News & Blog

September 5, 2018

3 Start Up Areas to Discuss with your Business Advisor

If It Were Easy Anyone Could Start a Business

There are many facets involved to start up a small business.  The three most general areas that clients ask for assistance are addressed in this blog;  aimed to help you formulate an outline to discuss with your business advisor.

Creating your Business Plan

Maybe your business idea has been on the back of a napkin for some time now.  It’s time to make your ideas a reality. But first, you need a business plan. The time you spend testing your business ideas with family and friends will be well worth it.  Socializing your business idea is one thing, but letting real data and research be the driving factor will help your business to be successful. Glean ideas from the key players you’ve chosen as your management team, the board of directors, advisors, and investors.  Your key players should be selected because they will be ‘active’ in their role, assisting you along the way. No one can do it alone. You want to lean on this team of people to draw on their experience in production, marketing, and finance.

Working through your business plan with trusted advisors will also help you improve your plan.  It will be important that your business originates from your background, passion, and expertise. You will need to know the plan on all levels since you will be working it.  Be original.

When writing your business plan remember to write to your audience, be concise, and engaging.  As you write your plan, give the reader reasons to be intrigued to read further into the business plan to learn more. Acknowledge weaknesses and challenges and offer your solutions and considerations for these hurdles. Although clichés are common to most readers avoid it in your business plan.  Remember this is your original business idea.

Be sure to include and consider trends in your business area.  Show how you plan to maximize old, current, and emerging technology within your business plan.  It is also important to keep apprised of legislation and policies that affect your industry by following professional journals and publications.

Determining your Market

Do your homework!  By reading industry publications, reports and analysis, and speaking to industry experts you will be learning important issues that will help you in doing a thorough market analysis.  As you evaluate your industry look at how you stack up to direct and indirect competitors. Who are they?  What is their product offering? What are their revenues and profit margins? What are their strengths and weaknesses?  What is their market share? Learn how you can position your business in this arena.

Once you have an idea of how you can illustrate your market, then begin specific market research.  Consider the primary and secondary markets of your goods and services and the sizes of each. You will then be able to make the best marketing plan to determine where your company fits and to be the first option customers think to spend their money.

Now it’s time to define who your customer is by building customer profiles.  Learn who they are, what motivates their buying decision, what are the current products lacking, what are the alternatives, how frequently does a customer buy?  Knowing these and other factors will help you form a plan to win their business and earn a long time customer by solving their problems and easing their pain.  Look at identifying your primary and your secondary audiences… as they could be vastly different. Later when you execute your marketing, the tactics could be very different depending on your segmentation.

Financing Your Dream

It’s time to open the doors.  Initial financing is critically important.  Do you have the capital to launch your idea? Do you have any idea how long it might take to see ROI?  Commonly, first-time business owners will source funds from private equity (either their own or an investor), bank loans, or some form of a government-backed small business loan.  Talk to a seasoned CPA to establish what will work best for your plan.

As you look at repayment schedules you will need to evaluate if what you charge will be enough to pay short-term debt and long-term debt and still make money.   Establish your Breakeven Sales to determine your profitability. Knowing how much you need to sell at the best price to test changes to your expenses will help in growing your business.

Keeping a dashboard of Key Performance Indicators (KPI’s) will help you follow and manage your financial statements to make key business decisions.  Learning how to read, and interpret financial statements will be valuable in evaluating your cash flow, balance sheet and income statements.

The team at Wilke & Associates, CPAs in Pittsburgh have the privilege of being trusted business advisors to entrepreneurs.  We’ve helped our clients to launch a small business, recommend budgeting and planning strategies, and help develop their ideas into stable and strong organizations.

Are you launching a new business?  Thinking about acquiring a competitor?  Maybe you’d like to purchase an existing business?  Whatever your plans, please contact us and visit our Mergers & Acquisitions page to learn more about how we can be your business partner and advisor.

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