Starting a Small Business: Administration

Over the last few articles we have looked at utilising the Internet to its fullest potential in a commercial setting. As this column is dedicated to exploring issues related to the appropriate alignment of information technology to the SOHO market, and one of the chief pitfalls facing small business is the seeming lack of regard to revenue management, I thought I'd do a series on administrative systems to address this.

The Problem

So you've got a great idea for a small business and want to get started right away... you have run the idea by all your friends and they seem to think it's great... so what could possibly prevent the venture from being a success? The difficulty with many start-ups is the fact that all too often the would-be entrepreneurs concerned are great at delivering the product or service that forms the basis of their businesses, but fail to dedicate the required time and consideration to the administrative side of their concern in order that it might thrive in today's competitive marketplace.

Typically, the individual naturally drawn to self-employment is a bit of a maverick - more willing to take risks than most of his peers, an idea person... someone interested in the forest - not the trees. Unfortunately, these types of individuals are often not overly excited about occupying themselves with the pursuits of "bean counters" and also see themselves as too busy conducting business to spend much time reporting on it. The simple fact is that if your business can't be measured, it can't be managed.

The Solution

Before you even get started on your proposed venture you need a business plan. This isn't just what you want to do or how much money you want to make off the top of your head; it's a formal document that serves to identify your business objectives, over both the short and long term, and the means by which you mean to achieve them. One of the most valuable things that a proper business plan will do for you is to ascertain the appropriate level of funding required for you to truly make a go of it. Too many ventures commence operations only to find out too late that they are under-funded. This has historically denoted the untimely death of many a great business idea.

So how do you create a business plan? Many would-be small business owners haven't the foggiest notion of how to create a formal plan. Fortunately, there is help available. Palo Alto Software is the segment leader in products that specifically address this area and additionally produce revenue management and marketing plan generation software suitable for the SOHO market. One of the great things that they have done is to offer a free web based tool which generates a pared down version of a full plan in order that visiting individuals might quickly assess the potential commercial viability of an idea. This may be accessed at www.miniplan.com, which also provides links to information regarding their award winning suite of products, which may then be ordered online starting at $89.99US for the complete Business Plan Pro.

You may additionally download an evaluation copy of the software to get an in depth overview of its inherent functionality before you make a purchase decision. One thing to remember however is that a business plan is meant to be a living document - a work constantly in progress. It should be designed to be a tool by which you might compare actuals against forecasts in order to generate business performance metrics. This will enable you to potentially see danger before it arrives at your doorstep and take steps to mitigate your exposures as well as maximise your profits.

Friendly Finance

To those for whom the words "General Ledger" inspire feelings of consternation and loathing, several companies have targeted their wares, promising facile solutions to soothe the frustrations of the uninitiated, normally associated with their first exposure to esoteric accounting terminology and practices. Foremost among these firms is Intuit, the producers of the ever-popular Quicken line of software products. Having just posted third quarter results of over US $239 million, a %48 increase over the same quarter last year; Intuit is indeed the clear market leader in this lucrative segment. Over the past several years the company has touted its "Quickbooks" product as the only practical solution to easy small business financial administration.

This year, Intuit unveiled the newest member of its family: Quicken Home and Business '99. The product is a nice mix of financial management tools oriented toward those who are trying to gain control over both their home and budding small enterprise finances. I especially like it as there is a pocket version of the product which runs on the 3Com Palm Pilot and enables you to record transactions as you make them, categorise and annotate them, and then download them into the desktop version at the touch of a button - very convenient!

Next month we will do an in depth feature comparison between Quickbooks Pro '99 and Quicken Home and Business '99 as well as their arch rival: Computer Associates' Accpac Simply Accounting. Until then, be sure to visit www.entrepreneurmag.com, a great online resource for small business owners and dreamers alike!

Originally published in Ottawa Computes! magazine, July, 1999, by technology columnist, Ray Richards.

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