Contact Information

Phone: 915.562.9223
Toll-Free: 877.962.9223
Fax: 915.562.6919
Email: info@indivsys.com
Hablamos Español

Your personal commitment and ability to start and run a business is the first place to begin.

Motivation

Why have you chosen this particular business? Do your reasons make good sense? How does your family feel about the time, money and effort you and they will be required to contribute to the business?

For many, the answer is that they are tired of working for someone else. That is not enough to make a business succeed. That is why we have included the third question. For the answer to the second question, you may need to answer the questions in the below categories first and then determine if your reasons make good, logical sense. Starting a business is a family investment. Even if your spouse and children don't interact directly with the business, they are the ones who will have to suffer the loss of your time for them and your direct contributions to the household. Their willingness to make a commitment to your business's success can be as critical as your own.

Skills

What is your background in the business you have chosen? Why do you think you can succeed where others have failed? What are your strengths and weaknesses and how can you best use them to your advantage?

If you have no background in the area, go back to question #1 and re-analyze your position. If you have, is it sufficient to make the business succeed or will you have to bring in people with more expertise in certain areas? Are you a good organizer, marketer, manager, salesperson, etc.? What qualities do you have that others don't? What can you bring to your business that is unique and what areas do you need to work on? Are you willing to work extended hours and do most of the work yourself, or will you have to hire employees to assist you?

Finances

What financial resources do you have both to start and to maintain the business until it pays for itself? Can you afford to lose everything if you fail?

Can your family survive without your income for at least a year if not longer? Collect information on how long this type of business takes to pay for itself because you'll not be able to take any out for yourself until it does. Are you going to need to take out a loan, and, if so, what type (SBA, Signature, etc.)? What type of credit will you need, if any, to keep your business running smoothly? You must be prepared to lose everything if the business folds, especially if you have taken a loan for beginning capital.

So, have a working contingency plan for failure.

Defining your market and analyzing its potential can make all the difference in the world to success or failure in the first year.

Product

You must first define your product. Is it a commodity or service? What are its features? What makes it different from others of its type on the market? Can you sell your product at a competitive price?

Price is no longer the only interest of new customers. They want comparable product or service for a reduced price, so look your product over carefully and make sure it will stand up to close scrutiny before you reduce your prices too far. Remember, most of your customers grew up with "You get what you pay for" so don't cut off your nose despite your face and price yourself too low. Concentrate on the positive features of your product - its originality, your improved location, variety of services, etc. - to get your customers, not its price.

Target Market

Once you have defined your product, define your target market. To whom are you trying to sell your product? Why will they be interested in your product and not Mr. Jones's down the street? What is it they are looking for? What is your focus? How many of these customers are there and how can you get your share?

Defining your market and your share of that market is critical. Until you know who you are selling to, you cannot make any definitive plans to attract their attention. Once you know who they are, define how you are going to make them look at you and not the other guy.

Competition

Who is your competition? What are their advantages over you? What can you do to even up the odds?

What types of factors can give you advantages over them such as: free delivery, better locations, more customer service, local offices, etc.? All of these are ways to one-up the generally larger and more well-established competition.

Making sure you keep costs down and sales up is important to the success of any enterprise.

Tools and Equipment

What are the essential tools and equipment you will need? Do you have them, or will you have to get them? Which items are accessories (e.g. nice to have) and which are critical?

For example, many service-oriented businesses can be run from the home reducing costs considerably. What will you need in the way of furniture and computers and telephones? What about banking considerations, forms and paperwork? Can you drop ship your product (have the
manufacturer deliver directly to the customer in your name) or will you
need inventory? If so, how much inventory will you need? All of these questions will help determine how much you will need in the way of starting capital and working capital.

Business Knowledge

Are you versed with the supply and demand information side of the business? Do you know how prices are set, how services are completed, how delivery is made? What are the keys to success in this type of business and do you have at least two or three of them?

Have you spoken to your target market/potential customers to find out what is important to them? What about interviewing members of trade
associations, suppliers and even your competitors? Remember that knowledge is power in any business. The more information you have about the business, the better you will be able to handle fluctuations and problems.

Contingency Planning

What is the potential for failure and can you compensate for the risks? What additional opportunities for expansion or change are there for the future?

Having a contingency plan is always good. For example, you may open a new Security Company to sell security equipment, but find once you've started that the monitoring side of the business seems to be in greater demand. Be ready to change your area of concentration to take advantage of that information. Or, suppose you had planned to use direct mail contacts as your primary advertising and find that telemarketing will work better. Be prepared to do it. Contingency planning and flexibility are two main keys to success especially for the new and small business.

