Business ownership – the American dream! Taking the plunge into entrepreneurship can at first seem daunting, as many variables must be carefully considered before opening up shop. Luckily, you’re not alone. Many resources and professionals are available to assist you in creating your dream business and ensuring its success. These five tips will help get you started on the right track.
- Establish a clear vision. Before you can hang an “Open for Business” sign on your door, you must first take the time to decide what it is you are offering in the marketplace. Is your business one that develops a product, sells a product developed by others, or offers services in a particular field or specialty? Is your product or service unique or different from what’s already being offered in the marketplace, and if so in what way? Establishing a clear focus for your mission and niche market will attract the customers and clients that need your product or service. Not doing so will leave potential customers and clients confused, causing them to take their hard earned money elsewhere.
- Create a business plan. Business plans are time consuming and require you to do your homework regarding budgeting for overhead and other costs, as well as expected growth projections over a set period of time. The arena in which you market your product or services will largely determine many of these factors. Drafting your business plan can be accomplished using established templates, and/or software products available at reasonable costs. Your business plan is a key component to creating a venture that will sustain you in high and low times, and will serve as your roadmap for many decisions you’ll have to make over the years.
- Stick to your budget. The William Feather quote “A budget tells us what we can’t afford, but it doesn’t keep us from buying it,” cannot be your motto when managing your business finances! Crucial to the success of your business is determining your financial needs and sticking to a defined plan. At the outset, it is important to determine how available funds are to be apportioned relative to the fixed and variable costs you will encounter. These considerations should be included in your initial business plan. Determining your costs for overhead will help you decide whether you want to buy or lease space for your business. As marketing is a key component to attracting customers and clients, you should be factoring into your budget analysis costs like designing and maintaining a website, print ads, and other marketing tools. The costs for payroll, supplies, and equipment to run the day to day must also be determined. Consulting with an accountant and financial planner can assist you in establishing a budget that will work. Though it may be tempting to opt for opulent options when starting your small business, be prudent in your spending. Keeping your costs low at the outset will help you get your business off the ground, and as your business grows you can expand in a variety of ways and upgrade accordingly.
- Form your business entity. Now that you know what you’ll be offering in the marketplace, and you’ve established a clear vision and business plan, factoring in your budgetary needs, you must next form your business entity. Various types of business formation options exist – sole proprietorship, general partnership, limited liability partnership, corporation, and limited liability company. When forming an LLC, it is good practice to create an operating agreement (an internal, legally binding instrument) as it will help avoid misunderstandings between owners over finances and management, states clearly procedures for decision making, departure, and addition of members, and sets up rules for how profits will be split up, among other considerations. Each state has its own requirements for filing business related documents and fees, and various tax implications and options must be considered, so be sure to seek the counsel of an attorney in your state to advise you on all legalities involved, and seek the advice of your accountant to discuss various tax implications and other financial considerations going forward.
- Marketing and networking. Marketing and networking will help you promote your business to the customers and clients that need your product or service. We touched a bit upon some marketing needs you’ll encounter in Tip 3 above. Setting up a website is one step in the right direction, but having a quality SEO (search engine optimization) team behind you that won’t break the bank is key in our digital age to ensuring potential customers and clients find you. Search engines like Google and Bing have replaced the traditional method of combing through phone books in search of area businesses. Free marketing and networking sites like LinkedIn and Facebook, as well as creating profiles on databases directly related to your business or profession, is another great way to promote your business.
While adapting to utilizing online mediums to attract business is necessary, you must still engage with people in daily life to create lasting relationships and potential sources of referral. Become an active member of your local Chamber of Commerce and other professional organizations, volunteer for various causes and charities that mean something to you, attend conferences and networking events to meet people in your field and expand upon your knowledge base. Not only will these efforts help to promote your business, but you will come away with a sense of fulfillment to see the positive impact that you and your business can have on the community you serve.
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