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** Feature Article: Becoming an Entrepreneur - Toolkit for Your Start-Up Home Business
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Hello Fellow Entrepreneur!

Thank you for being a part of our community! We wouldn't be here without you :). This week's issue of your favorite ezine has arrived! In this issue, we are going to talk about Starting a home business.

So, grab yourself a coffee... sit down in your favorite chair... and read on. This issue of The 24KaratMarketer Ezine will become your blueprint to starting your own profitable home business!

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  • ** FEATURE ARTICLE ~

    Becoming an Entrepreneur - Toolkit for Your Start-Up Home Business

    By Michael Wayne

    This Toolkit for your Start-up Home Business outlines all the basic guidelines you will need to get your home business up and running. The goal is to ensure that you have all the relevant information and a structured approach in getting your business off the ground as soon as possible.

    Step #1 - Determine what type of business you want to get into.

    Business ideas and suggestions may come from many sources. You may have some ideas of your own based on your passion or you may recognize that there is a need based of discussions you have with others. A case in point, I recall when my children were younger we needed transport to pick them up from school (there was no school bus service). After discussing with a friend, he assisted us with picking up the children, and soon realized that there was a demand for such a service. There and then his new business was born.

    Step #2 - Research the business idea

    In the school transportation service example given above, my friend conducted an informal survey by speaking with other parents, he was quickly able to determine the demand for such a service and the potential revenue to be generated. Depending on your business idea you may be required to do a combination of both informal and formal research, but the goal is to gather as much information as possible that will help you to make an informed decision on the business idea.

    You may have several business ideas in your head and would have to make a choice on which one to implement. In making your choices consider the following:

    • The size of the market - in terms of customers, revenue and growth potential

    • Competitiveness of the market -how many businesses are already operating in that space?

    • Who is your target audience? If a market is very competitive, as a new entrant, you may want to probably look to see if there is a particular niche that has needs that are not being met by the existing suppliers and get into it.

    • What are customers looking for? (demand)

    • Where are the customers located?

    • How do you plan to reach them and serve them? (Your marketing strategy). More on this will be discussed in a subsequent article.

    • If you are not producing your own product or service, who will be you supplier? I will suggest that you identify at least three suppliers to give yourself more room to negotiate and get the best deals.

    • If you plan to import or export then you would have to enquire about licences with the relevant authorities within your jurisdiction.

    Tip - Focus on the business idea that you are most passionate about. Because when things get challenging, it is your passionate that will give you the strength to stay in the business.

    Step #3 - Decide on your Business Structure

    Since the focus of this article is on home based businesses, the assumption is that your business structure will be one of either a sole proprietorship or a partnership. Notwithstanding that, I will still provide a brief description of the three typical business structures for setting up and registering a business.

    • Sole proprietor- this a business where there is a single owner. It is sometimes referred as a "one-man" business. You are the business and the business is you. As the owner of this type of business you have the responsibility for making all decisions. You receive all the profits and accept all losses.

    • Partnership - this is an association between two or more persons who joint themselves together to form a business. You can partner with relatives or friends or whoever. You and your partners contribute to the business equally and share equally in the profits and losses. A limited partnership may have some different arrangements in terms of contributions and profits and losses.

    • Corporation - a business structure, where the business has a legal identity that is separate and distinct from its owners. The owners of a corporation are referred to as shareholders. In some countries a corporation can be started by a single person. A key distinction between a corporation and the other types of business structures is that the owners (shareholders) have limited liability, in that they are not personally liable for the debts of the corporation. They share in the profit of the company through the receipt of dividends and stock appreciation.

    Step #4 - Register your Business

    Having decided on your business structure you will need to register your business name with the relevant authorities in your country. If you are a sole proprietor and you are using your name as the business name you do not have to register yourself, since you and the business are one. However, apart from that all business names must be registered.

    When you have a name in mind, you will be required to do a search of the data base of registered companies to ascertain that the name is not being used by anyone or company. Once your chosen name is available then you can go ahead and register it with the relevant government authority.

