Start Here November '21

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Page 97 of 102 93 S T A R T H E R E 2 0 2 1 This next statement may seem harsh, but it has proven to be true time and again. If you do not have a unique idea that satisfies an unmet market need, consider buying a franchise. If you are going to create a new enterprise that emulates a well-established business, you are, at worst, likely to fail and, at best, be gobbled up by the competition. If you do decide to purchase a franchise, conducting due diligence is critical. In short, know everything about what you are getting into before you sign anything. To determine your market niche, talk to potential customers, competitors, and suppliers. Ask prospective clients to make com- parisons between similar offerings available on the market and what would be of added value to them if improvements were made. No matter how great a new idea is, if no one is motivated to buy it at the price you must sell it for to make a profit, you don't have a business. Taking the Plunge To turn an activity into a business, you don't need to reach a cer- tain level of sales or income. To have a business, all you really need is a reasonable expectation that you'll make a profit from the activity. As far as the Internal Revenue Service (IRS) is concerned, you are supposed to report income "from whatever source derived." This means that whether you consider something a hobby or a business, if you are making money, you need to report it on some form of tax return — either your personal one (in the case your "business" is a sole proprietorship), or a business version (if you decide to create an LLC or S-Corp). Have I confused you or begun to scare you off? Hopefully, I have not, but this is a perfect time to make you aware of a very valuable (and no-cost) resource you need to utilize — your nearby Small Business Development Center (SBDC). Go to www.americassbdc. org, enter your zip code, and locate one of nearly 1,000 SBDC offices that offer no-cost business consulting, help with writing a business plan and applying for Small Business Administration (SBA) — the U.S. agency that funds SBDCs — loans and grants, and low-cost training for startup and newly established businesses. At very least, every business should have a plan. A good busi- ness plan consists of a strategic, tactical, and financial overview. It should answer the following questions: • What are you planning to do? (The goals) • Why are you doing it? (The motivation) • How are you going to accomplish this? (The methodology) • How much money do you need? (The means) • Where will the money come from? (The resources) A business plan should help you recognize the risks and chal- lenges as well as the opportunities and strengths of the concept behind your business. There is no set format for the business plan. It is just important that every business have a sound, thought-out, goal-oriented plan — then refers to, is guided by, and executes that plan daily. If you are passionate about a craft or other activity, your money-making opportunities are virtually endless these days.

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