The Journey - Creation Of The Specific Chiropractic Center - Kauai
First Step - Self Assessment
- Why create this business?
- What is the purpose of this business?
- Why is it important to you?
- What is the vision of this business?
- How will the business fit within the community that it serves?
CHECKLIST FOR GOING INTO BUSINESS
The Checklist for Going into Business is a guide to help you prepare a comprehensive business plan and determine if your idea is feasible, to identify questions and problems you will face in converting your idea into reality and to prepare for starting your business.
Operating a successful small business will depend on
• a practical plan with a solid foundation,
• dedication and willingness to sacrifice to reach your goal,
• technical skills, and
• basic knowledge of management, finance, record keeping and market analysis.
As a new owner, you will need to master these skills and techniques if your business is to be successful.
IDENTIFY YOUR REASONS
As a first and often overlooked step, ask yourself why you want to own your own business. Check the reasons that apply to you.
1. Freedom from the 9-5 daily work routine.
2. Being your own boss.
3. Doing what you want when you want to do it.
4. Improving your standard of living.
5. Boredom with your present job.
6. Having a product or service for which you feel there is a demand.
Some reasons are better than others, none are wrong; however, be aware that there are tradeoffs. For example, you can escape the 9-5 daily routine, but you may replace it with a 6 a.m. to 8 p.m. routine.
Going into business requires certain personal characteristics. This portion of the checklist deals with you, the individual. These questions require serious thought. Try to be objective. Remember, it is your future that is at stake!
1. Are you a leader?
2. Do you like to make your own decisions?
3. Do others turn to you for help in making decisions?
4. Do you enjoy competition?
5. Do you have will power and self discipline?
6. Do you plan ahead?
7. Do you like people?
8. Do you get along well with others?
This next group of questions though brief is vitally important to the success of your plan. It covers the physical emotional and financial strains you will encounter in starting a new business.
1. Are you aware that running your own business may require working 12-16 hours a day, six days a week and maybe even Sundays and holidays?
2. Do you have the physical stamina to handle the workload and schedule?
3. Do you have the emotional strength to withstand the strain?
4. Are you prepared if needed to temporarily lower your standard of living until your business is firmly established?
5. Is your family prepared to go along with the strains they too must bear?
6. Are you prepared to lose your savings?
PERSONAL SKILLS AND EXPERIENCE
Certain skills and experience are critical to the success of a business. Since it is unlikely that you possess all the skills and experience needed you'll need to hire personnel to supply those you lack. There are some basic and special skills you will need for your particular business.
By answering the following questions you can identify the skills you possess and those you lack (your strengths and weaknesses).
1. Do you know what basic skills you will need in order to have a successful business?
2. Do you possess those skills?
3. When hiring personnel will you be able to determine if the applicants' skills meet the requirements for the positions you are filling?
4. Have you ever worked in a managerial or supervisory capacity?
5. Have you ever worked in a business similar to the one you want to start?
6. Have you had any business training in school?
7. If you discover you don't have the basic skills needed for your business will you be willing to delay your plans until you’ve acquired the necessary skills?
Second Step - Research
- Viability of business type
- Qualifications - Education, Licensing
FINDING A NICHE
Small businesses range in size from a manufacturer with many employees and millions of dollars in equipment to the lone window washer with a bucket and a sponge. Obviously the knowledge and skills required for these two extremes are far apart but for success they have one thing in common: each has found a business niche and is filling it.
The most critical problems you will face in your early planning will be to find your niche and determine the feasibility of your idea. Get into the right business at the right time is very good advice but following that advice may be difficult. Many entrepreneurs plunge into a business venture so blinded by the dream that they fail to thoroughly evaluate its potential.
Before you invest time effort and money the following exercise will help you separate sound ideas from those bearing a high potential for failure.
IS YOUR IDEA FEASIBLE?
1. Identify and briefly describe the business you plan to start.
2. Identify the product or service you plan to sell.
3. Does your product or service satisfy an unfilled need?
4. Will your product or service serve an existing market in which demand exceeds supply?
5. Will your product or service be competitive based on its quality, selection, price or location?
Answering yes to any of these questions means you are on the right track; a negative answer means the road ahead could be rough.
