*This information was adapted from the U.S. Small Business Administration home page at http;//www.sba.gov/


1. Do I have what it takes to own/manage a small business?


You will be your own most important employee, so an objective appraisal of your strengths and weaknesses is essential. Some questions to ask yourself are:


Am I a self-starter?

How well do I get along with a variety of Personalities?

How good am I at making decisions?

Do I have the physical and emotional stamina to run a business?

How well do I plan and organize?

Are my attitudes and drive strong enough to maintain motivation?

How will the business affect my family?


2. What business should I choose?


Usually, the best business for you is the one in which you are most skilled and interested. As you review your options, you may wish to consult local experts and businesspersons about the growth potential of various businesses in your area. Matching your background with the local market will increase your chance of success.


3. What is a business plan and why do I need one?


A business plan precisely defines your business, identifies your goals and serves as your firm's resume. Its basic components include a current and pro forma balance sheet, an income statement and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package. Additionally, it can tell your sales personnel, suppliers and others about your operations and goals.

NOTE: We have an area devoted to helping you with your business plan.


4. Why do I need to define my business in detail?


It may seem silly to ask yourself, "What business am I really in," but some owner-managers have gone broke because they never answered that question. One watch store owner realized that most of his time was spent repairing watches while most of his money was spent selling them. He finally decided he was in the repair business and discontinued the sales operations. His profits improved dramatically.


This point is very important to Kosovo.  It seems like Kosovars would be well-served if they focused attention, prior to business startup, on a well-thought plan. 


5. What legal aspects do I need to consider?


Licenses required, zoning laws and other regulations vary from business to business and from state to state. Your local Small Business Administration (SBA) office and/or chamber of commerce will provide you with general information, but you will need to consult your attorney for advice specific to your enterprise and area. You also must decide about your form of organization (corporation, partnership or sole proprietorship) or tax status.


See UNMIK/REG/2001/6  On Business Organizations

You can choose from the following types of Business Organizations: Personal Business Enterprise, General Partnership, Limited Partnership, Corporation. 

Corporations are the most common type of business organization and this regulation outlines the process by which a corporation is created and the responsibilities of the Corporation once it is created.  The corporation standards outlined in this regulation are very similar to those described in the Delaware Business Corporations Act, but the Delaware Act is much more thorough.  More specifically, the Delaware Act includes more detailed provisions for seeking remedies, profits, change of address, details on preincorporation issues, voting, mergers and annual reporting guidelines. 


See also UNMIK/REG/2000/68 on Contracts for the Sale of Goods

The UNMIK regulation contains the spirit of the Uniform Commercial Code (UCC), specifically the Delaware code, but far less detailed and defined than that of the Uniform Commercial Code. Specifically the UCC contains 77 specific articles that describe in detail leases, trade secrets & antitrust, telemarketing fraud, electronic transactions, unfair cigarette sails, newspapers, pet warranties, and building construction payment, to name a few.  In addition the remedies section of the UCC provides a provision for alternate dispute resolution which has not completely caught on in Kosovo, but is certainly evolving.  The UNMIK regulation has a particular focus on the basic terms of the contract such as offer, acceptance and consideration, but lacks specific details beyond the formation of the contract and breech of the contract


UNMIK/REG/2000/8 On the provisional registration of businesses

Essentially this regulation requires that all businesses be registered with UNMIK before their operation will be considered legal.  This differs from the Delaware model in that this information is contained within the individual regulations that address specific business organizations like partnerships and corporations, rather than being a separate regulation. 



6. What do I need to succeed in a business?


There are four basics of success in small business:

*Sound management practices.

*Industry experience.

*Technical support.

*Planning ability.

Few people start a business with all of these bases covered. Honestly assess your own experience and skills; then look for partners or key employees to compensate for your deficiencies.


7. Would a partner(s) make it easier to be successful?


A business partner does not guarantee success. If you require additional management skills or start-up capital, engaging a partner may be your best decision. Personality and character, as well as ability to give technical or financial assistance, determine the ultimate success of a partnership.


8. How can I find qualified employees?


Choose your employees carefully. Decide before hand what you want them to do. Be specific. You may need flexible employees who can shift from task to task as required. Interview and screen applicants with care. Remember, good questions lead to good answers-the more you learn about each applicant's experience and skills, the better prepared you are to make your decision.


9. How do I set wage levels?


Wage levels are calculated using position importance and skill required as criteria. Consult your trade association and accountant to learn the most current practices, cost ratios and profit margins in your business field. While there is a minimum wage set by federal law for most jobs, the actual wage paid is entirely between you and your prospective employee.


