Your answers to questions like these will be the basis for the entrepreneurial, industry, market and financial analyses to come in this section and for putting together a formal business plan.

Take as long as you need to consider each question and to make notes; then, when you’re ready, move on to the next step — analyzing your business.

 

Entrepreneurial Assessment

What’s My Style?

Business owners are as different as their individual goals and management styles. Yet in order for their businesses to succeed, every entrepreneur must pay attention to the same five basic business functions. Regardless of industry, product or service, staffing needs or funding sources, all business owners must have some level of expertise in management, operations, marketing, sales and finance. Do you?

Using this handy graph take some time to assess your strengths and weaknesses as an entrepreneur. Thinking back on your work history, what personal experience in any or all of the five business functions have you gleaned from past business ownership or management positions? From working as an employee? Through college-level courses or on-the-job training programs?

If you don’t have personal experience in a particular business function, now would be a good time to tap into the expertise of someone who does. Mentally comb through your list of friends, family members, business advisors, past employers, a former colleague or college professor — in short, anyone whose counsel you’ve come to trust — to identify people you can call on to fill in your gaps in experience, then start reaching out to them.

 

Industry Analysis

What Industry Do I Represent?

Every business in the U.S., including yours, falls within a particular NAICS (North American Industry Classification System) code, a standard used by federal agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. economy. Knowing the NAICS code for your industry is useful for filing tax forms and being considered for federal contracts; it also opens the door to a wealth of information.

Before launching your business, take a hard look at the industry it represents. Look up your NAICS code online, then start looking for data like this:

The Industry Assessment template at FloridaSmallBusiness.com/TryIt will help you categorize the positives and negatives about your industry and give you food for thought about ways to take advantage of “opportunities” and counteract “threats” as you prepare to launch your business.

Market Analysis

Who’s Likely to Buy From Me?

No business exists in a vacuum; there are always market factors to consider.

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.