clients really quickly. I would highly, highly, highly, advise working in the industry you're trying to break into, as an employee first, and then use that experience to start your own. I would severely discourage anyone trying to break into a market with zero experience.
posted by vanoakenfold at 5:42 PM on September 8, 2006
posted by vanoakenfold at 5:42 PM on September 8, 2006
Response by poster: Agreed on all points. I've been in the industry for 16 years, and started in an identical shop. I've researched the amount of potential clientele and also noted that it's a hole that no one else has been able to fill in that market. I'm very certain I can make a go of it once I clear this first hurdle, but I also know that if I fail to prepare and cross this hurdle appropriately, the chances go down.
Just to be clear, it's an internet cafe in a rural location with massive tourist traffic who have been making previous public requests for an internet cafe.
posted by Kickstart70 at 7:32 PM on September 8, 2006
Just to be clear, it's an internet cafe in a rural location with massive tourist traffic who have been making previous public requests for an internet cafe.
posted by Kickstart70 at 7:32 PM on September 8, 2006
Are you serving food/drink? Look into any licensing you're going to need to get- food sales are generally regulated.
posted by mkultra at 9:20 PM on September 8, 2006
posted by mkultra at 9:20 PM on September 8, 2006
Response by poster: Likely at the start it'd be chips/pop/something prepackaged. I've also got my FoodSafe training from a while ago that I think is the main requirement.
posted by Kickstart70 at 9:31 PM on September 8, 2006
posted by Kickstart70 at 9:31 PM on September 8, 2006
This thread is closed to new comments.
Use mind-mapping software. I don't know what there is in Linux but on OS X it's Novamind. Fantastic way of brainstorming and turning the results into a structured plan.
Business:
There are two rules of small business.
1. Do not run out of cash
2. See rule #1.
Cashflow is everything. You need to learn to do a cashflow and figure out your worst-case scenario. If you have anything less than six month's worth of cash on hand, you are headed for disaster. Twelve months is much more realistic. You can have a very successful year but if you run out of cash while you are waiting to get paid, game over.
You need to figure out your monthly Burn Rate (BR) which is simply how much you have to pay out of your cash reserve each month in the early days to keep your business afloat.
Divide your Cash (including lines of credit) by your Burn Rate to find out how many months you can survive. The date on which your cash runs out is the Brick Wall (BW).
The key business tool is to continuously monitor the BW and keep it *at least* six months at bay. Once it is less than six months away you need to make urgent contingency plans and/or changes to your business model.
How do businesses go bust? At first, slowly, and at the end, quickly.
Hire a good accountant and *do not* drag your taxes (ie build up large tax liabilities which you have no idea how you will pay off). I say this because deferring taxes is a standard accounting ploy but it can be very dangerous for a small business.
posted by unSane at 2:48 PM on September 8, 2006 [3 favorites]