    Step #5 - Calculate your start-up cost

    The guidelines used here are focused on a home based business that may not have some of the typical expenses of a business operated outside the home. Calculating your start-up cost will certainly assist you in deciding how you will finance your business.

    1. Start-up expenses- examples- business cards, flyers, promotional expenses etc.

    2. Assets to be purchased- examples could include- desk, chair, filing cabinet, computer, software licences, printer, inventory etc.

    3. Ongoing monthly expenses- example website hosting fees, other online fees and charges, subscription services fees, business telephone, advertising expenses, distribution cost etc.

    Tip - multiply the monthly expenses by six (6 months), since it may take approximately six months to breakeven or realize a profit.

    1. Add the figures in 1+2+3 to get your total start-up cost

    Step #6 - Forecast your Revenue

    To calculate your breakeven revenue - divide your ongoing monthly expenses by the number of business days to get your daily revenue. Anything in access of that is your profit.

    Step #7 - Prepare your Business Plan

    It is good to prepare your business plan before seeking financing, even if you are self-financing. Your business plan is your road map showing your business vision and how you will get there. The key elements you want to cover in your business plan are as follows:

    • Business Concept- Description, vision and mission, goals and objectives

    • Operations and Management- Owner background, location, staffing, inventory, suppliers, delivery and distribution etc.

    • Marketing - products and services, customers, competition, pricing, promotion and advertising etc.

    • Financing- assumptions, operating expenses, asset requirements, operating expenses, sales and revenue forecast etc.

    Step #8 - Get Financing for your Business

    Just to re-state the focus here is on the sole proprietorship and partnership business structures. Depending on your business structure and the size of your business, there are many ways that you can secure financing:

    • Personal Savings- you may have adequate personal savings set aside to start your business. In a partnership, partners would contribute to the financing of the business based on the partnership agreement.

    • Line of Credit- you may have a decent line of credit from you bank which you can use to finance your business.

    • Credit Card- depending on your credit limit, your credit card could be a good source of short term financing. The interest rate on this could be very high.

    • Borrowing from friends- to supplement your personal savings you may borrow from relatives or friends

    • Institutional Borrowing- you may approach a financial institution (bank or credit union) for business financing, and this is where your business plan will come in handy. Your financial institution would only lend you money based on a solid business plan.

    The above are the basic tools required to get your home business started. Have fun utilizing you toolkit and best of luck with your business venture.

    Additional note for those who are getting into Import and Export

    Get familiar with these shipping terminologies

    • Free on Board (FOB) - The quote reflects the cost of the goods plus the cost of loading them on the ship or plane. The supplier handles all customs export formalities at the loading port. No insurance or freight is included.

    • Free Along Ship (FAS) - The seller is responsible for delivering the goods alongside the vessel at the agreed port of shipment. It is the buyer's obligation to clear the goods for export and must also absorb all costs and risks of loss or damage from that point on.

    • Cost and Freight (C&F or CFR) - The price quoted include the cost of the goods and the cost of the ocean freight to transport the goods to the agreed port.

    • Carriage Paid To (CPT) - Seller absorbs cost of freight for the carriage of the goods to the destination. The seller clears the goods for export.

    • Cost Insurance and Freight (CIF) - The seller pays for the insurance coverage of the goods up to the time they reach the designated port of entry.

    • Delivered Duty Unpaid (DDU) - The seller is obligated to deliver goods to the named place in the country of import. The seller absorbs costs involved with bringing the goods to that point (excluding duties, taxes and other charges)

    • Delivered Duty Paid (DDP) - The sell absorbs all the DDU costs in addition to the duties, taxes and other charges of delivering the goods to the destination.

    ABOUT THE AUTHOR

    If you are a stage where you want to create a life and business you love, please click this link http://tidyurl.com/fp9sjq for our free Lifestyle Video Training Series Now.

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    Article Source: http://EzineArticles.com/expert/Michael_Wayne/2306074

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