HOW TO

START UP…

AND REMAIN
IN BUSINESS.
A SIMPLE PROCESS.
AKINO A. DAVIS.
HOW TO START UP…AND REMAIN IN BUSINESS.

HOW TO
START UP…

AND REMAIN
IN BUSINESS.
A SIMPLE PROCESS.
AKINO A. DAVIS.

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 HOW TO START UP…AND REMAIN IN BUSINESS.

HOW TO START UP…AND REMAIN IN

BUSINESS.
A SIMPLE PROCESS.

First Edition Print Copyright © December 2008

By Akino A. Davis.

All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system or transmitted
in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without the
prior written permission of the publisher.

Published By:
Kingdom Coaching Company.
Address: #19 Arcadia Avenue, Paradise East,
Tacarigua, Trinidad, W.I.
Telephone: 1-868-337-5886
Email: sme.chiefconsultant@gmail.com
Website: www.kingdomcoach.webs.com /
www.smedirect.webs.com

Cover Design by: Akino A. Davis.

Printed in The Republic of Trinidad & Tobago

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 HOW TO START UP…AND REMAIN IN BUSINESS.
TABLE OF CONTENTS.

Dedication page 05

Introduction page 06

How to Use this Manual page 08

SECTION ONE:
How to Start a Business.

Chapter 1 page 10
Developing Your Ideas

Chapter 2 page 14
Selecting Your Business Entry Level
(Part time or Full time)

Chapter 3 page 16
Making the Business Legal

Chapter 4 page 20
Writing a Successful Business Plan

Chapter 5 page 25
Getting Start Up Capital

Chapter 6 page 30
Establishing Financial Controls

Chapter 7 page 33
Considerations at Start Up

Concluding Section One page 45

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Dedication

This book is dedicated to all the young and not so

young individuals with an internal and overwhelming
desire to seek out and obtain self liberation and
financial well being via small business ownership and
commerce.

I especially dedicate this book to my Mother, Gloria

Wilson-Thomas for laying the foundation as an
Entrepreneur and for giving me a business education
that could never be taught or learnt in any school. May
God Bless Her Soul, see you in Heaven.

Furthermore, I dedicate this book to all my other

family, friends and onlookers, who have endured my
perseverance and ambition to become a successful
businessman and example to them.

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Introduction

As a young boy growing up, I have always been

exposed to entrepreneurship and small business start
ups, operations and development. My mother, for as
long as I could remember was always self employed.
There was only one time in my mid teens where she
took employment but still maintained a successful
business. In the 1980’s my mother started as a “street
vendor”, meaning she had no fixed place of operation
except for the streets of San Juan a budding town in
east Trinidad.

Eventually as she became more successful as a

merchant she relocated to the capital city of Port of
Spain and this is where my real education as an
entrepreneur started.

On my mother’s instruction and guidance, my primary

and secondary school years were spent pedaling goods
and other items throughout the city. I would sell from
lemon to lipstick, even belting out sales slogans in my
sleep at nights. Soon enough though we were able to
set up a permanent building structure in our village,
were we sold small food items, snacks and drinks.

In 2003, mom moved back to St. Vincent the country

of her birth after spending twenty seven years in
Trinidad and Tobago. In St. Vincent and before her
death in June 2010, she successfully operated a
successful fast food café and variety store.

It is this training as a boy and teenager together with

my own experiences as an employee and successful
businessman and the formal education received along
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the way that I set out to present this book: HOW TO

START UP… AND REMAIN IN BUSINESS as
an applied and proven guide for starting and remaining
in business.

In my endeavors as an entrepreneur, these guides have

allowed me to start and operate several businesses in
Trinidad and Tobago, even the company which
publishes this book.

In this book I don’t attempt to re-invent anyone else’s

principles but only to compile steps and strategies as
they have been useful to me, as I am sure they will
prove useful to you also. Read on then if you are ready
to learn HOW TO START UP… AND REMAIN
IN BUSINESS, A Simple Process.

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How to Use This Manual

This Manual is a guide for aspiring entrepreneurs and

future business owners on the ABCs of starting up and
successfully managing their ventures. This manual is
not a fool proof guide and no claims of guarantee are
suggested herein. It is my belief that the success of a
small business or any business is dependent upon the
management and vision of the business owner and the
team operating the business.

I hope that as you read this book, the information will

inform you accordingly and that you make the
decisions that is right for your business to start and
remain a success in the marketplace.

Wishing you all the best of success!