For a small business to be successful the owner must know the market. To learn the market you must analyze it, a process that takes time and effort. You don't have to be a trained statistician to analyze the marketplace nor does the analysis have to be costly.
Analyzing the market is a way to gather facts about potential customers and to determine the demand for your product or service.
The more information you gather the greater your chances of capturing a segment of the market. Know the market before investing your time and money in any business venture.
These questions will help you collect the information necessary to analyze your market and determine if your product or service will sell.
1. Do you know who your customers will be?
2. Do you understand their needs and desires?
3. Do you know where they live?
4. Will you be offering the kind of products or services that they will buy?
5. Will your prices be competitive in quality and value?
6. Will your promotional program be effective?
7. Do you understand how your business compares with your competitors?
8. Will your business be conveniently located for the people you plan to serve?
9. Will there be adequate parking facilities for the people you plan to serve?
This brief exercise will give you a good idea of the kind of market planning you need to do. An answer of no indicates a weakness in your plan so do your research until you can answer each question with a yes.
Third Step - Develop A Plan
- Executive Summary
- Organizational Plan
- Strategic Plan
- Marketing Plan
- Cost Analysis
- Practice analysis
Your Business Plan is probably one of the most important documents you will need to set your business up for operation. There are many forms that a Business Plan can take, but each plan contains the same basic information. Is your plan to be used to secure a loan, invite new investors, to operate your business, etc? As you can see, there are many purposes of a Business Plan. In this booklet we will provide the format for a basic Business Plan.
A Business Plan will help you assess your personal suitability as an entrepreneur. It will test your commitment to your business idea and ask you to research and collect data that will allow you to move from a good hunch that your business idea will work to a solid plan that will increase the odds of success. The Business Plan will also help you determine the market for, and economic feasibility of your product or service. You will need to determine the most advantageous form for your business as you create this plan. It will also demand that you calculate the financial requirements for this business idea. And, it will also request that you research the permits needed, insurance coverage and other pertinent business matters that may make the difference between success and failure.
There are eight primary sections to a Business Plan. They are:
• Executive Summary
• Description of the Business
• Business Principals and the legal form of the Business
• Your Market
• Your Sales Program
• Business Location
• Internal Operations
• Your Financial Plan
The EXECUTIVE SUMMARY is a brief summary of the business plan purposes and objectives. It answers questions such as:
• What is the purpose of this Business Plan?
• What structure have you chosen (sale proprietorship, partnership, corporation)?
• Who are the principals?
• Why do you think the venture will be successful?
• If this is to be used for a loan, who is requesting the funds and how much is needed?
DESCRIPTION OF THE BUSINESS answers the following questions:
• What business are you in?
• What is the name of the business?
• Who are the business owners?
• When will the business open?
• What does the business hope to achieve?
• Where is the business located?
BUSINESS PRINCIPALS AND THE LEGAL FORM OF BUSINESS create the foundation of what legal format the business will take and who are the key people involved in the business. It answers questions such as:
• Who are the principal owners of the business?
• What are their educational and business backgrounds?
• What background do they have in the business?
• Are there any other key employees?
• How do you think the skills of the business owners will contribute to the success of the business?
The legal form that a business will take, that is, will it be a sole proprietorship, partnership, corporation or sub-s corporation, are critical questions that will effect ownership, business registration, management, liability and taxation issues. A description of each form of business appears on the following page. You should consult an attorney for the business form that best matches your needs.
YOUR MARKET answers the question "Who is my market?" The following questions will help define this section of your Business Plan:
• How big is your market?
• Is your industry growing? If so, by how much?
• What are the major trends in the industry?
• Who is your customer?
• What are the strengths of your competition?
• How will you counter your competition's strengths?
• How will you price your product or service?
• What advantages do you bring to the marketplace?
Your SALES PROGRAM lays the foundation to how you will sell your product or service. Answers to the following questions will assist you in developing your sales program.
