Market research is a crucial step. Before setting up shop, an entrepreneur needs to determine if there is a need for the business. Where do you want to locate your business? Who are the competitors? What is the population? “Your customers just can’t be your family and friends,” Hughes said.
Financing is an obvious key issue to small business owners. And often the hardest, Hughes said. She suggests that, in addition to determining obvious costs such as inventory, equipment, advertising, rent and materials, entrepreneurs need to also look at hidden costs. Don’t forget about basic services such as garbage and water.
After gathering the numbers, it is easier to determine break-even costs. If the business owner knows how much money is needed per month, the number of sales or services provided can be determined.