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SECTION ONE

HOW TO START
A BUSINESS

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Chapter 1
Developing Your Ideas

Every new business starts with an idea. Ideas can be

unique to the one who possess it but many a business
has been started from the modification of existing
business ideas. Your idea is the most important seed
for your business and one must seek out to guard your
idea and protect it.

A business idea, though birthed in your mind and heart,

can be easily stolen, copied or modified. Having a
business idea does not give you ownership of a
business but it is only when this idea is developed and
your business started can you give claim to the
business.

The development of your business idea is an essential

step. Having a unique idea does not guarantee that your
business will be successful. The idea is merely a seed
and you need to nurture it to a stage where it can
morph into a successful business. Developing a
successful business idea will involve the following
steps:

• Journaling your Idea

• Conducting Idea Studies
• Crunching Start up Numbers

Journaling Your Idea: Your memory grows more

fragile with age, so it is advisable that you write down
your ideas. Keep a journal or writing pad handy. There
are times when I go through phases of “idea storms”

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and it usually serves me well to keep a writing pad and

pen close by at all times; even at my bedside in the
night. If you are as excited an entrepreneur as I am, you
will not remember ever idea that comes to mind, so
journaling is important.

Most ideas that come through your mind may not stick
and keeping a journal of your ideas will serve as a sort
of filing of your ideas. As an entrepreneur you too will
realize that memory space is important to you and the
less stuff you have in your mind will serve to increase
your thinking capacity. This leads us to step two.

Conducting Idea Studies: After recording your

unique or existing idea, you can now review each your
idea(s) more carefully. This is what I call the idea
elimination stage. Here you can engage in a bit more
research on your idea industry to see if indeed there is a
place for your idea in the business market place.

Not all unique ideas find a place in the market, even it

appears to be a “messiah idea” that is, an idea that you
know will solve a problem. For example, in 2007 I
came across an idea that was highly popular in Europe
and North America for generations before. It is the
conversion of shipping containers into affordable
housing and other building uses.

In my research I discovered that the technology was

very easy to apply to my local industry and that indeed
I had found the “Messiah Idea.” I drew up exquisite
floor plans, did a sound business plan and invited
associates to invest in the idea.

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When we launched the “C.U.T.E – Container Units To

Enjoy” in August 2008, the idea and designs generated
huge fanfare and interest. Unfortunately to this day
(September 2010) we have not been able to secure a
sale for our units. What was our problem? Well we had
a “Messiah Idea” but nobody wanted to be saved. We
underestimated the culture of our local citizens.

Our target market then did not appreciate the idea of

dwelling in a “steel box” even though it looked better
than and cost cheaper than a traditionally built house or
building. I failed then to study our unique idea carefully
and to take into account the culture of the homebuyer.

What resulted was me becoming indebted to several

investors and I didn’t even make money from the idea.
You can save yourself time, effort, energy, money and
some shame if you carefully study your business ideas.
Determine firstly if your idea is wanted by your target
customers. If it isn’t at that point in time, create a file,
store it away and move onto the studying the next idea.

Notice I advised you to store away your ideas if they

are not feasible when you did your initial study. Storing
ideas is important because after time when markets,
environments and cultural acceptance change, these
ideas can be resurrected and developed into successful
businesses.

Anyway, after two years, we were able to resurrect our

“Container Housing” idea. As it turns out now the market
for rental housing is huge and we were able to adapt
our designs to the housing rental market. Let’s just say
we were fortunate not to discard the idea file.

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Crunching Start Up Numbers.

So you’ve journal and studied the ideas. The next step

is to crunch the start up numbers. A simple idea can
cost much to implement but this can be structured into
smaller segments if you crunch the numbers for start
up. One has to remember that each business must start
with small steps and though you may possess a large
vision, the business must start somewhere.

Starting small and growing gradually is an almost sure

path to success. By crunching the numbers, you can
determine what it will cost to get you started on this
path and will instruct you in your way in further
developing your idea(s) into a business you will enjoy
doing.

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Chapter 2
Selecting Your Business Entry Level

After doing the feasibility study to determine the

viability of converting your business idea into a
successful business, your next step is to determine what
level of entry you will pursue in the establishment and
operation of the business. Ideally there are two levels of
business entry levels to be considered when deciding
on this matter, they are:

1. Part Time Entry and

2. Full Time Entry.

Part Time Entry.

There are several factors which determine whether it is

better suited for small businesses to be started as part
time businesses. These factors include the level of
income generated, the need or not for employees, and
the operator confidence. Where it is established that
the business will not satisfy these factors, an
entrepreneur should choose to start their business on a
part time level.