• How will your business be superior to your competitors?
• How do you intend to capture your target market?
• How will you advertise and promote your products or services?
• How do you think your competition will respond to your advertising/promotion?
• What challenges do you think you will face in marketing and promoting your product or service?
• What are your market strategies?
A short section describing your BUSINESS LOCATION will answer the following questions directly:
• Describe your business location, including parking facilities?
• How is your location an advantage in selling to your target market?
• What special equipment will you need?
• What renovations will you need?
INTERNAL OPERATIONS must be addressed in your Business Plan. The following questions must be answered by you, as well as placing the answers in your Business Plan.
• Who is responsible for each part of your operation?
• Who will be responsible for starting up your business?
• Do you have a back-up plan in case a key employee leaves?
• Who are your suppliers?
• How much space will you lease/build?
• Include resumes of key employees/owners?
• How will you train employees?
Fourth Step - Business Backbone
PLANNING YOUR START-UP
So far this checklist has helped you identify questions and problems you will face converting your idea into reality and determining if your idea is feasible. Through self-analysis you have learned of your personal qualifications and deficiencies and through market analysis you have learned if there is a demand for your product or service.
The following questions are grouped according to function. They are designed to help you prepare for "Opening Day."
Name and Legal Structure
1. Have you chosen a name for your business? Yes____ No____
2. Have you chosen to operate as sole proprietorship, partnership or corporation? Yes____ No____
Your Business and the Law
A person in business is not expected to be a lawyer but each business owner should have a basic knowledge of laws affecting the business. Here are some of the legal matters you should be acquainted with:
1. Do you know which licenses and permits you may need to operate your business? Yes____ No____
2. Do you know the business laws you will have to obey? Yes____ No____
3. Do you have a lawyer who can advise you and help you with legal papers? Yes____ No____
4. Are you aware of
• Occupational Safety and Health Administration (OSHA) requirements? Yes____ No____
• Regulations covering hazardous material? Yes____ No____
• Local ordinances covering signs, etc.? Yes____ No____
• Federal Tax Code provisions pertaining to small business? Yes____ No____
• Federal regulations on withholding taxes and Social Security? Yes____ No____
State Workmen's Compensation laws? Yes____ No____
Protecting Your Business
It is becoming increasingly important that attention be given to security and insurance protection for your business. There are several areas that should be covered. Have you examined the following categories of risk protection?
• Accident liability
Discuss the types of coverage you will need and make a careful comparison of the rates and coverage with several insurance agents before making a final decision.
1. Are you prepared to maintain complete records of sales income and expenses, accounts payable and receivables? Yes____ No____
2. Have you determined how to handle payroll records, tax reports and payments? Yes____ No____
3. Do you know what financial reports should be prepared and how to prepare them? Yes____ No____
CHOOSING THE RIGHT BUSINESS STRUCTURE
There are many forms of legal structure you may choose for your business. A specific business structure is generally chosen for liability and/or tax issues. It is recommended you research each legal structure thoroughly and consult a tax accountant and/or attorney prior to making your decision.
A business owned and managed by a single individual is a sole proprietorship.
A partnership exists when two or more persons join together in the operation and management of a business venture. A formal partnership agreement is recommended in order to address potential conflicts before they arise.
A partnership compromised of one or more general partners who manage the business and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but who take no part in running business and incur no liability with respect to partnership obligations beyond contribution.
A “C” corporation is a legal entity made up of persons who have received a charter legally recognizing the corporation as a separate entity having its own rights, privileges and liabilities, apart from those of the individuals forming the corporation.
Subchapter “S” Corporation
A special section of the Internal Revenue Code permits a corporation to be taxed as a partnership or sole proprietorship, with the profits taxed at the individual rather than the corporate rate. IRS publication 589
Limited Liability Companies & Partnerships –(“LLCs” and “LLPs”)
An LLC combines selected corporate and partnership characteristics while still maintaining status as a legal entity distinct from its owners. The Limited Liability Partnership (LLP) is similar to the LLC with the exception this it is aimed at professional organizations.
