Session 1-7 thru 1-15



Session 1-7

Developing Your Business Idea/Assessing Your Situation

A. Your Business Idea

There are three ways to start a business: start it from an idea, buy an existing business (or share in its ownership), or purchase a franchise.

Too often, people start a business from the first idea that comes to mind, instead of carefully explore other opportunities. If you don’t have a business idea, but have a burning desire to go into business, this section will assist you in identifying worthwhile business opportunity.

The first step in undertaking any serious endeavor is to look closely at yourself. You are the key element in the success of your business. You will assume many roles: owner, salesperson, producer, decision-maker, manager, and financial controller. In assessing yourself, you need to be brutally honest about your strengths and weaknesses.

You also need to choose a business that will give you pleasure as well as income. Therefore, the object of this first exercise is to identify business opportunities that could be profitable, but also personally fun and rewarding.

1. Why do you want to start and run a business? What motivates you to follow this path?

2. Quickly write down your five interests These could include hobbies, skills, or previous work experience that you enjoyed. (For example: playing golf, collecting antique furniture, selling home electronics, working with computers, etc.)

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3. Now, consider each of these as an income opportunity (for example, if you have sold home electronics, you might want to explore whether a retail outlet or repair service would be profitable in your community. if you are knowledgeable at income tax preparation, perhaps a home-based tax service would be right for you). Using the Interests listed above, describe an income opportunity for each, using the spaces below.

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Session 1-9

4. Now, narrow the list down to your three best business ideas. Write a short description of each one. You will return to these ideas after assessing your personal situation.

Idea #1

Idea #2

Idea #3

B. Your Personal Resources

Your business success is determined by your abilities and self-confidence. Both can be strengthened and developed through learning and experience. Compare yourself with some of the traits mentioned in Chapter 1 of the NxLeveL® Guide for Business Start-ups to determine whether or not you have what it takes to be a successful entrepreneur.

Next, you need to create an inventory of all the resources available to you. You should include everything that could help you to get up and running, from your own vision and energy to the money in your savings account to friends who are willing to invest in your business. The following questions will help you to list these resources

5. What skills and experience do you bring to a new business venture? Describe your expertise. What are your strongest business skills?

6. What personal qualities and traits do you have that will help in start and operate a business (consider your interpersonal skills in particular. Are you a leader or follower? Have you had experience supervising or managing?)?

7. What is your entrepreneurial history? Have you worked for an entrepreneur or a start-up company? Have you owned a business before? Was it successful? If not, what did you learn?

Session 1-11

C. Family Considerations

It takes a lot of time and energy to start a business. There is always a risk of devoting too much time to your business and ignoring other parts of your life. Therefore, you must assess possible changes to your lifestyle, family, social and professional relationships before you launch a new business.

From a business point of view, success depends on a supportive home environment. Involving family members in the decision-making process may reduce the stresses of starting and growing a business.

8. What are the possible effects on your family, spouse, or life partner of starting and operating a business? Will they support your decision?

9. If you are considering a home-based business, what are the advantages and disadvantages? Consider space, electrical outlets, parking, and Internet connectivity.

|Advantages |Disadvantages |

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Session 1-12

D. Your Strengths and Weaknesses

Coming up with a potentially great idea for a business is only the first step. Understanding your ability to implement the idea is the next step. Based on your inventory of abilities and experience, summarize your strengths and weaknesses as they relate to the business skills necessary to start and grow a successful business.

Session 1-12

|My Strengths Are: |My Weaknesses Are: |

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10. What steps can you take to overcome your weaknesses?

E. Your Financial Resources

Must the business be able to pay your monthly living expenses? If so, you need to determine how much money you will need from the business to support yourself and family? Use the following worksheet to determine your total living expenses. This exercise will help you begin to set realistic income goals for yourself and your business.

Session 1-13

Monthly Expenses Worksheet (double-click to edit)

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Session 1-14

Your Personal Financial Statement

This worksheet will help you to prepare a Personal Financial Statement that lists your total assets (what you own, whether paid for or not) and your total liabilities (what you owe). You should prepare this statement before investing your personal assets in the business. The market value of assets is the amount you would receive today, if you sold the assets for cash.

Your Net Worth is determined by the following formula: Total Assets – Total Liabilities = Net Worth. This calculation will indicate how much you have available to invest in your new venture.

Personal Financial Statement Worksheet(double-click to edit)

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Session 1-15

F. Starting the Decision Process

Once you have thoroughly considered your experience, business ideas, financial capability and family considerations, you are ready to start the decision process. The central questions are: Why do you want to go into business, and do you have the supportive environment to do so?

Please be aware that this is only the first step. Your business decision will require further research. (For example, who are your customers? How can your reach them? Who’s your competition? How much money will you need to get started? The workbook will help you research these questions.)

Look again at your three best business ideas, write answers to the following questions:

11. Based on my personal skills, interests, strengths, and weaknesses, I am most interested in pursuing the following type of business.

12. Explain why this business will be successful based on your personal situation, not the marketplace. In other words, what are you bringing to the business that will make it successful? (Expertise, money, experience, energy are examples.)

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