Business Setup In Tulsa, OK
The best advice to a small business in the start-up phase is to keep things simple, organized and at low cost. Cost is the price associated with an actual expense and the value of expended time.
It is common for soon-to-be business owners to create a large, robust and complicated business plan. Such a plan is needed when seeking investors or financing for a sustainable business model. However, when starting, a simple business plan to test ideas is recommended.
The Business Plan
At the very beginning, a one-page business plan at a high level is needed. This one-page plan should contain:
- The Vision – the goal of the business
- The Mission – the explanation of why the company exists
- The Objectives – the goals and the procedures to accomplish the vision and the mission
- The Strategies – the plan to achieve the objectives in bullet-point format
- The Plan – the smaller task-oriented actions to achieve the objectives
This one-page plan will be organized and, as time passes, the vision will clear for the formal business plan.
It is important for the entrepreneur to be realistic about the budget. The burn rate must be known.
The burn rate is the cash spent month-over-month before the business earns a profit. A rule of thumb is to tack on 20% of the overall expenses for “incidentals” for a credible overage.
The Legal Entity
A part of the start-up budget will be the expenses associated with the forming of the business entity. It is advisable to thoroughly research the expenses at the City, the County and the State levels for appropriate registrations and licenses.
Often, during the “test” phase of a start-up, the entity is a sole proprietorship for less paperwork and expense. After an appropriate amount of time when the business grows and the model proves sustainable, the advice of an attorney and an accountant should be sought for the permanent business entity.
The Care of the Money
Whatever the business entity, the business funds should not be commingled with personal funds. In most financial institutions, once the entity is registered and formed, and where the entrepreneur has an established relationship, the opening of a business account is easy and, sometimes, free.
At this phase, it is not necessary to begin credit lines. The business account is really a placeholder for the money generated from the business and from which the expenses of the business are paid. A separate account for business operations is an organized way to track the activity and the profitability of the business.
This article offers the four steps in the “test” phase of a start-up business until the model proves sustainable.