This aspect of the business plan should be forward looking.  The entrepreneur must consider that the internationals are creating a false demand and that their numbers will diminish over time.  The profits that a business might be able to accrue by luring internationals is probably not worth the price that will be paid later when only the locals are left to buy the goods.  This complements the wage levels.  The local entrepreneur is not expected to pay wages that are competitive with the jobs the internationals can provide; however, these entrepreneurs should strive to be competitive with the internationals and not take advantage of the depressed wage situation that currently exists.  This attempt to pay higher wages will eventually lead to a higher standard of living. 


10. What other financial responsibilities do I have for employees?


You must withhold federal and state income taxes, contribute to unemployment and workers compensation systems, and match Social Security holdings. You may also wish to inquire about key employee life or disability insurance. Because laws on these matters vary from state to state, you probably should consult local information sources and/or SBA offices.


Reg/2001/27 Labor Law

This describes the age at which an individual may legally work and explains the legal requirements and ramifications in the areas of: discrimination, collective bargaining, the employment relationship, salaries and leave time.


See Also Reg/2001/35 Regarding Pensions

UNMIK/REG/2000/24 Establishes the department of labor and employment


11. What kind of security measures must I take?


Crimes ranging from armed robbery to embezzlement can destroy even the best businesses. You should install a good physical security system. Just as important, you must establish policies and safeguards to ensure awareness and honesty among your personnel. Because computer systems can be used to defraud as well as keep records, you should check into a computer security program. Consider taking seminars on how to spot and deter shoplifting and how to handle cash and merchandise; it is time and money well spent. Finally, careful screening when hiring can be your best ally against crime.


It is true that Kosovars must be careful to deter shoplifters and embezzlers.  Careful screening when hiring is good advice.  Also, the Kosovar entrepreneur should invest in the latest available internet and computer security system.  A computer in Kosovo is just as likely to be infected as one in the US.  However a security system is probably not the answer.  Presumably neighbors look out for one another.  The shopowners probably have other means of keeping the store safe besides a high tech security system. 


12. Should I hire family members to work for me?


Frequently, family members of the owner "help out in the business." For some small business owners it is a rewarding experience; for others it can cause irreparable damage. Carefully consider their loyalty and respect for you as the owner-manager. Can you keep your family and business decisions separate?


These are legitimate concerns; however, Kosovars are probably much more likely to hire family members out of necessity and are unable to turn away less desirable family members.  In addition, the family relationship structure is probably significantly different from the American structure and the Kosovar family members are probably easier to keep in line due to stronger family loyalty. 


13. Do I need a computer?


Small business today faces growing inventory requirements, increased customer expectations, rising costs and intense competition. Computers can provide information that leads to better returns on investment. At the same time, they help you cope with the many other pressures of your business. Computers are not cure alls, however, and considerable care should be given to:

(1) deciding if you need one, and

(2) selecting the best system (or personal computer) for your business.



14. What about telecommunications?


All small businesses share some common functions: sales, purchasing, financing, operations and administration. Depending on your individual business, telecommunications can support your objectives in any or all of these areas. In its basic form, the telephone (the terminal) and the network (local or long distance) make up the basic components of telecommunications. It is an effective tool that can easily change with seasonality and growth. How you use telecommunications can affect how efficiently and profitably your company grows in the future.


Absolutely!  In Kosovo the entrepreneur must be forward looking.  The telecommunications network seems stable but the entrepreneur must consider how he will change with a changing marketplace.  The goal is to improve the local economy and each businessperson must act accordingly.  The entrepreneur should be sure to incorporate or plan to incorporate a phone, fax, computer modem and the necessary equipment for credit card payment.  All of this equipment may not be needed presently, but the idea should be to plan for the day when the business can handle it.  Design every aspect of the business plan so that adaptation to current global technology will be an easy transition when the time comes.  


For an idea of how much this will cost: An office in Dragodan, Pristina with 10 employees pays the following per month:

Phone and fax line: 1500-2700 € 

Internet 128 Kbps: 700 € 

Water: 50-70 € 

Electricity: 150-250 € 

Central heating: 7000-8000 €  (per year)

Cost of mid-range generator: 5000 € 

Diesel and generator maintenance: 600 €  (per month)


15. How much money do I need to get started?


Once you have taken care of your building and equipment needs you also must have enough money on hand to cover operating expenses for at least a year. These expenses include your salary as the owner and money to repay your loans. One of the leading causes of business failure is insufficient start-up capital. Consequently, you should work closely with your accountant to estimate your cash flow needs.


