Essentials for Starting a Buisness

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Essentials for Starting a New Business

"Plan for the future, because that is where you are going to spend the rest of your life " Mark Twain

There is a so much to learn about setting up and running a business as well as having the knowledge of your profession. Do adequate research on owning and operating your own business first

Insurance

Adequate insurance, stable finances, available credit, a good working relationship with your banker or business backer, accounting, tax law, properly setting up your business (sole proprietorship, Limited Company etc.) as well as having the necessary discipline and organizational ability to pay bills on time, are just some of the things required and to start maintain business momentum. This is all in addition to sales, marketing, customer relationships, vendor relationships, and actually doing the work.

Business License

Obtain business liability coverage; specifically Garage Keeper's Insurance (fixed location) or a Commercial General Liability policy (Mobile detailer’s).

You might want to consider persona asset protection in the form of a limited liability company (abbreviated by LLC) in the law of many of the United States is a legal form of business company offering limited liability to its owners. It is similar to a corporation, and is often a more flexible form of ownership, especially suitable for smaller companies with a limited number of owners. Unlike a regular corporation, a limited liability company with one member may be treated as a disregarded entity by the IRS. A limited liability company with multiple members may choose, generally at the time that the new entity applies for a US federal taxpayer ID number, to be treated for U.S. federal taxation purposes as a partnership, as a C corporation, or (if it is otherwise eligible) as an S corporation. An LLC can elect to be member-managed or manager-managed.

Starting a new business demands much more than a good idea, a new business needs seed capital, which means that you must also convince a wide range of people that your idea is a good one and that you can successfully generate profits in the future.

General Rules

Some general rules of engagement before you start should include:

Be as brief as possible, short, sweet and to the point.
Place financial data in an appendix at the end of the document
Demonstrate respect for your competition
Mix in a spell and grammar check before you send your plan
Justify any projections you make for your business
Focus on your profit potential
Include a risk analysis for the business and a realistic diagnostic for its survival
Go easy on industry and technical jargon
Be honest about any major claim
Talk about relevant experience of your executive team

Key Steps

Here are four key steps you need to take

Raise finance

There are a number of options if you need backing to start a new business:

A bank loan
Venture capital
Investment from family and/or friends
'Business angels' - independent, wealthy individuals looking for investment opportunities

Each option has advantages and disadvantages - a bank loan can be expensive, for instance, but allows you to keep a greater control of the business. Before you go about raising capital, it is also worthwhile exploring whether your business may qualify for a grant from a local or national source. Businesses that are likely to employ workers from deprived areas could qualify, as could those that will have a beneficial effect on a deprived area or section of society.

Similarly, grants and tax breaks are also available in specific locations, such as enterprise parks section of society.

Business Loan Application

A Financial Plan is usually a requirement of a lending institution or investor; specify the amount of capital which you expect to put into the business. Provide specific information as to how the loan will be used; purchase of new equipment, a building, inventory; supplies or working capital. Identify what items will be purchased or leased, name potential suppliers and estimated costs.

Show return on investment (ROI) for this capital and estimated profit. In the event the loan or investment cannot be made, describe what changes, if any, must be made in order that the business would still be operational.

Financial Data

Sources of funding; Mortgage Loans, Term Loans, Personal Equity Investments. Applications of funding; Purchase Building, Purchase Equipment, Renovations, Inventory, Supplies, Working Capital.

Balance Sheet

Assets- Cash, Accounts Receivable, Inventory, Supplies. Fixed Assets; Fixtures, Vehicles, Equipment, Building, Land.

Liabilities- Accounts Payable, Bank Loans, Net Worth; Owners Equity

Operating Expenses

Salaries, Wages, Commissions, Payroll Taxes, Marketing, Advertising and Promotion, Office Administration, Legal and Accounting
Operating Supplies, Bad Debts, Rent, Repairs and Maintenance
Utilities, Insurance, Taxes and Licenses, Depreciation, Interest

Break even Analysis

Sales
Cost of goods / services sold
Gross profit
Fixed expenses
Net profit (loss)
Gross profit as % of sales

Divide Gross Profit by Sales (To show percentage relationship)

(Break even) divide fixed expenses by Gross Profit (As % of Sales expressed as a decimal)

Supporting Documents

Personal Resume
Job Descriptions
Financial Statements
Credit Reports
Letters of Reference
Letters of Intent
Copy of Lease
Copy of Agreements
Copy of Contracts
Copy of Proposals
Quotations and Estimates
Census and Demographic Data
Industry Surveys

Write a business plan

The first and most important step in raising finance is a solid and convincing business plan. Competition for the attention of banks, venture capitalists and other investors is fierce and potential investors receive many hundreds of business plans every year.

