Small Business

Starting a business can be an exciting venture offering many rewards. However, you must be prepared and you must understand the basics. Following the conceptual stage of starting a business, a prospective owner will move towards the actual legal formation of the business. There is much that needs to be known about forms of ownership, required licenses and business law. These free sources ought to help:

Small Business Administration
Small Business and Self-Employed One-Stop Resource
SCORE Counselors to America's Small Business
Business.gov
Small Business Lawyer, Attorney, Law, Legal Help - FindLaw for Small Business

Small Business 101 - General Philosophy

Working for Yourself

As an entrepreneur or a partner, you will be working for yourself. Time management and asset management can become an issue, but they are controllable variables. Working for yourself is rewarding and motivating. Entrepreneurs tend to work excessive hours due to their elevated levels of job satisfaction and perceived risk. Entrepreneurs can generally work whatever hours they want, work from home, and most importantly, they never have to listen to a boss.

Working from Home

The option to create a home office is attractive for a variety of reasons. First, working from home is less expensive than renting office space. Second, it is convenient and there is no commute. But there are a number of things that one must consider before deciding to pursue a home office. The most important consideration is that of the interruptions that are likely to plague your work day. If you have children, they are guaranteed to misunderstand the concept of mom or dad working from home. There are ways to avoid the distractions. The best solution is to explain to your family that you are "at work” between the hours of X and Y, and that you are not to be disturbed. If that doesn’t work, you can always consider a padlock and soundproofing.

Avoiding Interruptions

Every time a phone rings or you get up to grab a snack, you lose not only time, but your focus. Many professionals have stopped taking phone calls, and have resorted to designating a block of time to returning phone calls. The important fact to realize is that every time you are interrupted, you lose your train of thought, and it takes valuable time to regain your direction. If every unwarranted phone call wastes 5 minutes of your time, and you receive 20 phone calls a day, consider 20% of your working time wasted. If it is possible to return calls in less time, and to maintain your business’s integrity, then strongly consider this option.

Organization

Of course, keeping your work area organized will lead to higher efficiency. Although most professionals spend at least an hour a day looking for documents, they still fail to create a proper filing system, and they still fail to organize their office space efficiently. By spending 15 minutes a day organizing the workplace, one can easily save about an hour in lost time. If 15 minutes adds an hour to the day, it’s worth a try!

Types of Communication

Traditional Incoming - Having a quality product that leads to word-of-mouth recommendation; plugs from media sources such as flyers, newspaper, television, etc.
Traditional Outgoing - Telephone calls, faxes, direct mail, etc.
Internet Incoming - Primarily e-mail and links from other Web sites, including purchased advertising and banner exchanges.
Internet Outgoing - E-mail; ICQ, AIM, UseNet, etc.

What resources would help you to maximize incoming and outgoing communication channels? Create a list of what you need to succeed and post it somewhere noticeable near your computer. Ask yourself daily what it is that you've done and will be doing in order to acquire more resources.

Creating a Business Plan

The creation of a business plan is essential. A business plan helps to manage time, keep track of projects, goals, and objectives. Upon the completion of a business plan that details the projected operations of a company, one can easily weigh the importance of projects and identify the potential opportunities and threats that are associated with a particular line of business. There are a variety of formats that can be used when creating a business plan, but the active identification of industry traits, company strengths and weaknesses, as well as project operations management issues are invaluable.

How You Fit In

Vertical integration is defined as the acquisition of firms that produce, sell, or distribute products or services within your value chain. Horizontal integration consists of mergers or acquisitions with competitors within your industry. Vertical integration of online companies tends to be much more cost-intensive than horizontal integration. Due to capital expenditure restrictions, this is an impossible process for most companies. For small firms, it is more feasible to focus on horizontal integration through a niche specialization strategy and to vertically integrate with sponsor firms. Sometimes, companies vertically integrate outside of their supply chains by simply leveraging their brand names. Virgin Records and Virgin Airlines are only two of many industries through which Virgin has leveraged its brand. Integration into alternate industries limits industry-specific risk while increasing aggregate profit potential.

Cardinal Assumptions

Businesses are entities ruled by the same laws governing nature.
Businesses require resources in order to survive.
It is natural for businesses to seek resources.
Successful businesses tend to be better at acquiring resources than unsuccessful businesses.
Under-resourced businesses are less likely to succeed than those in resource-rich environments.

Outsourcing vs. In-House

Often, firms will find it more practical to outsource production of intellectual property as a means of reducing costs and saving time. The efficient allocation of resources often calls for the outsourcing of media generation in order to increase a firm’s overall productivity and to reduce opportunity costs.

Efficiency in the Workplace

In order for a business to be successful, it must be efficient. Efficient workers lead to sizable cost savings by employers and more profitable operations. Efficiency doesn’t only refer to how hard someone works, but it also refers to the efficiency of their surroundings, and how well the individual is capable of working in his environment. If efficiency can be improved simply by spending $1000 on three new computer monitors, then the investment should be made. If the extra equipment increases productivity by 5%, then it would pay for itself within a few months.

If employees must be hired, it is often a good idea to have them dress professionally at all times. Professional attire is proven to increase productivity. Although employees may not be pleased with having to dress professionally, they will soon find that it is easier to concentrate on work.