September 2008 - The Parklander Magazine

BUSINESS INFORMATION
Keys to Starting a New Business
By Lauren Cohen, Esq.
In today’s economy, more people than ever are interested in starting their own businesses. It may be a
desire to finally take their concept to the next level, or out of necessity due to loss of employment or other
income, and the need to protect themselves and/or to achieve financial independence through such
opportunities. The purpose of this article is to summarize various elements for entrepreneurial-minded
people to consider when embarking upon such a venture.
One of the most important elements in creating a business is that it is a
feasible business idea with a real prospect of success. You must undertake
extensive research to ensure that your idea really makes sense. Do
extensive demographics research (there are many free Internet
demographic resources available, such as freedemographics.com), to ensure
adequate numbers in terms of your target market and area. The question
to consider should therefore be along the lines of, “What is your target
market, i.e., who will buy the product/service”
If your research reveals numbers that you believe are adequate to
warrant moving forward, you should then assess and answer each of
the following questions:
• Will your business sell a product or service
• If your business involves products, decide if it will be
wholesale/retail, hands-on or web-based
• If your business involves services, will third parties be involved
• Should any licensing or similar issues be considered
• What is your competition in the
marketplace
• What are the profit prospects;
how do you go about preparing a
budget; will you need to hire
financial professionals to assist
you in this process
• What will the initial start-up costs
be
• Will you need to seek outside
capital
• How long will it likely be before
your business begins to turn a
profit What will you do during
the interim
• What type of corporate entity is
appropriate
• Will you need to seek the advice
of legal counsel
• Will you need to hire employees
to get things off of the ground
• Will your business be regional,
national or international
• What laws/regulations will be
applicable Again, you may need
legal counsel.
of “feasibility study”. If the “study” results indicate that the business seems
“sound”, and you decide to move forward, you will need to tackle various
tasks, preferably with the assistance of appropriate professionals.
A crucial step in terms of “getting the party started” is to develop a
comprehensive Business Plan, including budgets and forecasts. The
Business Plan will be a key element to your ultimate success. Without a
professional Business Plan (and Executive Summary, which will
provide a snapshot of your business much like the synopsis of a novel),
start-up business owners would be hard-pressed, at best, to secure
“angel investors” (individuals who provide capital to one or more startup
companies). Unlike a partner, the angel investor is rarely involved in
management. Angel investors can usually add value through their contacts
and expertise (source: www.fundingpost.com), and/or any type of
venture capital (the money and resources made available to start-up
firms and small businesses with exceptional growth potential). Most
venture capital money comes from this organized group of wealthy
By assessing and answering these
questions, you have undertaken a type
128 SEPTEMBER 2008