If you are to win backing for your new company, your business plan must stand out from the pack. Make sure your business plan follows these guidelines:

The front cover should be clearly dated and should identify ownership of the plan:

A clear index:
An executive summary, providing the reader with a brief (no more than a single page) but thorough idea of the proposal: organizational information, which should include: contact numbers; the company's legal form, registration number and incorporation date; directors and shareholdings, if appropriate; employment numbers and the projected increase in staff over a specified time scale; the names and addresses of the company's advisers.
The main section, which should provide a history of the organisation with a mission statement, clear details of the project being proposed for funding, a thorough analysis of the market, customers and competition, management details and finance details.
Management details should include the CVs of main management and an analysis of the team's ability to manage marketing and sales, finance and administration and technical issues.
The finance section should include projections for monthly cash flow, and profit and loss accounts and balance sheets covering a minimum of two years. An assessment of the project's long-term financial viability should also be included, along with a realistic statement of the total funding requirement (split between capital expenditure and working capital).
A good source of information is ‘Business Panning Made Easy’ (bplans.com)

As the business expands and changes are made, the business plan will need to be amended and revised to fit the new business environment. The business plan should be treated as an ever evolving document, don’t get caught up in following the plan rigidly or you may end up missing new business opportunities

Offices

Find an office / detailing space.

Once your funding is in place, the next step is to find a base for your company. Again, there are a number of options:

Be conservative. Take your time and set priorities.

Choose a location with easy access: This can be a personal residence, mobile rig, commercial building, or rental space in an existing automotive-related business (car wash, lube shop, stereo shop, window tint, etc.)

Shop-around for financing: Interest rates vary. You might also consider alternative financing.

Leasing a property. Points to look out for include: break clauses, which give you the option of leaving the premises before the end of the lease; that the responsibility for maintenance and repair of the building is clearly defined; and that the terms for rent increases are laid out in the contract.

Buying a property should be seen as an option for the future.

Purchase adequate insurance: This includes full coverage on customer vehicles in the shop, and off the premises during pick-up and delivery.

Invest in a good phone system: If you cannot be reached directly, you should be able to return a customer's call within 15 minutes.

Set-up a credit card accounts for business purchases: Some suppliers do not offer credit terms or C.O.D.

Set-up credit card accounts for retail sales: Electronic credit card machines offer financial safeguards and convenience for your customers.

Investigate state and city tax laws: Some require sales tax on services.

Get equipped

The final step is to find the right equipment and software for your needs and to stock up with stationery and other office goods. You'll also need to find yourself legal, tax and accounting advisers.

Cash Flow

Cash (Liquid Assets)- cash available or income from the business

Credit- extended by supply vendors; to maintain a good trade credit ensures bills are met on time.

Inventory- cash disbursements (supplies in stock) this will be your biggest monetary outlay

Debt- bank overdraft or business loans must be repaid in a timely manner to ensure a good standing with your bank when it comes time to expand your business

Expenses- business rent, utilities (telephone, electricity, water, and etc) Insurance, Taxes, salaries, monies must be available to meet these expenses, plus state and local taxes, accountant and attorney fees.

Bookkeeping- always keep accurate records of all your business transactions, these are very necessary for the day-to-day running of the business, plus you’ll always be aware of you liabilities for sales tax and etc.

Summary

Professional detailing can be a great business opportunity, but like any other business, it requires very careful planning and execution. Work smart, take the time to study and understand your market and build a business strategy around it. Once you’ve established your business plan, all it takes to execute it is hard work.

Recommended Software

Service CEO - ServiceCEO Auto Detailing Software

Quicken Quick Books - Accounting Software - QuickBooks

Executive Coaching and Business Coaching

Martin Brossman is a personal coach operating in the Raleigh, Durham and the Washington DC Area's. Client referrals have extended his practice nationally and internationally. Coaching areas include, personal coaching, executive coaching and business coaching.

Information resource

“Automotive Detailing Inside & Out, A Knowledge Base for the Perfectionist"– by Jon Miller

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