Things to consider before starting a business

Starting your own business, buying a franchise or forming a nonprofit are challenging tasks.

No matter the endeavor, it's crucial to take some time to prepare and evaluate your goals.

Here are a few things to consider:

Starting your own business

• Not surprisingly, a major factor is money, which can be tough to get in this economy.

"[People] should not expect to receive grants, free money or easy financing," said William Vehrs, communications manager for the Virginia Department of Business Assistance. "It's just not out there.

"For the most part, individuals starting their own businesses will have to rely on their own resources or those of their family."

The Small Business Administration has a number of programs available, though they guarantee loans, not provide them. Many, however, are now fee-free thanks to the American Recovery and Reinvestment Act.

• Try the minimalist approach.

Don't buy tons of equipment or products before you have customers. Do it part time at first.

"Don't give up your day job," Vehrs said. "Start on a small scale, and build your business from the bottom up."

Ease the risks of your business, and get the proper insurance coverage or other protections.

Buying a franchise

• Do your due diligence. Find out about startup fees, talk with other owners of the same franchise, and make sure the business plan is viable, Vehrs said.

• Do you have adequate support? What kind of assistance do you get from the company? Does it cover licensing fees or other costs?

• Location, location, location. It's key to locate your business in a prime spot. Check demographics and other community features that could affect business. Also find out where other franchises of the same kind are or if any may invade your area in the future.

"You need to understand how much territorial protection you have," Vehrs said.

Forming a nonprofit

• Is the business plan solid? A calling is a great thing, but that doesn't always translate into success. Make sure there is a need for the service you want to provide and that it's not being duplicated.

• Know the rules. Check out what kind of federal and state regulations may apply. The federal government grants nonprofit status, but states can authorize tax-exempt status. In Virginia, the Department of Taxation grants that exemption, Vehrs said.

• Consider grants and your ability to write requests. "Grant-writing is an important skill because nonprofits can get grants much more so than businesses," Vehrs said.

For any of these, one thing is certain. It will require a lot of time and focus, so you should make sure you won't be miserable. "You want to choose something you are passionate about, enjoy doing and care about," Vehrs said.

Contact Emily C. Dooley at (804) 649-6016 or .