SCORE

Original Date Posted: Apr 02, 2012
By: Susan Lane

Before anyone starts a business or buys an existing business certain rules should be followed. For those of you who are sports fans, you know there would be no games without rules and the same is for business. There must be a plan of action stating what the goals are and how the game (business) will be played. The very first step anyone needs to take is to do a market research to see if the business you want to begin is really needed. Is your idea a new one or an old idea with a new twist? Has the idea been tried before and failed? What makes you think it will work now? What research has been done to show the business will succeed? How did you come to a conclusion that this business will support you? In plain simple words, do the work before you invest money. First, use your mind, time and energy. There are so many ways to research today, unlike twenty or thirty years ago. First of all, there are very few NEW ideas today, merely variations of old ideas so you can easily find information in books and on the internet.

The first thing you need to find is the “Standard Industry Code” for the business you are planning. This Standard Industry Code was used in the United States until 1997 when it became the “North American Industry Classification System and today a manual first printed in 2007 is available from the web site for NAICS. This manual can be downloaded or can be purchased on a CD. Every type business known has a code (number) which can give anyone the information needed about any industry on an average basis. Questions like the following can be found:

  • What are the average sales for a business?
  • What is the average profit for a business?
  • What is the average amount of employees for a business?

This research will get you started but you will need much more. Many new businesses are begun in homes today and these businesses are difficult to research but it can be done. In many cities new Home-Based Business Chambers of Commerce are being formed. Anyone thinking about a home based business would do well to join such an organization to meet and talk to the other members.