Tuesday, December 30, 2008

Am I ready to start my own business?

The thought of owning your own business and being the master of your own domain is exciting, challenging and somewhat scary. Many times people enter businesses without asking themselves key questions that could dissuade them from making the decision to go out on their own.


Ten Questions to Ask Yourself Before Going into Business

1. Is my product or service different from others already in my market area?
2. Do I have the right kind of business experience to support this business?
3. Can I prepare a detailed, credible business Plan for the first three years?
4. Am I able to take responsibility?
5. Am I a good organizer? For myself and others?
6. Am I ready to put in the long hours that probably are necessary for the first few years?
7. Am I ready to stick to it even in rough times?
8. Do I have the full support of my family?
9. Do I have adequate resources and credit? And maybe a bit more?
10. Is my health up to the hard tasks ahead?


Richard Strug

Tuesday, December 23, 2008

What is a business plan and why do I need one?

When you take a trip, the smart traveler plans their route in advance, making sure there are sufficient rest stops, gasoline stations, hotels that accept pets [when required], and alternate routes in the event of a detour that could delay arrival at the designated destination. A business plan is a road map for the entrepreneur.

A business plan precisely defines the business, identifies goals and serves as the company’s resume. It illustrates the operational and financial aspects of a business. It assists in resource allocation, minimizing unpredicted complications, allowing owners to make good decisions. Because it provides specific and organized information about the company and how borrowed money will be repaid, a good business plan is a crucial part of any loan package. Additionally, it tells personnel, suppliers and others about company operations and goals. Business plan formats are fairly standard; the same format may be used by someone who wants to start an electronics firm as a person seeking to start a daycare center.



Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, December 16, 2008

How do I obtain a loan from the SBA?

When you apply for a loan to start your new business or to expand your current business and are unable to secure that loan from a bank, assistance could be available from the Small Business Administration (SBA).

The SBA does not provide funding for direct loans nor does it provide grants/low interest rate loans for business start-up or expansion. The SBA does, however, enable its lending partners to provide financing to small businesses when funding is otherwise unavailable on reasonable terms by guaranteeing major portions of loans made to small businesses. The eligibility requirements and credit criteria of the program are very broad in order to accommodate a wide range of financing needs.

Here's how it works: When a small business applies to a lending partner for a loan, the lender reviews the application and decides if it merits a loan on its own or if it requires the additional support of an SBA guaranty. SBA backing on the loan is then requested by the lender. In guaranteeing the loan, the SBA assures the lender that in the event the borrower does not repay the loan, the government will reimburse the lending partner for a portion of its loss. By providing this guaranty, the SBA is able to help tens of thousands of small businesses every year get financing they would not otherwise obtain. To qualify for an SBA guaranty, a small business must meet the SBA’s criteria and the lender must certify that funding could not be offered on reasonable terms without the SBA guaranty. For additional information, visit the SBA’s Web site (www.sba.gov/financing).

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, December 9, 2008

Am I capable of starting a business?

We are facing uncertain economic times. Before investing in a business it is of utmost importance to ask yourself, “Am I ready?” To help you in that thought process, here is a question you should ask yourself:

How do I determine whether I am capable of starting a business?

Compare your skills and expertise with those who are successful in similar business pursuits. Analyze what particular attributes and operational capabilities made other businesses profitable and viable in the marketplace. Can you duplicate and surpass the capabilities that other successful businesses possess? What unique skills or edge do you possess to obtain a sufficient share of total market in the area you plan to serve? What level of capitalization, technical acumen, energy, passion, organizational strategy, other resources or equipment can you incorporate into the business to command the essential market share for viability?

Review business journals and other comparative studies that identify the requirements necessary to operate such a business. Based on your findings, develop a strategy for what should be incorporated into business operations. If possible, do a small scale sample survey and market penetration to test the waters in terms of business vulnerability.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties