Counselor gives hints for successful start

Whatever your reason, starting your own business can be done with little more than dreams. But starting one that will be successful - now, that is going to take work, advises Luis Reynoso, business counselor with the SBDC.

"It takes a lot of guts to start a business," he warns. "You're going to take some risks, you're going to strain some relationships with your family, and you're going to spend a lot of effort."

Taking several steps first will boost your chances of success, Reynoso said. He recommends:

Checking the feasibility of your idea

Consider the type of business you want to start, and whether it fits your personality. If it is not your passion, or not what you want to do, that's a bad sign.

Other personal factors to consider include how your life will change, how much money you need to start the business and whether you will quit your current job.

Then investigate whether there is enough demand for your product or service.

"The most essential element of a business is the customer," Reynoso said. "Somebody has to be willing to pay for whatever product or service you provide."

Understanding the profile of your typical customers will help you decide important factors such as where to locate your business and how to advertise to them, he said. Census databases, city Web sites, associations and library services such as ReferenceUSA are good sources of data to help you quantify the market, its money-making potential and your competition.

Writing a business plan

Rather than a tedious, dust-collecting document, "It's your plan of action, your route to your destination," Reynoso said.

And if you need financing, it communicates the details of your idea to your rich uncle or your bank.

Estimating your costs is part of the plan. They include licenses, tenant improvements and other start-up costs; the cost of any goods to be sold; and fixed costs such as rent, utilities and salaries.

From there, you can figure out how much you need to sell to break even.

Making a plan also helps you identify pitfalls, whether they are competitors or regulatory hurdles, and figure out how you will overcome them.

Sample business plans are available on the SBDC's Web site at www.maricopasbdc.com.

Taking care of legal issues

Once you decide on a name, check with the Secretary of State's Office to make sure it is available.

If you are going to operate nationally, check with the U.S. Patent and Trademark Office. To operate on the Internet, make sure the domain name you want is available.

You also have to decide what type of business entity you want to establish. They include sole proprietorships, S corporations and limited liability companies. Each has its own tax requirements.

Business licenses and permits also must be obtained. The "Business Assistance" section of the Arizona Department of Commerce's Web site, www.azcommerce.com, is a good source of information on which ones are needed in your city or town.

Executing the idea and the plan

"Here comes the fun," Reynoso said.