InfoPEI

 Analyze the Business's Potential

• Define exactly what business you are in.
• What does your product or service do for your customers?
• What doesn't it do?
• What distinguishes your product from others?
• What should it do later, but doesn't now?
• Should product parts be manufactured or purchased?

• What do you buy? What do you sell?
• Is there evidence of a need for the product or service?
• What comprises the market (age, income, geographical area, sex, occupation, etc.)?
• What are target consumers' buying habits?

• How will the product or service reach its market?
• How will the product or raw materials reach you?
• Who are your suppliers?
• What trade and credit terms?
• How long does it take to receive orders?

• Who and where are they?
• How does your product or service measure up (higher quality, lower cost)?
• What sets you apart from the competition?

• How much is the down payment on purchase or deposit on lease?
• Necessary fixtures or remodeling cost?
• Cost of purchase or lease of equipment?
• Cost of initial inventory?
• Utility deposits and installation fees?
• Operating supplies cost?
• Cost of taxes, permits, and licenses?
• Cost of professional services (attorney, accountant, etc.)?
• Advertising and promotion costs for opening?
• Start-up employee salaries?

• Do you know how to determine what price you will charge?
• What is your monthly sales volume?
• What is expected rate of increasing sales?
• What is cost of sales (merchandise, freight, labor, etc.)?
• What are monthly fixed costs (rent, utilities, insurance, etc.)?
• What are monthly variable costs?
• What are monthly net profits?
• How will you pay yourself before your business starts to make a profit?
• What information is the basis for your projections?
• Are they realistic?
• How will you handle cash flow problems if sales don't cover expenses?

• Proprietorship, partnership, corporation or a hybrid form?
• How much money do you need and where will it come from?
• How is the initial money to be used?
• What skills can you provide, and what other skills are needed?
• How much control will you have over the business?
• How will the business be taxed?
• To what extent will you be personally responsible for debts or claims against the business?
• What will happen to the business you are incapacitated?

• Do you need to hire someone help you?
• Do you know how to find someone (employment service? ads? schools?)?
• What duties and responsibilities will they have?
• What skills, experience, characteristics should they have?
• Do your wages meet the local rate for similar work, and will they competent employees?
• What training will you need to do?
• Do you have a training plan and written procedures?
• What rules do you need, and do you have written copy for each employee?
• Are you familiar with the federal and state regulations on minimum wages, overtime, child labor or other employment conditions?
• Have you met all the requirements for payroll taxes, workers' compensation, unemployment compensation?
• Are you aware of employee relations laws?
• Do you have all employer posters required for display (minimum wage equal opportunity, etc.)?

• Federal and state income taxes?
• What is the investment tax credit?
• How and when do you file?
• What employment taxes are involved?
• What about unemployment taxes?
• What about excise taxes, sales and use taxes, property taxes and inventory taxes?
• What about impact fees?

• What federal regulations apply?
• Corporation filing requirements?
• State, county and city licenses?
• What zoning laws, building codes and health, fire and police standards apply?
• What are the norms of the community?

• What net income per year do you expect to get from your business? Can you live on this?
• How much can you put back in the business to help it grow?
• Do you need additional capital? For what? When? From whom?
• How and to whom do you apply for a business loan?
• What about government loans?
• How will you handle cash flow problems if sales don't cover expenses, or accounts receivable are late?
• Do you have a system designed to set aside funds for meeting tax payments (sales, income, unemployment compensation or other required tax remittances)?

• Does your product or service require specific location needs?
• Does proximity to suppliers or customers play an important role?
• What about transportation, labor supply, utility costs, state and local taxes and regulations?
• Do traffic count, parking facilities, and other business establishments play an important part in location?
• Will zoning requirements permit you to base your business in your home?

• Should you lease or buy your facilities?
• How is rent determined (flat rate, percent of sales)?
• Is rent high or low in relation to the area and facilities being rented?
• Who owns improvements that the tenant makes?
• How much insurance does the landlord hold, and does the landlord require the tenant to have certain coverage?
• What are the lease renewal provisions?
• Does the tenant have the right to sublet?
• Are there any options for expansion?
• Are there required operating hours?
• Can you negotiate terms of lease?
• Is it zoned for your type of business?

• What kind of property insurance is needed (fire, extended coverage, burglary, robbery, business interruptions)?
• What kind of casualty insurance (liability, automobile)?
• What about life insurance (sole proprietorship, partnership or corporation, key man, workers' compensation)?
• Do you need fidelity or surety bonding?
• Do you need fringe benefit insurance for your employees?

• What records do you need (payroll, taxes, sales, inventory)?
• What financial statements do you need and at what intervals? Do you know how to use these statements?
• What kind of record-keeping system will you use?
• What services do you need from an accountant? How do you select one?

• How will you provide visibility for your products, services, and business?
• What image do you want for your business?
• How will you identify your business site?
• Who is your market, and what medium or media will reach the market?
• How often do you advertise, and how much shall be spent?
• What message should reach your potential customers?
• What advantages would a web site offer your business or product?