In fact it is recommended by other successful

entrepreneurs that new small businesses should be
started part time to allow for the business to adapt to
the market and for the owners to learn more of the
market conditions, industry challenges and to develop
naturally.

Part time entry is also ideally suited to small businesses

starting out with very limited budgets and cash flow.
This form of entry offers the entrepreneur to continue
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in a day job, where cash can be saved and contributed

to the development of the business as well as for
enjoying further opportunity for learning and personal
development, which will redound to the benefit of your
small business.

Full Time Entry.

Full time business entry is best suited for the more

confident entrepreneur. Ideally the business owner
should have a healthy savings to mitigate against slow
business startup and not have to worry about meeting
the needs of living expenses for his/her family. A full
time business entry offers greater flexibility in operating
and growing the business as the restrictions that
accompany a part time entry is non-existent.

Choosing to start your business on a full-time basis will

require that greater planning and control be designed
and established before a decision is made in this regard.
Careful analysis of the market and business planning
should be undertaken and a sound business plan should
be written to convince investors that it is worth
investing in your business.

Even where your own funds are to be used for starting

your business full time, it is still important to plan
properly. Because your own personal finance is at risk
the need for proper planning should be greater when
starting out. Whether choosing to start part time or full
time, you should be clear to recognize the benefits and
challenges of both levels of entry and employ the
necessary feasibility and planning procedures to ensure
success at the chosen level of business entry.

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Chapter 3
Making the Business Legal

Now that you have drafted a solid business plan you

are confident will allow you to attract investors to
finance your business idea, you need now, to give life
to the business in itself. Neither Banks nor investors
lend to ideas therefore the business idea must be given
a life. A type of “personification” or making the
business a Legal entity.

When a business is registered or incorporated, it gives

legitimacy to its operations and the objectives of the
business plan. It also inspires confidence in the owner,
its customers/clients and its investors. Registration or
Incorporation also facilitates payment of government
and personal income taxes from income to be derived
from the activities of the business.

There are several types of legal structures for operating

a business. Here in Trinidad and Tobago and the
Caribbean and maybe most Commonwealth Countries,
you will encounter the three (3) main forms of ways to
make your business legal. These forms of structures
are;

1. Sole Proprietorship,
2. Partnerships/Firms and
3. Limited Liability Company.

Sole Proprietorship: This form of registration is the

simplest form of business structure within which you
can operate. It is sometimes referred to as Sole Trader
Business. In this structure an individual may register a
business name and conduct his or her business under
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such name. The main advantage to operating under this

type of registration is that the process in itself is a very
easy process to undertake.

In this structure, the individual assumes all the

responsibilities and or liabilities of the business, which
may include bad debts or other type of liability. All
business operations account to the personal name of
the business owner and will reflect on the individual’s
credit health and personal reputation. The registration
process is a three step process which includes:

1. Undertaking a Business Name Search.

2. Obtaining an Individual Income Tax Registration
Number and
3. Registering the Approved Business Name to make
the business legal.

Partnership/Firm: A partnership or firm is a type of

business structure where two (2) or more individuals
come together to register a business. In a partnership
or firm, each partner assumes shared responsibilities
for the responsibilities and liabilities of the business. As
in the case of the sole proprietorship type, the partners
are personally liable for any legal or other action that
may be brought against the business.

The process of registration of a partnership or firm is

quite similar to that of the sole proprietorship. The
process includes:

1. Undertaking a Business Name Search.

2. Obtaining Individual Income Tax Registration
Numbers for each partner and

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3. Registering the Approved Business Name to make

the business legal.

Limited Liability Company: A limited liability

company structure is far more complex than both the
sole proprietorship and the partnership/firm structures.
This type of structure establishes the business as an
individual in itself. It makes the company a separate
entity from the owners.

The business has a life of its own and is treated as such

in law. It is taxed separately from the individuals; (who
themselves are still taxed from earned personal
income), the business is liable for any bad debts or
other liabilities and shields the owners or directors
from personal responsibilities for such liabilities.

A limited liability company must be incorporated by a

minimum of two (2) persons referred to as directors.
This type of business structure is well suited to large
corporations which require a board of directors which
is appointed by the shareholders or owners, a set of
operating rules known as the bye-laws and a host of
other policies for governance.

It my advice that any person seeking to register this

type of business structure should seek professional
legal assistance as this type of structure is way more
complex to incorporate than the previous two types of
business structures.

