During this step in your small business startup, you define your requirements for a business idea. I recommend basing these requirements on your needs, desires, abilities, resources, time limits, and risk limits. Before beginning this step you should have a strong desire to start a business.
The desired result of this step is a set of written requirements for a business idea. The list should show the above requirements, plus any additional items you may want from your small business.
Guidelines
The following guidelines may be useful when determining your requirements for a small business startup.
Satisfy your needs and desires — You may encounter difficulties in getting your business started and making it a success. A business idea that excites you, that satisfies your needs and desires, will help you overcome these obstacles.
Stay within your existing capabilities and resources– When starting a business, you have many things to learn. This is why the business should use your existing knowledge and skills. If you have too many new things to learn, you will be overwhelmed. Also, you need to stay within your existing resources or else you may never have what is needed to start the business.
Set reasonable time and risk limits — Don’t overwork yourself in your new business. You need to keep in good health. If you are starting a part-time business, you need enough energy to keep doing your main occupation. You also need time for your family and friends. If you exceed your risk limits you will always be worrying about the business failing, and you will find it difficult to run your business successfully.
Reminder — Expect to make mistakes and have setbacks in your new business. Learn from your mistakes and don’t repeat them.
Procedures
The written answers to the following questions should help you decide on your requirements for a business idea. You can add any other items you want to consider when choosing a business idea.
Your needs — Monthly net profit you want from the business by the end of the first year. Monthly net profit you want from the business by the end of five years. Non-financial needs you want the business to satisfy. Any other needs you have for this business venture.
Your desires — Your interests in life. What you want to achieve in life. Any other desires this business venture can satisfy.
Your abilities — Your education and training. Skills developed in your current and past jobs. Talents used in your hobbies or other personal activities. The types of business activities you are capable of doing. Any other abilities that can help make the business venture into a success.
Your resources — What office facilities, shop facilities, and vehicles are available for this business venture? What office equipment, furnishings, and supplies are available? What computer equipment, programs, and supplies are available? What other resources are available or can be easily procured? What are you willing to do to make this venture into a success?
Your time limits — How much time are you willing to commit to this business venture?
Your risk limits — How much cash and risk are you willing to commit to this business venture?