Small Business Investing in an Uncertain Economy

The Small Business Investment

By Ron Peltier

Millions of Americans invest in a variety of ways: mutual funds, stocks, bonds, real estate, savings accounts, etc. The reality is that small business is also an investment — perhaps the best one out there. Small business can provide an awesome return on your investment and provide you with equity. The crucial difference is that in other areas of investments, you are left to the vagaries of the market with little to no influence regarding investment. That is not the case in small business. Your investment in small business provides the opportunity to have a direct impact on its success. What’s better than that?

So now you are convinced that starting your small business is your goal. Where do you go from there? It’s not like you simply fill out a form and magically a small business appears. Here, it would be prudent to consider a few things. Look at this checklist and make some decisions about where you fit.

Small Business Starter’s Checklist:

  • What type of small business are you interested in — a job or hands off
  • Be sure to Know Thy Self
  • Review the literature — research, read, understand
  • Identify an industry — will you provide a service or a product, for example
  • Identify professionals who can help you — business brokers, accounts, etc.

Finding your niche

Small Business can be hands on or hands off.  You can get up and go to work at the same time everyday like any other job — the main difference is that your hard work and energy directly improves your small business and your finances.  This is not the case when you work for the “man.” For example, take the story of Mr. Jones.  Mr. Jones worked for 20 years at a major corporation making a decent living.  But he was not happy; he hated working for someone else, making him rich.  So one day, he decided to go into business for himself delivering ice.  His small business required him to deliver ice to various stores and gas stations every day — but he loved it.  To him, it didn’t feel like a job.

Small business can also be more hands off.  However, before we go further, you should understand that whenever you began a small business, there will be lots of hard work. You will need to roll up your sleeves and get involved—at least initially. With the right planning and decision-making, however, you can step back from the small business and reap the profits.  And when you achieve this goal, then you can move into being a venture capitalist.  More on that later.

Know thy Self

The famous philosopher Socrates invited us to “Know thy self.”  This is true with small business.  An honest evaluation of yourself will be a major component to the success of your small business.  Indeed, a successful small business often involves partnerships.  Suppose you have a great idea of a new low-carb restaurant because you have experimented in the kitchen and have come up with some delicious dishes.  In other words, you know how to cook and love to cook.  However, cooking the food is just one aspect of running a restaurant.  In fact, you may have the best tasting food this side of the Mississippi River, but if no one knows about it or your service is terrible, that won’t matter. You have to know how to order the food, find and train employees, deal with vendors, market it, etc.

On the other hand, if you know that you are a behind-the-scenes type of person (managing the books, ordering supplies), you should consider working with someone who can handle the customers, for example.  Poor service can be the death knell of your business, that’s for sure.

The successful small business needs to manage all aspects of its operations.  Great customer service, going the extra mile is all well and good, but can become a problem for your business without some fiduciary prudence.

Review the literature

Books: You should review all the literature you can find on small businesses.  Go to you local library and check out every book on small businesses. You can never have enough information.  The more you know, the better.

Internet: The Internet is also an outstanding source of information.  For example, a Google search on small business ownership generated 6,290,000 hits in less than one second.  However, there are some staple, starter sites that should be reviewed.

Chamber of Commerce: Visit your local Chamber of Commerce.  You will be able to ascertain information on Small Business ownership as well as find demographic information on your community.  Also, many offer seminars on small business for reasonable rates.

Seminars: Seminars are an excellent source of information. As was aforementioned, finding seminars in you area takes nothing more than a trip to your local Chamber of Commerce.  Later we’ll talk about what things a good small business seminar should contain.

Business Brokers:  Business Brokers can be an invaluable resource for you as you look into buying or starting a small business.  Once again, a query on the Internet provided 922,00 hits in less than a second. We’ll also talk about how to identify a good broker.  (not here, has a small business section)

Partnerships—discuss this idea

Restaurants—catch 22—if you’ve owned

Character 2 founders—cousins did not do so well; they sold it. The wife wanted to run the business—a technician—knew how to cook, but had a nervous breakdown.

Sold to Neil—who changed a concept to a sports bar

Owner’s Checklist for Starting a New Business

Background work

  • assess your strengths and weaknesses
  • establish business and personal goals
  • assess your financial resources
  • identify the financial risks
  • determine the start-up costs
  • decide on your business location
  • do market research
  • identify your customers
  • identify your competitors
  • develop a marketing plan


Business transactions:

  • select a lawyer
  • choose a form of organization (proprietorship, partnership, or corporation, for example)
  • create your business (register your name, incorporate the business, etc.)
  • select an accountant
  • prepare a business plan
  • select a banker
  • set up a business checking account
  • apply for business loans (if applicable)
  • establish a line of credit
  • select an insurance agent
  • obtain business insurance


First steps:

  • get business cards
  • review local business codes
  • obtain a lease
  • line up suppliers (if applicable)
  • get furniture and equipment
  • obtain a business license or permit (if applicable)
  • get a federal employer identification number (if applicable)
  • get a state employer Id. number (if applicable)
  • send for federal and state tax forms
  • join a professional organization
  • set a starting date


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