Entrepreneur SmartTips Guide Start Up Checklists Practical Worksheets

Bagged with Entrepreneur Magazine Not for sale separatelyIssue 07 April 2008 www.entrepreneurmag.co.za

The How-to Handbook

smarttipsseriesStart-upCheckliststools for analysing: balance sheets, ideas, costs, industry, competitors, marketing & more

10 practical worksheets

d e f i n i n g t h e b u s i n e s s m o d e l

Get a Head Start:UsE thEsE prActIcAl chEcklIsts to crEAtE clArIty ANd dIrEctIoN vAlUABlE tools to kIckstArt yoUr NEw BUsINEss INto rEAlIty.

Try These Mental Workouts:

1 Personal Balance sheet By filling out a personal balance sheet, you will be able to determine your net worth your first step to funding your business. Pg 2

2 Personal goals Worksheet Setting goals gives you an ongoing roadmap for success, but it shows you the best alternatives should you need or desire a change along the way. Pg 4

3 Business name Brainstorming The tools you need to develop a catchy name for your budding enterprise. Pg 5

4 the Best Business idea Think you have a hot business idea? Put it to the test. Pg 6

5 Business idea analysis This worksheet will help you determine how successful you will be if you enter a given business and sell a given product. Pg 8

6 industry analysis Use this checklist to help you define your position in your industry and identify possible niche

markets for your product. Pg 10

7 comPetitor analysis Worksheet A worksheet to help you define your competitors. Pg 11

8 mission statement Key questions to develop an effective mission statement. Pg 12

9 target market Worksheet It is critical to know who it is you are selling to. This worksheet will help you find out. Pg 13

10 start-uP costs Worksheet These two worksheets will help you to compute your initial cash requirements for your business. They list the things you need to consider when determining your start-up costs including one-time initial costs and ongoing costs. Pg 14

11 market Planning checklist Before you launch a marketing campaign, answer the following questions about your business and your product or service. Pg 16

i

PUBLISHING CREDITS publisher Andrew Honey managing editor Nicole Lombard copy editor Lesley Lambert art director Nikki Price Entrepreneur South Africa is published by Smart Business Solutions (Pty) Ltd. A KreditInform Group Company

The How-to Guidefor Starting & Improving a Business

www.entrepreneurmag.co.za

smart tips: start-up checklists

4 S m a R T T I P S S E R I E S W W W. e n T r e pr e n eu r M ag. co. z a S m a R T T I P S S E R I E S 5

Personal Balance SheetBy fIllINg oUt A pErsoNAl BAlANcE shEEt, yoU wIll BE ABlE to dEtErMINE yoUr NEt worth yoUr fIrst stEp to fUNdINg yoUr BUsINEss.

01liabilities detail totals

Secured Loans

Unsecured Loans

Credit Card/Charge Account Bills

Personal Debts

Current Monthly Bills

Real Estate Mortgages

Unpaid Income Tax

Other Unpaid Taxes and Interest

Other Itemised Debts

total liabilities B

Net Worth (a b = C) C

total liabilities & Net Worth D

liabilities analysis

degree of debt analysis

total liabilities B

total assets A

deGree oF debt E

If total liabilities exceed total assets, subtract assets from liabilities to determine degree of debt (B a = e)

assets analysis

assets detail totals

Cash, Cheque and Savings Accounts

Marketable Securities

Non-Marketable Securities

Real Estate/Home

Partial Interest in Real Estate

Vehicles

Personal Property

Personal Loans

Insurance Cash Values

Other

total assets A

d e f i n i n g t h e b u s i n e s s m o d e l

S m a R T T I P S S E R I E S 7

Business Name BrainstormingthE tools yoU NEEd to dEvElop A cAtchy NAME for yoUr BUddINg ENtErprIsE.


