Starting a New Business: Where to Start

Starting your own business requires a lot of very hard work is an understatement. It is important that you talk to a few business owners about what it took to open their business, and you will quickly learn this truth. Coming up with a business idea is a great starting point but inspiration does not become realized without many grueling hours of hard work. Even if you are a new entrepreneur and understand the effort necessary to create a business you may not be familiar with the process required to get to that opening day and first ribbon cutting. If you are willing to put in the effort and have a passion to build a business, you are going to need to know the necessary process to reach that goal. 

Naming your business and creating a logo are initial steps but where to go from there? You need to consider the business structure, marketing strategy, a roadmap, a mission and vision, and so much more. As you dive into your endeavor you will quickly become aware of the immense challenge ahead of you. Make sure you are getting a strong start by seeking help through the initial process. Coaches and consultants take you through the steps necessary to make your dream business a reality. In this entrepreneurial insight you will be enlightened about the following processes:

1.      Refine Your Business’s Mission and Vision

2.      Write a Business Plan  

3.      Choose a Business Structure 

4.      Determine if Insurance is Necessary or Required 

5.      Build Your Team 

6.      Research Options for Vendors 

7.      Brand Your Name for Marketing 

8.      Open Your Doors and Grow

Refine Your Business’s Mission and Vision 

You most likely have an idea of what industry you will be entering and an idea of what you are seeking to provide for the public or other businesses. It is wise to research other companies who have similar businesses that you will need for your business plan as well. Find out what other businesses are doing and figure out how to set your idea apart from the rest. Ask yourself if your business will specialize or offer a broad array of services and/or products. What services will be different or better and improved as compared to your competition? After you have researched and brainstormed some ideas you are ready to draft your mission and vision statement. Coaches and consultants help with this process because your mission and vision will help define your passion and direct the rest of your plan, including the culture you want to create within your team and brand.  

"It is good to know why you are launching your business." Glenn Gutek

If you are considering a franchise of an established company the concept, brand, following, and business model are already in place. It is very important you can get behind the already established brand, mission, vision, and culture and make sure it aligns with your goals and passions. A franchise requires a good location, and the money needed to buy-in. 

"Many people think they have a great idea and jump into launching their business without thinking through who their customers will be, or why these people should want to buy from or hire them. Second, you need to clarify why you want to work with these customers – do you have a passion for making people's lives easier? Or enjoy creating art to bring color to their world? Identifying these answers helps clarify your mission. Third, you want to define how you will provide this value to your customers and how to communicate that value in a way that they are willing to pay." Stephanie Desaulniers

Start thinking about the details, question your motive, define your passion. If you have these concrete ideas on paper, then there is a market for your inspired business. We will be tackling these questions soon.

Write a Business Plan

Once you have your mission, vision, and market research in place, you need to ask yourself these important questions in order to draft a strong business plan: 

 ·        What is the purpose of your business? 

·        Who are you selling to? 

·        What are your end goals? 

·        Where will you be marketing?

·        How will you finance your startup costs? 

Take the time to ponder these questions in great detail with much research and thought. Do not overlook the details or make rushed assumptions. Jumping in without the necessary information will compromise your business and, more importantly, your perceived market may not exist. 

Coaches and consultants will help you with all of the crucial aspects of a well-thought-out business plan. You need research on demographics that may require conducting surveys, holding focus groups, and researching public data. Exit plans are also important to consider because it makes you look into the future and iron out some of the details that may not be on your mind during this initial stage of the planning process.

"Too often, new entrepreneurs are so excited about their business and so sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business." Josh Tolley

A business plan is a roadmap for your company’s direction and how your company will solve problems. A very important part of the plan is the assessment of finances for starting the business. If you seek lending from third parties your business plan is essential and must have detailed research in all of the previously discussed issues. Assessing your financial needs correctly and accurately is essential and will be determinative of success or failure. Questions to ask and answer are:

1.      How much money does it take to start up your business?

2.      How long will it take to start making a profit?

3.      Do you have enough funds to support the business during the beginning months/years?

4.      Do you have the means to fund your startup?

5.      Do you need to borrow money? 

6.      If you are planning to leave your current job to focus on your business, do you have money put away to support yourself until you start making a profit?

Startup businesses often fail because they run out of money too quickly before turning a profit. Overestimating the amount of capital you need is always recommended. Stay away from overspending and ask if the expense is a need or a want. “Wants” can wait. Don’t sacrifice your goals with high-pressure salespeople or fancy shiny unneeded equipment that may create future hardships. 

"A lot of startups tend to spend money on unnecessary things. Luxuries can come when you are established." Jean Paldan

Commercial loans or a small business loan through the Small Business Administration (SBA) are options to acquire funding. Startups requiring significant funding up front may want to consider an investor. Investors can provide several million dollars but may want to have a hands-on role in running your business. Another option is to launch a fundraiser campaign through one of the many crowdfunding platforms. 

Choose a Business Structure

Consider what kind of entity your business will be so that you will be ready to file it with the appropriate authority. The business structure affects everything from filing your taxes to personal liability. There are many structures that have their own legal effect. Business structures include sole proprietorship, a partnership, a limited liability company, a for-profit corporation, or a non-profit corporation. Depending on the state in which you file there are various options within each of these structures. Some information to understand is how each entity affects your personal liability, liability shared with others, how property is titled, how profits and losses are shared, and many other exposure issues.  

Ultimately, it is up to you to determine which type of entity is best for your current needs and future business goals. If you are struggling to make up your mind, it is not a bad idea to discuss the decision with a CPA or legal counsel.  

