Having been a small business consultant for quite some time, I've come across a huge selection of individuals starting out independently with the imagine employing a particular trade or knowledge to create their own business. Many of these individuals have impressed me making use of their genuine passion to achieve success, but have lacked the simple business theory had a need to become successful. Below I have listed 5 tips to planning a small business, such as expectations, timing, capital, knowledge and risk/rewards.Expectations:When opening your small business it is critical to first set up a realistic revenue goal and divide that goal by 3. For example, if you're opening up a restaurant and expect sales to begin at $24,000 monthly, count on $8000. The main mistake I've encountered with new businesses is really a gross exaggeration of how much revenue a fresh business will bring in its first few months of business. This is due to businesses estimating their revenue predicated on other comparable firms operating in your community at that time. As you may have guessed, an estimation of this sort fails to take into account the nice will and established clientele those firms are suffering from over many years.Don't get caught up in the hype. I cannot tell you how many times I've had a glass or two with a new business proprietor and have paid attention to discussions of opening up their first store, but then quickly growing into multi-store chain. Before you can grow, you must first succeed. I'm not saying to curb your dreams, but keep focused on your first store or business!Remember that in nearly every business you obtain into, there will be competition. These competitors, just like you, want to gain market share and lure customer's money into their pocket as opposed to yours. Even if there is very little competition when you start, be aware firms will enter the marketplace eventually and steal business whether it's perceived money can be made. Research how you will sustain your competitive advantages because the bits of the pie get smaller.In the current overall economy facing our country, be certain you have the ability to gather enough cash flow away from your competitors to satisfy your basic financial needs. This boils down to how much research you did in your market and how strong your business model is. Again do not get swept up in the hype to become rich, but rather spend time more wisely planning not to fail. Remember most businesses are out of business within 3 years.Just to illustrate, if your truly want to become successful spend just as much time as possible researching and better understating the way you plan to get someone's dollar in your pocket. Plan to succeed, but review every scenario and establish answers to ways you could possibly fail. Keep focused!Timing:Timing is everything when opening a fresh business. Industries which were hot over the past 5 years could grow cold for another 5. Having an economy going for a recessionary track with out a clear end in sight, analyze if your product or service is a need or a want. If times are tough families may rent a movie rather than going to the theater, cook at home rather than venturing out to a restaurant and so forth. Is the market you're entering saturated with businesses left over from the booming market making profit opportunities extremely difficult? By researching trade magazines, which are available for most industries, you can get out very quickly what the current trends are and how healthy it is. A fascinating characteristic of timing can be your business may have succeeded better 2 years before you plan to start or perhaps 2 years into the future. Be cautious with your new business as you will find a time and place for everything.Capital:Another pitfall and the kiss of death for most companies is not having the capital resources to survive. Believing that your company can be profitable within the initial 6 months is frequently not realized. With any home based business, you must gain market share from your own competition and that takes time and money. Making only a few mistakes with your business design or research data can make a catastrophic chain reaction if not anticipated and accounted for.Give yourself at the very least per year of resources to make it through the mistakes and learning curves you will come across, which includes enough money to cover your fixed cost just like you earned no income from the business enterprise at all. That is a very vague rule and often involves a large amount of cash, but you get the idea as you will need time to maneuver. As the saying goes if you ever want to see time fly, sign a retail location lease. The first of the month seems to creep up every other day.Knowledge:Are you knowledgeable about the business you're starting? I always recommend that you been employed by in the industry you are getting into for at the very least 5 years and are fully competent in the major areas of that sector. Getting into a specific business sector your not familiar with is often a path for destruction. Again there is no substitute to value of time and experience gained through hands on application.Given that you're knowledgeable, do you know how to manage yourself among others? Do you know how to sell? These are other issues that come up as your projects environment and ability to persuade others to execute your vision is vital to success.Risks and Reward:A question to consider when contemplating a new business is the reason why you're doing it. Checking a new business not only requires capital, but additionally requires huge amounts of hard work on your part. You shouldn't be surprised if you're required to work over 70 hours weekly for an indefinite period of time before you can take a break. What's the earnings potential of one's business? As opposed to spending 1000's of dollars and hours you will ever have developing a new business that may ultimately fail, how much can you earn doing work for an established business by means of salary or commission? I've seen many business owners work 7 days a week making less overall than they could doing work for a far more established company. Of course you may grow your business over time right into a large more profitable company, but at what cost to friends and family, family & most importantly your own sanity. Remember the rewards of an effective business can provide your loved ones with unimaginable riches, but these success stories are few in number.Conclusion:The purpose of this short article isn't to scare anyone from fulfilling their dreams of running a small business, but to include some insight into the pitfalls that occur frequently with new start ups. For me one of the greatest feelings on earth is running a successful business that grows as time passes and allows you the flexibility and financial freedom to call your personal shots. I am hoping by reading this you might add these suggestions to more information on ingredients to opening your own successful small business!Author Mark Sanders continues to consult small businesses on ways to enhance their business model and efficiency. Mark can be part owner of Levita Fashion Jewelry, a new make of jewelry distributed nationwide and operating in Tamarac, FL. You might reach Mark Sanders with questions or comments at sales@levitaonline.com or the comment box of his website