Small Business Startup
Gathering the Needed Resources

(Date posted: February 23, 2009)

During this step, you gather the resources needed for your small business startup. These resources refer mainly to cash. But they may also include furnishings, equipment, supplies, loan agreements, and a personal commitment.

Before starting this step, you should have:

  • Listed the startup requirements
  • Planned the costs and expenses/li>

Previous steps show you how to do this.

The desired result of this step is to gather and/or allocate cash and other resources to your small business startup.

You will use the following topics to complete this step:

Guidelines
Procedures
Example
Go or no-go decision

You will be using these resources in the next step to help set up a home office. You may also be using these resources in other future steps to prepare for the initial business operations.


IMPORTANT

Before using this information to start a business be sure to read the following notice: Disclaimer

Guidelines

You will be following your previous decisions about the resources needed to start business operations. However, I want to give you this advice. I recommend that you start out small, become successful, and then expand.

This decreases the effort, risk, resources, and skills required. If you fail, you will have only a small loss.

If you try to start out at a higher level of operations, this increases the effort, risk, resources, and skills required. If you fail, you will have a larger loss.

Also, if you try for this higher-level of operations you may have to wait until you have gathered sufficient cash or other resources. If you delay too long, you may decide not to try starting a business.

Let's say you can't gather all the resources needed. I suggest that you reduce the level of your expected business operations, instead of waiting to start your business.

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Procedures

NOTE: If you are developing a low-cost, low-risk type of business, review the Bootstrap Methods page in another section for ways to save on cash.

Review the resources needed

During the Listing the Startup Requirements step, you decided what furniture, storage units, office equipment, office supplies, computer equipment, computer programs, and computer supplies you assumed would be required for the home office. At that time, you were not particularly concerned about the cost of these items.

During the Planning Costs and Expenses step, you estimated the startup costs for your small business venture. This cost was limited by the need to maintain a low break-even point. These startup costs included such things as business license, initial office supplies, insurance, and the cost of various furniture and equipment for the home office.

You can use the information from these two prior steps to keep track of the cash and other resources needed for your small business startup. Thus as you gather items of furniture and equipment you can check these off from the list of startup requirements. As you raise money and spend it, you can compare this balance with the startup costs remaining to be paid. This will tell you how much cash is still needed.

During this step, you will gather the resources needed to satisfy these adjusted startup costs. You can help satisfy these needs by allocating some of your existing assets to the home office. You may be willing to invest some of your own money in the startup. You may be able to make bargain purchases for some of the items needed. Then, you will have to raise any cash still needed.

Allocate your existing assets

You may have some assets that can be used in your home office. These could be furniture, storage units, office equipment, office supplies, computer equipment, computer programs, and computer supplies. As you allocate them to your home office, check them off from your list of startup requirements.

Invest your own money

You may have to commit your own money to pay for some or all of the remaining startup costs. Decide how much you can afford to invest. Hopefully you have limited your startup costs sufficiently so this investment need not be a large amount.

You also may have to invest your own money to pay expenses of this business until it becomes self-sustaining.

Try for bargain purchases

You may be able to make some bargain purchases of any furniture or equipment still needed for your home office. You could visit yard sales, secondhand stores, unfinished furniture stores, estate sales, and liquidation auctions.

Raise any cash still needed

If you don't have enough cash left to pay for the remaining startup costs, you will have to raise this cash. Here are some ways to get cash for your business startup:

  • Use one or more of the ideas linked from the Earn Extra Cash section.
  • Use one or more ideas linked from the Reduce Living Expenses section.
  • Take in a partner for your small business venture. This would be some capable person who shares your same attitudes and beliefs about how to run the business.
  • Take out a personal loan. This could be a cash advance from a credit card or personal line of credit. (However, I don't recommend getting a loan unless you will be able to start business operations within a month or two.)

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Example

I have used my own small business startup for this example.

Since my home office was set up before I started doing this website, this example will be rather simple. However I will add some explanations to this example.

Review the resources needed

Following is the Resources needed item from the Example topic of the Listing the Startup Requirements step.

  • Resources needed to finance my small business startup: Cash of $250, my existing home office and computer setup, and my past writings on small business operations.

Following is the Startup costs category from the Example topic of the Planning Costs and Expenses step.

Description

First Try

Second Try

Startup costs    
  Business license & insurance      130    130
  Initial advertising      100    100
  Initial office supplies       20      20
   

Startup costs      250    250

Allocate my existing assets

I have allocated my existing home office and computer setup, and my past writings on small business operations to this small business startup.

Invest my own money

I will invest my own money as needed to support this small business startup until it becomes self-sustaining.

Try for bargain purchases

I had no need to try for bargain purchases. (However, my desk was built several years ago using unfinished furniture and a slab door.)

Raise any cash still needed

I have raised the $250 cash needed to pay for the remaining startup costs.

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Go or no-go decision

This decision concerns the resources you gathered in this step.

Go on to the Setting up a Home Office step in your small business startup if you can answer "yes" to the following questions:

  • Have you gathered as much furniture, equipment, and other resources as you are able?
  • Are you willing to carry through with any personal investment, moneymaking activities, or loan applications to raise any cash still needed?

If you have answered "no" to any of the above questions, go to this topic on another page to see what to do next.

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