Now might seem a risky time to start a business, but there may be good reasons to do so. Prospective business owners might be among the millions who have lost jobs as a direct result of the faltering economy and see little hope of finding another job anytime soon. They might be retirees eager to supplement their incomes or people with novel ideas or products they believe can find buyers even in today’s market.
Whatever the impetus, no one starts a business to lose money or to fail.
Small Business Development Centers offer one-on-one counseling at no direct cost to the client. All centers are connected with a local community college. (The program exists in all states but actual funding differs state by state. In New Mexico, centers get most of their funding from the state Legislature and some money from the federal Small Business Administration.)
What’s the plan?
Next on the agenda is a plan that describes the business, the industry in which it fits and the products or services it intends to offer. A marketing analysis is part of every business plan: It explains where the business will be based and identifies and locates potential customers and competitors. The personnel plan describes who will manage the business and who will make up its workforce.
Financial documents, both actual and projected, are part of the business plan. They include projections of income, taxes, expenses and cash flow. The prospective owner’s financial documentation might include a resume, personal financial statement and personal tax statements for the previous three years. Supporting documents might include letters of commitment, leases and contracts.
If the business plan is part of a loan request, it needs to include a statement about how much money is needed and how it will be used. Because the bank will look at the lender’s personal credit report, the plan should explain any past credit problems.
Reality check, please
Writing a business plan forces a prospective entrepreneur to translate fantasies into something realistic and tangible — something that others can imagine, critique and improve upon.
Those serious about starting a business but uncertain of what it involves are encouraged to visit the nearest New Mexico Small Business Development Center. A list of locations is available at the lead center at Santa Fe Community College 1800-281-7232 or on the network’s Web site .