2. Start-Up Phase

Now you have finished your business plan, crossed the starting line, and are working to put your plan into action. Your life becomes extremely busy, especially if you are starting the business while you are still in school.

At this phase, it will be important to keep operational costs as low as possible. As you have seen in previous lessons, many young entrepreneurs convert the garage, a corner of their bedroom, or the kitchen table into an office. Meetings often take place at the nearest Starbucks or the customer’s place of business.

One of the major goals during start-up phase is to reach the break-even point where sales revenue covers all the expenses. In most cases, the owner doesn’t take a salary, but invests all of the revenues back into the business. Cash flow is often sporadic, so you have to watch all expenditures carefully and plan major purchases well in advance.

Tasks you need to accomplish in start-up phase include:

• Refining/perfecting your product(s) and/or services
• Development of your initial staff
• Establishing operational and manufacturing procedures
• More in-depth understanding of the market
• Up-graded business plan with future additional financing in mind

This is where the “rubber hits the road.” You are testing your business concept now with real customers and real money at stake, and you are looking to move the business into a position of growth.