An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online: www.irs.gov/businesses/index.html
Taxpayers can also call a toll-free number, (800) 829-4933, to get an EIN.
For further information, contact:
Internal Revenue Service, U.S. Department of Treasury
300 Ala Moana Blvd. #1002, Honolulu, HI 96813
Tel: (866) 816-2065, Fax: (215) 516-3990
Contact your insurance agent or broker. It is prudent for any business to purchase a number of basic types of insurance. Law requires some types of coverage, others simply make good business sense.
The types of insurance listed below are among the most commonly used and are merely a starting point for evaluating the needs of your business.
General Liability Insurance – One of the most common types of liability is product liability, which may be incurred when a customer suffers harm when using the business’ product.
Property – It is important to determine the property you need to insure for the continuation of your business and the level of insurance you need to replace or rebuild.
Business Interruption – This insurance can provide sufficient funds to pay your fixed expenses during a period of time when your business is not operational.
Key Man – If you are so critical to the operation of your business that it cannot continue in the event of your illness or death, you should consider this type of insurance.
Automobile – You may need special insurance (called “non-owned automobile coverage”) if you use your personal vehicle on company business.
Officer and Director - Officers and directors of a corporation may become personally liable for their actions on behalf of the company.
Home Office – It’s a good idea to update your homeowners’ insurance policy to include coverage for office equipment.
Business Premises and Location
1. Have you found a suitable building in a location convenient for your customers? Yes____ No____
2. Can the building be modified for your needs at a reasonable cost? Yes____ No____
3. Have you considered renting or leasing with an option to buy? Yes____ No____
4. Will you have a lawyer check the zoning regulations and lease? Yes____ No____
Fifth Step - Survey Community and Financial Plan
Survey Community - www.addisonbulosan.com/kauaisurvey
Get Financial Backing | Develop Startup Capital
The FINANCIAL PLAN will become the backbone of your Business Plan. If you are seeking outside financing your financial plan will be critical to you receiving funding. If you are planning on funding your business through your own financial resources the financial plan will become your major operating tool. Either way the importance of your financial plan cannot be overestimated. Your financial plan will also be your reality check between what you can expect to earn in your business and what it will take to operate. If you ignore your financial plan you will do so at your business' peril.
Generally, your financial plan should include two years of Profit and Loss projections, Balance Sheet projections and Cash Flow projections. It is not practical to give you a detailed description of each type of financial statement. However, the following questions will help you gather the data necessary to put these financial statements together.
Questions related to your PROFIT AND LOSS STATEMENT:
• What are your projected sales, by month, by unit, by year, by product line or service?
• What are the costs for your inventory/merchandise?
• What are your projected expenses? Items such as insurance, shipping, taxes, salaries & wages, benefits, utilities, telephone, repairs, legal and professional, computer, license and permit fees, etc.
• Will there be other income, such as t-shirt sales?
• Other expenses? Advertising?
Questions related to the BALANCE SHEET are:
• What will be your start-up cash balance?
• Will you have any accounts receivables?
• What equipment will you need to buy?
• How much will you owe your suppliers? Investors? Bankers?
• Will you have debt? If so, how much and for how long?
• Will you sell stock in your organization? If so, how much?
The CASH FLOW statement is designed to tell you how much cash you will need to have on hand to pay bills and generally keep your operation running smoothly. Questions such as these will give you a good beginning at looking at cash flow.
• How much cash will you start with?
• Projected Income?
• Credit Sales?
• Loan repayment?
Network | Educate
Sixth Step - Buildout and Marketing
Buildout - www.addisonbulosan.com/buildout-plan
Pre-Sale - www.addisonbulosan.com/invest-kauai
Network | Educate
Build and Setup Marketing - www.addisonbulosan.com/marketingplan
Seventh Step - Systems Setup
Office Setup - www.addisonbulosan.com/office-layout
Market and Advertise - www.addisonbulosan.com/marketingplan
Eighth Step - Open
Open - www.addisonbulosan.com/grand-opening
Implement Marketing Strategies