16. What are the alternatives in financing a business?


Committing your own funds is often the first financing step. It is certainly the best indicator of how serious you are about your business. Risking your own money gives confidence for others to invest in your business. You may want to consider a partner for additional financing. Banks are an obvious source of funds. Other loan sources include commercial finance companies, venture capital firms, local development companies and life insurance companies. Trade credit, selling stock and equipment leasing offer alternatives to borrowing. Leasing, for example, can be an advantage because it does not tie up your cash. Ask your local SBA office for information about these various sources.


Kosovars should look to the local community for financial support.  The Diaspora is another good source, as well as grants from international development organizations. 


17. What do I have to do to get a loan?


Initially, the lender will ask three questions:

*How will you use the loan? *How much do you need to borrow? *How will you repay the loan?

When you apply for the loan, you must provide projected financial statements and a cohesive, clear business plan which supplies the name of the firm, location, production facilities, legal structure and business goals. A clear description of your experience and management capabilities, as well as the expertise of other key personnel, will also be needed.


This is probably tough for the local Kosovar.  Kosovars typically have no credit history and the banks in Kosovo probably have limited funds but that is changing and will continue to improve.


18. What kind of profits can I expect?


Not an easy question. However, there are standards of comparison called "industry ratios" which can help you estimate your profits. Return on Investment (ROI), for example, estimates the amount of profit gained on a given number of dollars invested in the business. These ratios are broken down by Standard Industrial Classification (SIC) code and size, so you can look up your type of business to see what the industry averages are


19. What should I know about accounting and bookkeeping?


The importance of keeping adequate records cannot be stressed too much. Without records, you cannot see how well your business is doing and where it is going. At a minimum, records are needed to substantiate:

1. Your tax returns under Federal and State laws, including income tax and Social Security laws;

2. Your request for credit from vendors or a loan from a bank;

3. Your claims about the business, should you wish to sell it.

But most important, you need them to run your business successfully and to increase your profits.


20. How do I set up the right record keeping system for my business?


The kind of records and how many you need depend on your particular operation. The SBA's resources and an accountant can provide you with many options. When deciding what is and is not necessary, keep in mind the following questions:


1. How will this record be used?

2. How important is this information likely to be?

3. Is the information available elsewhere in an equally accessible form?

21. What financial statements will I need?

You should prepare and understand two basic financial statements:

(1) the balance sheet, which is a record of assets, liabilities and capital; and

(2) the income (profit.and-loss) statement, a summary of your earnings and expenses over a given period of time.


22. What does marketing involve?


Marketing is your most important organizing tool. There are four basic aspects of marketing, often called the "four P's":

*Product: The item or service you sell.

*Price: The amount you charge for your product or service.

*Promote: The ways you inform your market as to who, what and where you are.

*Provide: The channels you use to take the product to the customer.

As you can see, marketing encompasses much more than just advertising or selling. For example, a major part of marketing involves researching your customers: What do they want? What can they afford? What do they think? Your understanding and application of the answers to such questions play a major role in the success or failure of your business.


23. What is my market potential?


The principles of determining market share and market potential are the same for all geographic areas. First determine a customer profile (who) and the geographic size of the market (how many). This is the general market potential. Knowing the number and strength of your competitors (and then estimating the share of business you will take from them) will give you the market potential specific to your enterprise.


24. What about advertising?


Your business growth will be influenced by how well you plan and execute an advertising program. Because it is one of the main creators of your business' image, it must be well planned and well-budgeted. Contact local advertising agencies or a local SBA office to assist you in devising an effective advertising strategy.


25. How do I set price levels?


The price of a service or item is based on three basic production costs: Direct materials, Labor and Overhead. After these costs are determined, a price is then selected that will be both profitable and competitive. Because pricing can be a complicated process, you may wish to seek help from an expert.


26. Are some locations better than others? Time and effort devoted to selecting where to locate your business can mean the difference between success and failure. The kind of business

you are in, the potential market, availability of employees and the number of competitive establishments all determine where you should put your business.


Pristina is a great location for restaurants and shops, but a manufacturing plant should locate in the country where land is cheaper.  Farizaje is a great location for shops and restaurants because of the proximity to Camp Bondsteel.


27. Is it better to lease or buy the store (plant) and equipment?


This is a good question and needs to be considered carefully. Leasing does not tie up your cash; a disadvantage is that the item then has no resale or salvage value since you do not own it. Careful weighing of alternatives and a cost analysis will help you make the best decision.


