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Top Questions for Successful Businesses

The Top Questions for Successful Businesses in this section are some that are asked most often by potential entrepreneurs. The Mississippi Development Authority has attempted to answer these important questions you need answered before you go into business. However, you should consider each question and answer carefully and do not hesitate contacting the Mississippi Development Authority or its regional offices before going into business.


I’m confused. Where should I start?
While starting a new venture can be intimidating, there is help. There are many good resources in Mississippi. However, a good place to start is the Mississippi Development Authority (MDA). Our professional team has worked with hundreds of Mississippi businesses and we are here to assist you too, at no charge. Simply call 601-359-3593 or email us at tec@mississippi.org, or visit our website at www.mississippi.org/tec.


Should I go into business?
Only you can answer this question, but you should begin the process with an honest, objective appraisal of your own strengths and weaknesses. Are you a self starter? Do you make decisions well? Do you have what it takes to operate a business? Are you willing to give up other opportunities in order to be a business owner? These are just a few of the questions you will need to consider before starting a new venture.


What type of business should I go into?
What do you like to do? What are your talents? What type of business does your area need? How much money do you have to put into your project? Answers to these questions will give a strong indication of what business(es) you should consider.


Do I need a business plan?
YES! There are two basic reasons for preparing a business plan. First, it requires the entrepreneur to thoroughly investigate the factors that will have an impact on the success of the business. Second, it will enhance the ability of the entrepreneur to secure financing by providing an organized overview of the venture for lenders and investors. Refer to the Business Launchpoint.
 

 
Do I have to incorporate before I start my business?
No. The legal structure of your business can be a sole proprietorship, partnership, corporation, or LLC. Contact an attorney or the Secretary of State’s Office (Business Services Division) at (601) 359-1350 or www.sos.state.ms.us.


If I do want to incorporate, how do I go about getting the forms?
Your attorney should be able to help you, or you can order the forms from the Secretary of State’s Office (Business Services Division) at (601) 359-1350 or www.sos.state.ms.us.


At what point do I need to involve an attorney and/or accountant in my business?
At the very beginning! Many small business owners consider legal and accounting services only when their firms are in trouble. They fail to realize that legal and accounting problems can be reduced or avoided by a program of consultation which is carried out on a continuing basis.


How do I find a good attorney or CPA?
Ask for referrals from friends or associates who are currently in business. Meet with the attorney or CPA first to see what services they can offer you and to determine if you are compatible. Generally, initial meetings are at no charge to you, but be sure this is understood before you meet. Contact the Mississippi Bar at 601-948-4471 or www.msbar.org for public resources on choosing an attorney. Contact the Mississippi State Board of Public Accountancy at 601-354-7320 or www.msbpa.state.ms.us.


What local permits do I need to go into business?
Permit and zoning requirements vary from location to location. Check with your City Hall to see which requirements apply to you.


What if my business is in the county and not in a town?
The County Courthouse will be able to give you the county requirements for doing business.


How do I get a tax number for my business?
Contact the Mississippi State Tax Commission at (601) 923-7000 or www.mstc.state.ms.us and the Internal Revenue Service at 1-800-829-1040 or www.irs.gov.


Do I have to collect sales tax?
Yes, if you are a retailer. If you are not a retailer, the Mississippi State Tax Commission will give you the requirements for all other types of businesses. NOTE: See #10 above for information on how to contact the Mississippi State Tax Commission.


How do I get a loan for my business?
The first step is to develop a business plan. The cash flow projection will indicate the amount of money you will need for working capital. Meet with your local banker and discuss the bank’s requirements along with your business plan. If the bank turns your loan down, ask about other options such as guaranteed loans from the Small Business Administration (SBA) or the Mississippi Development Authority (MDA). Other options may include loans available through your local planning and development district.


Can I get 100% financing for my business?
No. Your banker and the SBA expect you to contribute some equity. As a general rule, they will expect you to put down 25 to 30 percent of the total project cost.


Where can I get information on a specific type of business?
Business information constantly changes. Begin the process by talking with your local economic development office, chamber of commerce, Mississippi Main Street, library, community college, university, business support organization, or the Internet. Trade association publications and journals such as RMA ANNUAL STATEMENT STUDIES published by Robert Morris Associates and the RAB (RADIO ADVERTISING BUREAU) INSTANT BACKGROUND are often good sources of general information on many business types.


How do I find the best location for my business? What should I look for in selecting it?
The following are some items to consider:

    1.) Location of your customers

    2.) Location of your competitors

    3.) Other businesses in the area that complement your business

    4.) Freight and shipping costs of your suppliers

    5.) The labor market


How do I find my market? How big should it be? Who do I target for my customer(s)? How do I define my market population?
For most businesses, determining the correct “target market” and finding a way to reach that market will be the most important aspect of determining the success of your business. As a business owner, you must understand that no business will reach the entire market population. Therefore, it is essential that you find your “market niche”, the target group of customers that will both want and be able to purchase your product (s)/service(s).

Consider a market with which you are familiar. You may wish to consider a geographic location close by that allows you to monitor progress. Research your market to see which market segment you want to seek, and how much of that target market you can afford to tackle at one time. Contact your local economic development office, chamber of commerce, Mississippi Main Street, library, community college, university, business support organization, or the Internet.


Do I really have to spend money on advertising; and, if so, how do I decide how much to spend and what media to use?
YES! As part of your overall marketing program you will need to both reach potential new customers and remind current customers of your presence in business. To get started, look at what media your competition uses and consider how it is beneficial to them. Remember that the key to advertising is to find your target customer. Every media type has it advantages and disadvantages. Research the type of media and determine if it is best for your type of business.

Look to industry associations and publications for information on what the general budget for advertising is within the industry. Contact your local economic development office, chamber of commerce, Mississippi Main Street, library, community college, university, business support organization, or the Internet.


If I’m just beginning in business, how can I estimate revenues and expenditures two years into the future?
To determine your starting point, figure how much of your market you can capture initially, and investigate your start-up expenses, as well as your monthly expenses. From these figures, a cash flow analysis can be formulated.


How do I figure out what to charge for my product or service? Is there a formula that I should use?
It is not necessarily a question of how much you CAN charge but of how much you MUST charge. Determine what it will cost to operate your business and produce your product. This will tell you what your minimum price must be. Then decide if that price is competitive.


Find counseling and other services by using the Mississippi Entrepreneur Resources NetWorks dirrectory which will link you to the right resource.

Great Advice for Start-Ups

Clinton entrepreneur Greg Cronin, the inventor of LockerBones, offers sage advice to aspiring Mississippi entrepreneurs:

  • “Keep your day job and work on your business at night. You can’t become an entrepreneur if you’re broke.”
  • “Every idea is full of obstacles. Set out to overcome those obstacles beforehand. If you can’t problem-solve, you won’t make it.”
  • “Listen to people. Talk to as many people as you can about your product or your business.”
  • “Work hard and be patient. I designed the LockerBones system in two hours but it’s been a five-year process to become successful.”

    http://www.lockerbones.com

Necessity-Driven Entrepreneurship

Focus, Flexibility and Market Validation

Definition of Entrepreneurship