6 S m a R T T I P S S E R I E S W W W. e n T r e pr e n eu r M ag. co. z a

You should review your goals on a regular basis. Many do this daily as it helps them assess their progress and gives them the ability to make faster and more informed decisions. You will find the following questionnaire very helpful in setting and resetting your goals.personal goals worksheet

1. The most important reason for being in business for myself is:

2. What I like best about being in business for myself is:

3. Within five years I would like my business to be:

4. When I look back over the past five years of my career I feel:

5. My financial condition as of today is:

6. I feel the next thing I must do about my business is:

7. The most important part of my business is (or will be):

8. The area of my business I really excel in is:

You should review your goals on a regular basis. Many do this daily as it helps them assess their progress and gives them the ability to make faster and more informed decisions. You will find the following questionnaire very helpful in setting and resetting your goals.business name worksheet

List three ideas based on the products or services you plan to provide (e.g., childrens clothing, custom menu design, aromatherapy products):

List three ideas based on your special niche (e.g. affordable childrens special occasion clothes, exclusive designs for the small restauranteur, aromatherapy for the office environment):

List three ideas based on your special niche (e.g. affordable childrens special occasion clothes, exclusive designs for the small restauranteur, aromatherapy for the office environment):

List three ideas combining a favourite theme with your special niche: (e.g. Tea party childrens party clothes, Table for Two menu designs, The Tranquil Desk aromatic office products):

after youve decided which name you like best, ask yourself a few important questions Have you said it aloud to make sure its easily understood and pronounced? (Has it passed the test

with your family? Have you had a friend call to see how it sounds over the phone?) Have you checked your local Yellow pages to make sure the same or a similar name is not already listed? Have you checked with your local business authority to make sure the name is available? Have you started your trademark search?

sEttINg goAls gIvEs yoU AN oNgoINg roAd MAp for sUccEss.

Personal Goals Worksheet02 03

2Be certain you have a high profit margin. There are very few companies that can compete long-term on a we are cheaper marketing platform. In any new business, you need to watch your cash flow and if youre trying to work with low profit margins and make gains in volume, youll need to have a high level of working capital to keep you running through the lean profits early on. Having a higher margin is extremely important when youre growing a business so you can self-finance your growth.

3Build a strong support team a good idea isnt enough. The idea counts most, yet a quality idea must still have a great team of people behind it to give it wings. Time after time, when people bring me a business investment proposal or an idea they want to take to market, I ask them whos on their team and they respond with something crazy like: Oh, we havent hired anyone yet. Get a board of advisors. Get a team of professional accountants, coaches, lawyers and bankers. A great team will greatly improve the chances of success for any business.

Once you understand this, the question is, which industries are gold rushes right now? With an ageing population, health and leisure are growing industry seg-ments. Professional advice is at an all-time high in many fields. Or, you may want to look at my old favou-rite: staple products and services, like paper or plumbing, that you can deliver just a little better than the competition.

One last point: start with the end in mind. Look for an idea you can take national or, even better, global at some stage. It might be fun and a challenge to establish yourself locally right now, but eventually youll want to build something much bigger.


more infoi

need some inspiration? Check out our downloadable sample business plans. Log

on to www.entrepreneurmag.co.za

Quick tip: What would I choose if I were going into business today? I would start with one premise and some hot industries.

The premise is, you dont make money panning for gold, you make money selling pans. get in the way of a buying frenzy, and youll be a success.

The fastest way to make a restaurant profitable is not by having a great chef and great dcor; its by attracting a starving crowd with money.

Entrepreneur Magazine SA. All rights reserved


thINk yoU hAvE A hot BUsINEss IdEA? pUt It to thE tEst. By BrAd sUgArs

The Best Business Idea04


Thinking up a great idea is a first step; its critical that you take the time to thoroughly examine the idea thats to become your future livelihood. As most business owners eventually learn, its not the person running the business, the marketing or the employees that makes or breaks a companys success; its the quality and profitability of the idea behind the company.

When you go into business, you have to look at the idea or opportunity driving it from a different angle. Most people wrongly choose a business based on one of two personal biases:

Its a business they already know. The hairdresser opens a salon, the lawyer his or her own practice and so on. Generally, a huge mistake. Theyre thinking about the job, not the business. Just because youre a good chef doesnt mean you know how to run a restaurant. More important, it doesnt mean a restaurant would be successful in your market.

Its a product or service theyve

fallen in love with. Again, just because you love something doesnt mean a profitable business will come of it. This is especially true for first-time entrepreneurs. Learning to run a business is hard enough; you dont need to make it any harder by doing something you love rather than something customers love paying you a good profit for.