28. Can I operate a business from my home?


Yes. In fact, experts estimate that as many as 20 percent of new small business enterprises are operated out of the owner's home. Local SBA offices and state chambers of commerce can provide pertinent information on how to manage a home-based business.


29. How do I find out about suppliers/manufacturers/ distributors?


Most suppliers want new accounts. A prime source for finding suppliers is the Thomas Register, which lists manufacturers by categories and geographic area. Most libraries have a directory of manufacturers listed by state. If you know the product line manufacturers, a letter or phone call to the companies will get you the local distributor-wholesaler. In some lines, trade shows are good sources of getting suppliers and looking over competing products.


30. Where can I go for help?



This is the official website of the United Nations Mission in Kosovo.  It features relatively up-to-date, official information disseminated by the UN.  You can link to the four “pillars” of UNMIK from this cite to search for information on police & justice, civil administration, institution building and economic reconstruction.  In addition the cite features news headlines and a comprehensive list of the UNMIK regulations.  This should be your first stop if you are looking for any information regarding Kosovo.



This is the official website of the KTA.  The KTA is responsible for encouraging the success of socially owned and public enterprises and instituting the privatization of socially owned and publicly owned institutions in Kosovo.  Here you can find an explanation of the objectives of the KTA, as well as, press releases and pertinent UNMIK regulations.  This cite also features a useful publication called “Ten Top Tips for Investors Coming to Kosovo.”



The mission of the KBS is to support and encourage small and medium private business enterprises in Kosovo in order to stimulate employment and economic growth.  This website contains many useful business tools including publications explaining the current accounting standards for small businesses, information on conversion to the Euro and , information on how to write a business plan.  The cite lists KBS press releases that appeared in the local newspaper and they list services which include assistance with writing a business plan and other useful training programs.  A visit to the KBS seems like a necessary first step for the new business entrepreneur. 



This site has a lot of information describing the mission of this organization and information encouraging young Americans to volunteer for this organization.  The Market Development Services page linked to this site is the page pertinent to the Kosovar entrepreneur.  This page links to a business resources guide, a chat room for entrepreneurs and contains links to other sites.  Also, the newsletter is accessible from this site.  Here a person can read about other entrepreneurs’ successes and related articles. 



This site offers current information regarding the Albanian business sector.  It is also a source of information for Americans wishing to do business in Albania.  You will find explanations regarding how to set up a business in Albania.  The Business Development and Information Services page of this site explains specifically programs available to Kosovar entrepreneurs and American entrepreneurs wishing to invest in Kosovo. 



This page provides resources for Kosovar entrepreneurs to connect with the European small business sector.  The website provides a source for business news in Kosovo.  The primary benefit of using this site is that an entrepreneur can register here and have information regarding business opportunities in Europe or in Kosovo sent to him.  This site provides a place for entrepreneurs to link with one another to pursue some sort of business relationship. 



This is the site for the Ministry of Trade and Industry.  This site is dedicated to improving the market in Singapore and Southeast Asia generally.  This site is useful to the entrepreneur who is interested in learning more about the concepts and philosophy of free trade as this is discussed at length.  In addition, an entrepreneur can learn how to trade with Singapore by exploring this site and making contact with the appropriate person through the site.  Lastly, using the information on this site, an entrepreneur can model his business concept after some of those presented here.  



This links you to the World Bank Kosovo page.  This site provides information describing the role and mission of the World bank along with local contact information.  There are a number of press releases, links to other sites and news articles on these pages where an entrepreneur can access information.  This site contains the “World Bank Report on Kosovo: Medium Public Expenditure Priorities.”  This document traces the economic situation in Kosovo from the war until the present.  This site gives the entrepeneur an overview of the current economic situation and some background information useful for constructing the business plan.



This is the site for the Kosova Development Agency.  There are a lot of helpful statistics about Kosovo on this site.  The site lists the businesses that have retistered with the site throughout Kosovo.  The site describes the offerings of the Kosova Development Agency including consulting, training and promotion.  You will find contact information for the Kosova Development Agency at this site. 



 This is the US Office Pristina home page.  This page is the official US government site on Kosovo and you can link to other official US government websites from here.  The general purpose of this site is to keep Kosovars informed of the US government policy toward Kosovo and the programs that the US supports in Kosovo. 



Sources of Web-based accounting lessons:


31. What do I do when I'm ready?


You have done your homework: you have a complete business plan; you know where you want to operate; you know how much cash you will need; and you have specific information on employee, vendor and market possibilities. You now may want someone to look over your plans objectively. Contact the business department at a local college for another opinion. Then, when you have made the final decision to go ahead, it is time to call the bank and get going. Good luck!