Key fundamentals, regardless of what type of business you’re starting, to consider when starting a business

Personal evaluation

Begin by taking stock of yourself and your situation. Why do you want to start a business? Is it money, freedom, creativity, or some other reason? What skills do you have? What industries do you know about? Would you want to provide a service or a product? What do you like to do? How much capital do you have to risk? Will it be a full-time or a part-time venture? Your answers to these types of questions will help you narrow your focus.

Analyse the industry

Once you decide on a business that fits your goals and lifestyle, you need to evaluate your idea. Who will buy your product or service? Who would be your competitors? You also need to figure out at this stage how much money you will need to get started.

Make it legal

There are several ways to form your business – it could be a sole proprietorship, a partnership, or a corporation. Although incorporating can be expensive, it is well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you cannot be held personally liable.

You also need to get the proper business licenses and permits. Depending upon the business, there may be city, country, or state regulations as well as permits and licenses to deal with. This is also the time to check into any insurance you may need for the business and to find a good accountant.

Draft a business plan

If you will be seeking outside financing, a business plan is a necessity. But even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need to get started, what needs to get done when, and where you are headed.

Set up shop

Find a location. Negotiate leases. Buy inventory. Get the phones installed. Have stationery printed. Hire staff. Set your prices. Throw a “Grand Opening” party.

Trial and error

It will take a while to figure out what works and what does not. Follow your business plan, but be open and creative. Advertise! Don’t be afraid to make a mistake.

Above all, have a ball! Running your own business is one of the great joys in life!

By Tim Berry – founder of Palo Alto Software – Bplans.com