Many corporations have started out as sole traders and

as partnerships and for your business, when the time is
appropriate and your business have outgrown its
structure, then it is best to shift the legal structure of
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the business to a corporation, which is a limited liability

company.

Remember that any business activity that is conducted

deliberately outside of the structures discussed is an
illegal business! Will this then create a problem for teen
businesses? Teenagers not yet having attained the
voting age or the age to acquire a National
Identification Card and who operate a business should
seek to have their businesses registered in their parents
name or in the name of an adult they can trust.

Be sure to have a legal contract drawn up to ensure that

funds are accounted for that that transfer of the
business or any assets thereof will take place on the
teenager reaching legal age to operate his or her own
business.

Remember the Kid Actor from the Home Alone

Movies? And what of the countless others who had to
take their parents or guardians to court to reclaim their
business and assets. Making your business legal is
making your business safely yours!

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Chapter 4
Writing a Successful Business Plan

For all products or services ever invented, it is

accompanied by a manual. This manual is simply a
guide or set of instructions in the operation of same
product or delivery of service. Such is A Business Plan.
Simply put, a business plan is your guide, a manual that
will lead you along your path to starting up and
maintaining a successful business. There are many types
of business plan but we will focus on the Start up
Business Plan.

A business plan has many aims. It is primarily used to

obtain financing such as bank loans, grants, private
investment and other sources of capital investment for
starting the proposed business. For this primary reason,
a business plan should be drafted as realistic as
possible, based on researched facts and not on
“dreamed up” concepts.

The business plan also serves to highlight the business

vision and mission. The vision and mission must be
real and appeal to the receiver of the plan as a vision or
mission that is attainable. If the reader is convinced of
such, then your business plan will indeed serve a good
tool for obtaining your financing.

There are several components or chapters to a realistic

business plan and they are as follows:

1. Opening Statement
2. Executive Summary
3. Company/Business Summary
4. Products & Services
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5. Market Analysis Summary

6. Strategy & Implementation Summary
7. Management Summary
8. Financial Plan
9. Closing Statement.

Opening Statement: In this chapter, as the name

implies, the opening statement is used to briefly
introduce the reader to the intention of the business
plan. It is used to indicate whether the plan is for
obtaining financing or to be used as an appraisal of the
business operations for a forthcoming period of time.
Your opening statement should not be too long, one
paragraph, two at most is ideal.

Executive Summary: This section is written last but

in the order of the business plan, stated just after the
opening statement. In fact it is the first actual chapter
of the business plan. This section is a comprehensive
summary of the entire business plan and the most
significant chapter of the plan. In the executive
summary you should describe the Business, The
Customer, Management, Objectives, Vision, Mission,
Financial Highlights and the Start up Requirements.

The reader, who is usually the Loans Officer or

Investor, will read this section first. If the executive
summary fails to impress or convince the reader of the
business viability, you can forget about getting that start
up loan because he/she won’t even proceed to read the
rest of your plan. Chances are the plan may be returned
or tossed in the garbage bin under the desk.

Company/Business Summary: The company or

business summary is a chapter dedicated to describing
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your company or business to the investor. In here, it is

important to state and describe the Owner, Location
and Facilities and to provide an estimate of the Start up
Requirements.

Products and Services: Use this section to describe in

detail, the products and services you will be offering in
your business. In addition write about the Sales
Literature you intend to employ in the promotion of
the products and services. Speak also of the
Technology and Systems that will be employed in the
provision of the products and the services to your
target customer and finally, use this section to highlight
any possible plans for future product or service
development.

Market Analysis Summary: The ground work for

composing this section of the business plan should
have already been done, that is, if your followed the
advice in chapter 1. Journaling, Studying Ideas and
Crunching Numbers all contribute to an effective Market
Analysis Summary. This Section is 100% dependent on
the facts gathered during the development of the
business idea and the feasibility stages.

Use this section to describe the Market Segmentation,

Target Market Segment Strategy, your Service/Product
Business Analysis and the Competition and Buying
Patterns.

Strategy and Implementation Strategy: This section

is necessary to highlight your strategy for promoting
your product and service, stating your competitive
edge(s) over your competition, describing your
marketing and sales strategy. It is also important to
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highlight your sales forecast and to list out the tasks

and milestones in setting up the business and launching
your product and services.

