7 Decisions For Business Success
 By Terry M. Blair

Think of starting a business as one big lesson in decision making.

It seems the decisions you must make never end. But some decisions are more important than others because they weigh so heavily on your ultimate success.

Here are seven decisions you should contemplate long and hard before moving ahead with your small business.

1. What legal structure will you use?
Your choices are pre-defined:

• Sole proprietor

• Partnership

• Corporation

• Limited liability company (LLC)

Each of these legal entities offers tax advantages and disadvantages, depending upon your type of business. Each offers different levels of personal liability and asset protection.

To decide which structure will best serve your interests, you need to talk to a professional. Talk to a tax advisor. You may also need to consult an attorney.

If you decide that incorporating is right for your small business, AFS can help. Members have access to BizFilings, which can help you incorporate or form an LLC in any state. Plus, AFS Members enjoy significant savings on all formation services from BizFilings.

2. Who are your primary customers?
You need to be specific when making this decision, because it will drive many other business decisions. Create a profile for your target customers.

Will your primary customers be individuals or other businesses? Will your target market be consumers who live close to your business? How much money do your primary customers make and how do they spend it? What organizations do those customers join?

3. How will you market your business?
You can only make this decision after you decide upon your target market.

For instance, if your customers are individual consumers who live near your business, then flyers and direct mail campaigns might be appropriate. If your target market is Fortune 500 companies, then you may need to plan for attending conferences, trade shows and other gatherings where you can meet the decision makers.

4. How many employees do you need?
Your type of business dictates this decision.

A sole proprietor working as a consultant may need no employees. A startup retail business might need several workers.

But look ahead one or two years. If you’re planning for fast growth, your need for employees might grow, too.

5. How much money do you need?
There’s no easy way to make this decision. You’ve got to crunch the numbers.

Start with a budget that includes every expense you can think of. Here’s a short list:

• Marketing

• Employee payroll and benefits

• Office supplies and equipment

• Overhead

• Taxes

• Insurance

Next, add budget items specific to your business. For example, if you operate a janitorial service, you’ll have the additional expenses of cleaning supplies.

When budgeting, remember to account for the anticipated growth of your business. If you expect to add two clients a month to your janitorial firm, then your expenses for supplies (and maybe employees) will increase.

6. How will your finance your business?
Many businesses start small and grow. Business owners use profits to pay for that growth. It’s known as bootstrapping. And many entrepreneurs have used that method to successfully build their businesses.

Other businesses need an infusion of cash to pay for expensive equipment, to launch a national marketing campaign, or to pay for goods necessary for manufacturing a product.

Here are some ways you could finance your business:

• Personal savings

• Investors (including friends and family)

• Credit cards

• Traditional bank loan

• Small-business loan through the U.S. Small Business Administration

• Some combination of those sources

7. Where will you find suppliers?
Many small-business startups ignore this decision. That’s a mistake.

Someday you’ll need equipment. Or you’ll need to outsource some of your work. Or you’ll need help with taxes and accounting.

The people you choose to do business with impact your success. So decide now where you can go to get what you need.

If you manufacture products, familiarize yourself with trade publications and online Web sites that can put you in touch will industrial suppliers.

If you’re starting a graphic design firm, learn where you can turn for freelance help if you get overwhelmed with projects.

If you’re weak on administrative details, study up on payroll service firms and bookkeeping assistance.

(Posted February 2007)

>>Back to Startup Success