By projecting your business's performance, you can determine if you can realistically get it off the ground and keep it running as well as determine how much and what kind of capital you will need.

1. Sales

How is your pricing determined? How many sales can you reasonable expect to make in a month? How will you collect on these sales? What will you do if customers don't pay their bills on time?

Price your product competitively, but cover all of your expenses, not just the product costs. Estimate your sales very conservatively. Use a worst-case scenario rather than a hoped-for or desirable level of sales. When you plan for the worst, if it happens, you will survive, and maybe even thrive.

Regardless of what anyone (especially a salesperson) says plan on a maximum of 1/10th of 1% return on your advertising dollars. This allows room for improvement. And remember, no one succeeds without advertising.

2. Expenses

What costs do your have? Which are standard monthly costs and which will vary with your volume of sales? What can you do to keep these to a minimum? Which costs can you drop if things take a turn for the worst? Where is your money best spent?

Costs are separated into fixed and variable costs. Fixed costs are items such as Rent, Phones, Utilities and Salaries which don't vary that much from month-to-month. Variable costs are usually related to inventory purchases and/or manufacturing of products and deal with costs that will increase as sales increase and decrease as sales decrease. A non-manufacturing variable cost would be Sales Commissions based on sales volume.

All known costs must be listed and remember to have some set aside for the unknown, and don't forget your advertising budget.

3. Projections/Analysis

How long will it take to break even? Make a profit? Expand? When will you need to add personnel? Buy inventory? Purchase new equipment? Take a salary for yourself?

Make a realistic projection of anticipated sales and expenses for at least 12 months, preferably, 36 months. This should include all possible contingencies you can think of that are probable, and, remember, estimate sales low and expenses high. Include your salary as soon as you will need to take it.

By including all possible expenses with sales at their lowest anticipated point, you will give yourself some breathing room should the business not perform as well as you had hoped.

You are an expert on your business, but that doesn't mean you are an expert at keeping records. Don't try to do it all yourself. Remember the adage "A Jack of all trades is a Master of none". If you try to be a boss during the day and your own bookkeeper at night, you'll anger your family, burn out from lack of sleep, and end up doing everything badly. Concentrate your time on what you know and hire a professional for the paperwork and financial services.

Click on the link to learn More about Choosing A Financial Consultant and Tax Preparer.

Depending upon your business, there are several entities who may need to be contacted. Again, some of these are State-specific. So, be sure to confer with your tax professional before starting this process to make certain you don’t forget anything of miss an agency that you need to contact.

1. Internal Revenue Service - If you are a sole proprietor without employees, your Tax ID number is your Social Security number. So you don’t need to do anything with the IRS unless you have employees or you aren’t a proprietorship in which case you will need to contact them for:
If you have employees:
• Form SS-4 (Tax ID number)
• Circular E (Withholding and Social Security tax rates
• Form W-4 for employees to complete for exemptions and withholding information
• Forms 941 and 940 Employer Tax Returns (to remit tax and unemployment)
If you are any form of business but a sole proprietor:
• Form SS-4 (Tax ID number)
The IRS is listed in your local phone book in the Business Pages and there should be a local number, but:
• Main toll-free number: 1-800-829-1040
• Taxpayer Advocate: 1-877-777-4778

IRS Director of Practice: 1111 Constitution Avenue NW Simples N: C: SC; DOP Washington, DC 20224

Internal Revenue Service Austin Service Center Austin, TX 73301

2. State Taxing Authority - You will need to contact them concerning:
• Sales Tax ID numbers and forms
• Any special licensing requirements

In Texas, the number is: 1-800-252-5555
In El Paso, the local number is: 915-592-8827


You will also need to contact your State if registering a Corporation, Partnership or Limited Liability Company

3. State Workforce Commission - You will need to contact them regarding:
State unemployment and income tax information including tax rates and requirements

In El Paso:

• Texas Workforce Commission
  1420 Geronimo, Building C, Suite 1
  El Paso, TX 79925
  Phone: 915-774-0091
  

In Austin: 512-463-2731
Toll Free: 800-832-9243

4. County Officials -You will need to register your Assumed Name with the County Clerk's Office. This Costs $15.00 in El Paso but may vary State to State and City to City.. Also, there may be other licensing and/or permits pertaining to your particular business. Their El Paso phone number is 915-546-2071
5. City Officials - There are many health, zoning and licensing regulations which may or may not apply to your business. In El Paso, these entities are centrally located at City Hall. The best place to start is the Licensing Department. The main number is 915-541-4000.