Management Summary: The Management Summary

is the chapter of the plan where you tell the investor of
your strategy for managing the business. An investor
will be very interested in this section because after all,
it’s their money invested into your care! In the
Management Summary it is vital to list the resume′ of
key management personnel, your organization chart or
diagram, the compensation plan and any other
important information on employees and management
staff.

Financial Plan: Apart from the Executive Summary,

the Financial Plan is the second most important part of
the plan. Most investors or loans officers will skip
through the body of the plan, to get to this section.
Here is where all the numbers in the plan is explained.
This section is for Highlighting Important
Assumptions on the business and the market
environment and for highlighting the Break Even
Analysis Chart or Graph.

The most important highlights of the Financial Plan are

the Financial Statements. The Profit/Loss Projection
is a financial statement that will basically highlight all
income and expenses for the plan period and highlight
the profit/loss made at the end of such period. The
Balance Sheet Projection will give an indication of
the value of the business at the end of the projected
period. It should project the expected Assets, Liabilities
and Net Worth of the Business.

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The final part of the Financial Plan is the Cash Flow

Projection. As it is said, “Cash is King!” This
statement projects how the cash will be used in the
operations of a business. Many businesses fail mainly
because cash is mismanaged.

Closing Statement: This is the final part of the plan

and it is the closing summary. It is where you thank the
reader and reinforce your intentions for seeking your
own business.

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Chapter 5
Getting Start Up Capital

For the several successful businesses and companies I

have started or projects undertaken and the many that
were unsuccessful, there is one lesson that I have
learned from every experience. That lesson is “Money
Follows Vision; Vision Does Not Follow Money!”

This is to say that contrary to popular belief, you don’t

need money to start a business. In this case you already
have your vision (The Business Plan) and to the extent
that you can market that vision, you will be able to
obtain the requisite finance to start your operations.
Unless you are born into wealth or have the backing of
wealthy family or friends, then this truth won’t matter
to you but for the typical ambitious reader, this truth is
all you need to understand.

Once your vision is clear and the business plan is solid,

you should have the confidence to pitch your plan and
share your vision with many. At this stage you don’t
have to worry about your idea being stolen because you
already made the business legal. The more people you
share your vision and plan with, the greater probability
there is of you obtaining the finance to start the
business.

In more theoretical terms now, there are several factors

which will influence the success of getting the financing
you seek. You must be able to demonstrate confidence
both in the written plan and in the verbal presentation
of the plan. Secondly, your plan must reflect smart and
solid benefits to the investors and you must be able to
convince the investor of such benefits.
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Another thing I learnt from my experiences is that

most banking officers have a very limited knowledge of
business. In fact the majority lacks any entrepreneurial
instinct and therefore, they most times fail to recognize
potential in a solid business plan. Ever wondered why
banks reject so many loan applications from small
business owners? Well the answer is simple!

The loan officer as an employee of the bank may never

have had the exposure to a business or the desire to
start a business. Their employment is secure and the
entrepreneurial spirit is hard to comprehend. As a small
business owner, I have found more success at
obtaining loans and financing from fellow business
owners or from private investors than from banks.

In Trinidad and Tobago, there are special purpose state

run companies specifically mandated to assist the self
employed and small business owners with financing. In
fact I have accessed financing through NEDCO –
National Entrepreneurship Development Company in
establishing my publishing company Kingdom
Coaching Company which is responsible for publishing
this book.

When I wrote my first book, publishers were hesitant

to publish my works because I was an unknown author.
I registered my own publishing company, did my
business plan, shared the vision convincingly which
was to make publishing services accessible to unknown
authors and today the rest is history as they say.

Publishing my first book opened many doors and the

today I can truly say that Money Follows Vision and not
the other way around. In the end there are many ways
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to obtain business startup capital and there are many

institutions that offer such services, they are:

Family and Friends: Usually the easiest to borrow

from. You can benefit from zero interest payments on
the loan, no collateral requirement and they usually
don’t pressure you for quick repayment. They are
usually close to your business though and may cause
problems. Friends and family believe they have some
natural right to manage your business because they
loaned you the money to start up.

It is best to establish from the onset, the boundaries of

their involvement in your business so that you do not
make enemies with your family or lose friends in the
process.

Private (Angel) Investors: Private investors or angel

investors as they are more professionally called are
more inclined to investing in new businesses. These
individuals may have themselves evolved from
ownership of small businesses and understand well the
challenges of starting a new business. They will invest
in projects or businesses where a return on investment
is guaranteed and in the shortest possible time.

Angel investors don’t usually require collateral however

their interest rates on the investments are higher than
banks, though in recent times, angel investors have
been known to start demanding collateral against loans.