How can you be sure your idea is also something from which you can truly make a profit? There are three essential considerations:

1make sure the product or service has a repeat buy. This is by far the most important aspect of long-term business success. You have to have a product or service that people will keep buying. Its better and more profitable, in my opinion, to have a pool cleaning company than a pool building company, for example. Put another way, a business owner should focus on getting a customer once, but making a profit from that person for a very long time.

a business owner should fo-cus on get-ting a cus-tomer once, but making a profit from that person for a very long time.



Assign each business opportunity and product a column number. Answer each question along the left-hand side of the form assigning a rating of 1-3, with 3 being the strongest. Total each column after youve finished. The opportunity and product with the highest total points are your strongest candidates for success.


Business Idea analysis 05thIs workshEEt wIll hElp yoU dEtErMINE how sUccEssfUl yoU wIll BE If yoU ENtEr A gIvEN BUsINEss ANd sEll A gIvEN prodUct.

product marketability analysisproduCt

CoNCept 1produCt

CoNCept 2produCt

CoNCept 3produCt

CoNCept 4

probability of use by target market

compatibility with image desired

competitiveness of price

number and strength of marketable features

probability that product will enhance sales of current line

projected stability of demand

ability to overcome seasonal or cyclical resistance

uniqueness of product

ability of business to obtain needed equipment

Likely acceptance potential

ability of business to afford the development and production of product

ColumN totals

total sCores

busiNess op 1

busiNess op 2

busiNess op 3

busiNess op 4

relevance of your previous experience to opportunity

Familiarity with the daily operations of this type of business

compatibility of business with your investment goals

compatibility of business with your income goals

Likely profitability of business

Likelihood of business to meet your desire for personal fulfillment

projected growth for the industry

acceptability of risk level

acceptability of hours you will need to work

ColumN totals

business opportunity analysis

Competitor a Competitor b Competitor C

Where is your competitor located?

What are your competitors annual sales?

Who are the major managers and members of the board?

Is the company owned or in partnership with any other corporations?

What are the competitors strengths?

What are their weaknesses?

What is the companys product line?

How do the products compare to yours, in terms of functionality, appearance and any other criteria?

What is their price structure?

What are the companys marketing activities?

What are the companys supply sources for products?

What are the strengths and weaknesses of their sales literature?

Is the company expanding or cutting back?


Competitor analysis thIs workshEEt wIll hElp yoU dEfINE yoUr coMpEtItors.

07Competitors are companies that make products or perform services similar to yours (e.g. you deliver complete dinners, and so do they), make products or perform services that can be substituted for yours (e.g. delivery of pizza or Chinese food), and make products or perform services that are analogous to yours (e.g. ready-made deli take-aways from supermarkets). Fill in the following table about your competitors. You may need to create additional tables to have enough room for all your major competitors.



Industry analysis06UsE thIs chEcklIst to hElp yoU dEfINE yoUr posItIoN IN yoUr INdUstry ANd IdENtIfy possIBlE NIchE MArkEts for yoUr prodUct.

Are there any new competitors in the arena? Does everyone think this is a hot idea?

Have any gone out of business recently? Why?

If there have been no new entries in the market, is it because there are fatal flaws with the concept, or because you are the first with a new idea? Have you have figured out how to overcome problems others didnt solve?

Are there a small number of competitors for a large market, or a large number for a small market?

If all the other competitors are large companies, can you fit in a small but profitable niche, or do you have the capital to compete head-to-head? Are you at risk of being attacked by large, established corporations?

If there had been no recent innovation in your market, is it because the profit margins arent there to make it profitable, or because the corporations are getting lazy and staid and giving you a legitimate opportunity?

Is there room for improvement in the quality of service given to the market (for example, the Postal Service), which will give a new/small company an edge?

What is the history of your market? New markets, like microwaveable foods when microwaves were first invented, grow and change quickly. Old markets, like radio manufacturing, may be more difficult to enter. In an old market you must have a new idea, a real edge. In a new market, you need to be fast.

industry analysis checklist

now that youve answered those questions, you are ready to write your own mission statement. use the area below.

