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Industry • Market • Financial
Market Analysis
Who’s Likely to Buy From Me?
No business exists in a vacuum; there are always market factors to consider.
• Is there a need for my product/service in the market area I’ve chosen?
• Who are the potential customers likely to need or want my product/service?
• Are there enough of these customers in my market area to support a new business aimed at filling that need?
• Can these customers afford to buy my product/service?
• Which competitors are currently offering products/services to meet this need?
• How does my product/service differ from theirs?
To answer these questions, do your homework. Look for market information online or at the library from such sources as: Small Business Development Center (SBDC) National Information Clearinghouse (www.SBDCNet.org); industry and trade associations; chambers of commerce; market research firms; media; competing and non-competing businesses with the same target market; and the U.S. Census Bureau.
Two tools for assessing your customers and your competitors are available at FloridaSmallBusiness.com/TryIt.
Financial Analysis
How Much Money Do I Need, Really?
How much money it takes to launch a business depends on the type, size and location of the business.
The task of estimating what it will cost to start and run your business sounds tougher than it is, which may be one reason many would-be entrepreneurs never get beyond the “dream it” stage. Yet estimating your initial and ongoing costs up front has real value because it helps you: (1) get a handle on the amount of any financing you may need to get your business off the ground; (2) determine a break-even point, the day when you can expect to begin making a profit; and (3) better manage your cash flow through the first crucial year and beyond.
There are two groups of figures you need to consider, and both are relatively easy to estimate using the worksheet available at FloridaSmallBusiness.com/TryIt.
Startup Costs
You’ll need to pay fees for licenses, permits and registrations, perhaps make a down payment on the purchase of office space or, if you’re renting, your first month’s rent and security deposit. Utilities (deposits and initial hook-ups), office furniture and supplies, telecommunications equipment and computers, business cards and stationery, website development and grand opening advertising are other startup costs to figure in.
Ongoing Costs
These are the costs you incur on a regular basis to keep your business running. Start with your salary and the salaries, wages and commissions you pay to employees. Then add in rent or mortgage payment, fees for professional services to an accountant or lawyer, utilities, taxes and insurance. More ongoing costs include what it will take to replenish or add inventory, supplies needed to operate your business, website hosting and advertising.
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