State Run Development Companies: These bodies

are by purpose designed and established to assist in the
provision of startup capital. By approaching and
accessing the government run institutions, one can also
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benefit from the several incubator and training

programs for developing the knowledge and
management skills for small business owners.

Loans are disbursed against very low interest rates and

the collateral requirement is necessary but in most cases
nonexistent. When I approached NEDCO, my loan
was secured against household furniture items.

Venture Capital Firms: VC Firms are more suited to

larger corporations or limited liability companies. They
are risk averse and will lend based on their acceptance
of a solid business plan based on well researched
figures, trends and market environment. A VC Firm’s
investment takes the form of the purchase of a stake in
your company which requires a seat on your board of
directors.

By investing in your company they become part owners

of your business. There are many criterions to be met
when seeking funding from VCs but the success of
your business will benefit from the management input
from the VC Firm.

Banks: As mentioned earlier, banks are the least

unlikely to invest in a small start up business. Unless
you have an established history of banking, borrowing
or saving with your bank, the chances are very slim to
none that you can access a loan.

Providing that your history is sufficient, and all your

documentation is in order, approach your bank with
every confidence of obtaining the loan. The interest
rate at banks varies and the requirement for collateral is

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an absolute must have. Banks though are also very

aggressive in their collection of payments and
repossession of collateral on default.

Now that you have a clearer guidance on the ways in

how to obtain Start up Capital, remember that “Money
Follows Vision; Vision Does Not Follow Money.”

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Chapter 6
Establishing Financial Controls

Probably the most important aspect of starting and

operating a business is the establishment and
implementation of strong financial control. Finance is
like the life source of your business. It is like blood in
human veins. In other words, a business is not a
business without a financial component to it. In
chapter 3 we discussed the business plan and touched
on the Financial Summary which is in the main the
skeleton for establishing financial control.

Financial control simply means monitoring and

management of the income generated and expenses
incurred in the operations of the business. There are
basic steps to establishing and maintaining control of a
business’ finance. While there are many steps that the
experts may suggest and recommend, there is no real
rocket science to this very important aspect of running
your business successfully.

Some the simple steps that I have implemented in

starting new businesses of my own are:

1. Opening a business bank account.

2. Maintaining detailed and accurate records for
income, expenses, taxes, assets, liabilities and other.
3. Seek out an education in financial management.
Your can do this by attending seminars or short
courses.
4. Hire competent accounting staff or outsource
professional services for preparing monthly, semi
and or annual financial reports.

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Opening a business bank account or merchant account

is a very important tool in establishing financial control.
A bank account for your business serves several
important purposes. They are as follows:

1. A business bank account gives your business

credibility. It says to your bankers that you are
serious about your business and the way that the
finances are controlled. It also gives your bank a
front row seat to observing how your business
finances are managed, in which case if it is in a
healthy manner, can earn you favor points when
seeking that loan.

2. Secondly, it establishes your business as a separate

entity and discourages the co-mingling of funds.
Many countries including here in Trinidad and
Tobago have laws and or regulations that
discourages the co-mingling of the proceeds of
business and personal income. No doubt this is a
measure to stamp out or prevent money
laundering, a criminal activity, which can land a
perpetrator some jail time.

One of my early mistakes in running my first business

was to believe that I could manage my company
finances on my own. What a mistake! This cost me
thousands of dollars in back taxes and bad debt and I
learned that an education in accounting and
outsourcing for further validation of the reports I
recorded and prepared, was one of the best decisions I
ever took and can assure you that it will be a good
decision for you too`.

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As your business grows you will recognize that the

reports and the information therein will become very
important.

Good financial control and record keeping will serve as

an advantage to you and your business when seeking
loans or investment for business growth and in the
opposite, poor financial control or record keeping can
prove the undoing of your business.

Establishing financial control apart from the other

important steps highlighted in the previous chapters
and those that follow will prove to be very important
and beneficial measures in starting up and remaining in
business.

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Chapter 7
Considerations at Start Up

If you’re still reading up to this point it means you have

done most of the hard stuff already and you’re on your
way to starting operations of your business. At this
stage there are several considerations that need to be
made to ensure the successful start up of the business.

There are five (5) basic considerations at start up, they

include:

1. Location for the business

2. Privacy
3. Hiring Employees
4. Advertising Strategies and
5. Furniture, Tools & Equipment.

In the following paragraphs of this chapter we will seek

to expand on the five considerations listed above.