mission statement worksheet

1. Why does our company exist? Who do we serve? What is our purpose?

2. What are our strengths, weaknesses, opportunities and threats?

3. What is important to us? What do we stand for?




Target market Worksheet

target market worksheet

1. Describe your idea:

2. What will the concept be used for?

3. Where are similar concepts used and sold?

4. What places do your prospects go to for recreation?

5. Where do your prospects go for education?

6. Where do your prospects do their shopping?

7. What types of newspapers, magazines, newsletters do your prospects read?

8. What TV and radio stations do your prospects watch and listen to?

mission Statement08 09kNowINg who to sEll yoUr prodUct or sErvIcE to Is of crItIcAl IMportANcE. UsE thIs workshEEt to IdENtIfy yoUr prospEcts.

to dEvElop AN EffEctIvE MIssIoN stAtEMENt, Ask yoUrsElf thEsE thrEE qUEstIoNs:

d e f i n i n g t h e b u s i n e s s m o d e ld e f i n i n g t h e b u s i n e s s m o d e l


*Include the first three months cash needs unless otherwise noted.**Include amount required for inventory expansion.

If inventory is to be replaced from cash sales, do not include here. Assume sales will generate enough cash for replacements.


Start-up Costs Worksheet


10thE followINg two workshEEts wIll hElp yoU to coMpUtE thE INItIAl cAsh rEqUIrEMENts for yoUr BUsINEss. thEy lIst thE thINgs yoU NEEd to coNsIdEr whEN dEtErMININg yoUr stArt-Up costs ANd INclUdE Both thE oNE-tIME INItIAl costs NEEdEd to opEN yoUr doors ANd thE oNgoINg costs yoUll fAcE EAch MoNth for thE fIrst 90 dAys.

start-up expeNses amouNt desCriptioN

Advertising

Bank service fees

Credit card charges

Delivery fees

Dues and subscriptions

Health insurance Exclude amount on preceding page

Insurance Exclude amount on preceding page

Interest

Inventory**

Lease payments Exclude amount on preceding page

Loan payments Principal and interest payments

Office expenses Payroll other than owner

Payroll taxes

Professional fees

Rent Exclude amount on preceding page

Repairs and maintenance

Sales tax

Supplies

Telephone

Utilities

Your salary If applicable for first three months

Other

total oNGoiNG Costs

total start-up Costs Amount from preceding page

total Cash Needed

capital requirements ongoing monthly expenses

start-up expeNses amouNt desCriptioN

Advertising Promotion for opening the business

Starting inventory Amount of inventory required to open

Building construction Amount per contractor quote and other

Cash Amount needed for the cash register

Decorating Estimate based on quote if appropriate

Deposits Check with utility companies

Fixtures and equipment Use actual quotes

Insurance Quote from insurance agent

Lease payments Fee to be paid before opening

Licenses and permits Check with city or municipal offices

Miscellaneous All other

Professional fees Include CPA, attorney, etc.

Remodeling Use contractor quotes

Rent Fee to be paid before opening

Services Cleaning, accounting, etc.

Signs Use contractor quotes

Supplies Office, cleaning, etc. supplies

Unanticipated expenses Include an amount for the unexpected

Other

Other

Other

total startup Costs Amount of costs before opening

capital requirements one-off start-up expenses



All information featured in this booklet Entrepreneur Media Inc. All rights reserved

market Planning Checklist11BEforE yoU lAUNch A MArkEtINg cAMpAIgN, ANswEr thE followINg qUEstIoNs ABoUt yoUr BUsINEss ANd yoUr prodUct or sErvIcE.

marketing checklist

Have you analysed the market for your product or service? Do you know which features of your product or service will appeal to different market segments?

In forming your marketing message, have you described how your product or service will benefit your clients?

Have you prepared a pricing schedule? What kinds of discounts do you offer, and to whom do you offer them?

Have you prepared a sales forecast?

What type of media will you use in your marketing campaign?

Have you planned any sales promotions?

Have you planned a publicity campaign?

Do your marketing materials mention any optional accessories or added services that consumers might want to purchase?

If you offer a product, have you prepared clear operating and assembly instructions? What kind of warranty do you provide? What type of customer service or support do you offer after the sale?

Do you have product liability insurance?

Is your style of packaging likely to appeal to your target market?

If your product is one you can patent, have you done so?

How will you distribute your product?

Have you prepared job descriptions for all of the employees needed to carry out your marketing plans?

The How-to Guidefor Starting & Improving a Business

www.entrepreneurmag.co.za

Documents

Entrepreneur SmartTips Guide Start Up Checklists Practical Worksheets