Location: choosing a suitable location can prove tricky

and may not seem important but it is a most vital
consideration to be made in starting a business. It is
vital because situating a business in the wrong location
can spell disaster for start ups. For example, you
wouldn’t set up a professional consultancy in an
industrial estate or a retail store in a gated residential
community and it is for these reasons choosing a good
location is important.

Retail stores are best suited for busy pedestrian traffic

areas; manufacturing operations in industrial zones and
professional services in city or metropolitan areas.

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There are several types of businesses such as

professional and practical services that can be started
out of your home and consideration should be given to
this option as it can save you money in the start up
phase and shorten the time taken to start operations. If
you’ve decided that you’ll operate your business from
home then the next step is another important
consideration.

Privacy: all businesses should be operated in private

and if not, disturbance free environments. For the most
part businesses should be housed in accommodations
separate and apart from competing activities. This is
most applicable to home-based businesses, where
privacy and disturbances are most commonly impacted
and affects the best performance of the operations.

If your business is located at home there are several

steps that should be taken to ensure that productivity is
not compromised, they are as follows:

1. Ensure Privacy. Keep your business space separate

from common areas around the home. This can be
best achieved by utilizing a spare room or garage
space or in the worst case, isolate a corner in the
home that you think you could manage some
privacy.

2. Define Workspace Time. Operating a business

from home can create a false sense of comfort and
control. You should define set working hours and
practice being on time to work. It is very easy to
want to steal away from working time to watch TV
or goof around.

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3. Set Working Time Rules. Where there is family

around, be clear to discuss with them upfront
working time from family time. Spouses and
children can be very insensitive to your working
time if the boundaries are not set in advance. By
making clear the rules you will avoid breaking
hearts or making your loved ones feel neglected
and having the peace to work at home will be to
benefit of the business.

Hiring Employees: according to the size of your start

up or the type of business you establish, hiring
employees may be unavoidable. Where it is necessary to
do so, it is important to avoid certain pitfalls that are
mostly overlooked. Choosing bad employees from the
start can stifle business growth and frustrate you whilst
choosing competent employees will benefit you and the
business.

What to avoid when choosing employees.

In choosing employees a small business owner should

avoid two (2) important situations, they are:

1. Avoid Hiring family members or friends. Family

and friends are always the first to pledge support
and make themselves available for selection when
you start out in your business.

As the business prospers, it becomes more and

more difficult to govern and instruct them, because
of their misplaced belief of your obligation to
them. They tend to believe that they become part
owners of the business the longer they stay.

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Furthermore, your leadership can be undermined

or become ineffective especially if enforcing
disciplinary action is required against family and
friends. It is always better to keep family and
friends just that and don’t try to make them your
employees.

2. Avoid Making Promises you can’t honor. One of

the errors that entrepreneurs make when hiring
new employees is making promises you can’t
honor. Many small business owners make this
common mistake so as to put an exaggerated image
of the business and as a result give employees a
false expectation of working at your business.

Giving an employee false hope is like putting

dynamite in the hands of a toddler and leaving the
match on the floor. Eventually that toddler
(employee) is sure to find the match and you can
figure out the result. Let’s just say an employee that
lacks motivation or respect for you is an explosion
waiting to happen.

Things to Ensure you do when hiring employees.

There are several things to ensure when hiring new

employees, of which the first two points are very
obvious. They are:

1. Ensure you don’t hire family members or friends.

2. Ensure you don’t make promises you can’t honor.
3. Be sure to hire qualified and competent staff.
Ensure that qualifications are legitimate.
4. Ensure that references are supplied from the
prospective employees at the time of application.
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5. Check those references for legitimacy.

6. Don’t discriminate! Give every applicant a fair
chance at tryouts or in this case, an interview.

Advertising Strategies: advertising is essential for

attracting customers and clients and generating public
awareness of your new business. There are many forms
of advertising mechanisms that are available to small
businesses and when choosing such, careful
consideration should be made. One should avoid being
enticed into using expensive forms of advertising your
products and business services. Advertising is essential
for business promotion and growth.

There are different forms of advertising that small

business owners can utilize for business promotion,
they are as follows:

Flyers and Brochures: flyers and brochures are the

cheapest form of small business advertising and the
easiest to produce. They are ideal for highlighting
business and product information. A desktop computer
with basic word processing software, a printer and a
ream of paper and you have 500 flyers or brochures to
distribute. Distribution of flyers and brochures can also
be cost effective. They can be distributed in the
newspaper as inserts or in the mail. Flyers and
brochures can also make for personal hand to hand
distribution.

Business Cards: a business card is a highly effective

tool for spreading awareness of your business, its
products and services as well as personal information
on the owner or representative. The business card is a

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very personal form of advertising as it is usually

distributed by hand to hand exchange. It can also serve
as a tool for meeting and growing contacts at network
and other social events.

A business card may vary in size but the most common

size 3.5 inches x 2 inches. On a business card you can
and should include the business name, the
representative’s name, business address, phone, fax and
email contact, website address and if possible include
your business logo or product photo. The good news
for startups is that you can design and cut your own
business cards or ordered at very low cost.

Classified Ads: a small business can benefit from

placing advertisements in the local newspaper or
magazines at affordable costs. Classifieds are cheaper
than display ads which require professional graphic
design services. Instead classified ads are text based and
the cost is determined by applying a rate per word per
day. The classifieds sections of newspapers and
magazines are widely searched by potential buyers and
you can generally expect good results.

Extra visibility can be achieved by manipulating or

enhancing text fonts adding bullet points and
highlighting key text and numbers.

Business Documents: is a highly under-utilized and

even unrecognized form of small business advertising.
It is expected that during everyday business
communications, several types of business documents
are generated and exchanged between the business, its
customers, employees, suppliers and regulators. These

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documents include letters, invoices, quotations, receipts,

purchase orders, reports and proposals.

Images of products and or the listing of services can be

creatively inserted on these documents in spaces in the
header, footer or side bars and serve to increase
awareness of their existence to persons whom the
documents are exchanged with. The benefits of this
form of advertising for small businesses are that it is
cheap as no extra costs are incurred for preparation and
distribution.

Newsletter: newsletters are another form of small

business advertising which is practical and inexpensive
to distribute a well. Content in newsletter could be
compiled in a one page document or even into
multipage editions depending on the volume of
information to be included. Newsletters can be
distributed in ways similar to flyers and brochures and
as well as via internet email.

Mail Order Catalogs: mail order catalogs are more

expensive to produce but costs can be bridged by
producing fewer editions per year. Mail order catalogs
can prove highly effective for persons operating
product distribution businesses either home-based or
where no formal walk-in warehouse stores are
established. The mail order catalog by design is
intended to be preserved or put away for later
reference, thereby increasing its lifetime over business
cards, flyers, brochures and newsletters.

Internet Technology: internet technology is now

more than ever the premier form of business

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communication and interaction. Even with the advent

of social media networking, using the internet for
product and service advertising for small business is an
invaluable tool and asset for the small business owner.

The internet offers email for communication, websites

for creating virtual offices and storefronts and several
other applications for voice and other communications.
There are several do-it-yourself email and website
building services offered online and entrepreneurs can
easily build and continuously develop the business
websites online.

Where website development knowledge is limited it is

wisely recommended to hire a professional web-builder
to design and develop your business website. Be sure to
include information of everything related to your
business and where possible, include a storefront to
conduct sale of products and services. Make sure to
include your email and website addresses on all your
business documents to make it known that you indeed
have a website or email.

Having a professionally designed website may cost

plenty upfront but customers appreciate a business
with a website and email as it gives the impression of a
legitimate and well organized business and offers
reliability in business communication.

Furniture, Tools and Equipment.

The final major consideration every entrepreneur must

make when starting up their new business is the choice
of furniture, tools and equipment. These items are

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essential for ensuring operatives comfort and

productivity of the business. Selections should be made
on functionality and expensive items should be avoided
if less expensive items can offer the same or close
enough features and functionality.

Keeping in mind that your business is new, it is vital to

limit high upfront costs on items that depreciate over
time and end up being liabilities rather assets.

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Concluding Section One

In section one, How To Start Up A Business, we detailed

and discussed the steps necessary to inform individuals
desirous of starting their own small businesses and the
steps and considerations necessary. After reading
section one, the reader should be clear on what is
required to start their new small business.

From the idea conception stage through to business

planning, registration and incorporation, and physical
planning requirements; enough information is
disseminated to encourage and guide the entrepreneur
in starting your business.

If you have taken action and started your business, it is

important that you continue on reading section two,
How To Remain In Business where we will focus on
policy, development and growing your new business.
We encourage you to read on and hope that you will
apply the recommendations offered in the following
chapters.

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SECTION TWO

HOW TO REMAIN
IN BUSINESS

Coming Soon!

For other books by the author visit

http://smedirect.webs.com/apps/webstore/
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