After you have decided on a business structure you are now ready to register with the federal and state governments in order to become recognized. The Internal Revenue Service (IRS) has requisite processes including obtaining an EIN and filing certain tax forms. Visit IRS.gov for more information. Each state has different requirements so be sure to visit your state’s secretary of state’s website for requirements and filing fees. Likewise, each kind of business structure has different document requirements. For example, corporations need articles of incorporation and bylaws whereas limited liability companies need articles and an operating agreement. Trademarks and Doing Business As (DBA) names/designations also need to be registered with your state. Registering as a foreign entity in a subsequent state all have different requirements and filing fees as well. A complete list of the forms, licensing requirements, and state-specific tax obligations for each type of entity can be found on the SBA’s website.  

Don’t panic! That is a lot of information and if you feel overwhelmed, you are not alone. Coaches and consultants are ready to help dig through all of these issues, so you do not waste time and money on filing the wrong documents or providing incorrect information. Take a deep breath and continue reading - the next steps in the process of starting a business are more exciting!

Determine if Insurance is Necessary or Required 

Purchasing the right insurance for your business is an important step to do before you officially launch. Dealing with such incidents as property damage, theft or even a customer lawsuit can be costly, and you need to be sure that you are properly protected. 

If your business will have employees, you will need to purchase workers' compensation and unemployment insurance. You may also need other types of coverage depending on your location and industry, but most small businesses are advised to purchase general liability insurance that covers property damage, bodily injury and personal injury to yourself or a third party. Most of the time if you have a leased premise your landlord will require an insurance policy so be sure to read the requirements which will be stated in your lease.

If your business provides a service, you may be required to purchase professional liability insurance. It covers you if you do something wrong or neglect to do something you should have done while operating your business. 

Other considerations are health insurance if you offer benefits. Life insurance is recommended especially if you or others are key personnel in your business. What would happen if you or your partner were to unexpectedly pass away? Can your business survive the financial hardship until a replacement can be found or the business wrapped up? 

The needs of every business vary. Don’t hesitate to seek help in determining and assessing what insurances are mandatory, necessary, or recommended. Again, always keep in mind your budget and if the insurance is actually necessary. As you can see, this subject is very exciting and, in addition, choosing your structure is not daunting, right? Let’s dive into your team and the enjoyment of finding the right personalities to jump on board with your vision!

Build Your Team

Unless you are planning to be your only employee you are going to need to hire a great team to get your company off the ground. 

“Entrepreneurs need to give the ‘people’ element of their businesses the same attention they give their products.” Joe Zawadzki 

 Questions to ask as you build your team:

·         Identify your needs - do you need engineers, data entry clerks, cashiers, stockers, human resources, office managers, etc.?

·         What personnel are absolutely necessary and which ones can be hired later?

·         Can you use contractors instead of full-time employees?

·         How will the team culture stay together?

·         What are the roles and responsibilities of each position?

·         Can some positions be combined to start?

·         What compensation structure will you offer?

·         Do you have a bonus or benefit plan?

·         What processes do you have in place for division of labor? For recognition? 

As you start compiling the needs of the company be sure to get into the details. Your employees are your biggest investment and asset. Keep in mind a team will make or break a company. Keep the company’s culture close and stay fully engaged in your company. This is your dream, your baby, your life. Coaches and consultants can assist you in putting together that initial team. They want to see your company at the top and it all starts with your initial team.

Research Options for Vendors

Are you overwhelmed yet? That is okay because there are still many more considerations we need to get through! Your business will need vendors whether that means a supplier of products or computer programs to help your business and team stay organized. That's where third-party vendors come in. Companies in every industry from HR to business phone systems exist to partner with you and help you run your business better. Companies will have access to vital and potentially sensitive business data, so it is critical to find someone you can trust. Make sure potential vendors have experience in your industry, check their track record with existing clients, and find out what kind of growth they have helped other clients achieve. Choosing computer systems and software can influence your company. You want to consider the costs and if the program can grow with your company. Converting company data into a new and bigger program later is not impossible but it can be a lengthy and costly process. Each industry has different needs. For example, a restaurant needs a good point of sale (POS) system. A sales office needs a good program to follow leads. The needs are endless. Coaches and consultants will help in deciding what programs or consultants or contractors are needed and wanted. They will carefully analyze and research your company’s needs so they can make strong recommendations.

Brand Your Name for Marketing

Before you start selling your product or service you need to build your brand and get a following of people so when you open your doors, they are ready to buy. Create a logo that easily identifies your brand and be consistent in using it across all platforms including your website, social media, and print media. Social media is a great way to spread the word about your new business as a promotional tool to offer coupons and discounts once you launch. Always stay up to date with relevant and interesting content about your business and industry. Do not overestimate the importance of your website. It is a vital and enormous investment. Many startups skimp on this investment.

"The issue is they see their website as a cost, not an investment. In today's digital age that's a huge mistake. The small business owners who understand how critical it is to have a great online presence will have a leg up on starting out strong."  Ruthann Bowen

Creating a marketing plan that includes future goals is essential to building and growing by continually and consistently getting the word out about your business. This process, especially in the beginning, is just as important as providing a quality product or service. Coaches and consultants help with all stages of this process including building your website and social media, providing advice, customizing content, and much more. 

Open Your Doors and Grow

Opening your doors and making that first sale is only the beginning of your task as an entrepreneur. Keeping that pipeline full is essential to avoid the pitfalls of the ups and downs of business income.  To make a profit and stay afloat, you always need to be growing your business and bringing in new customers or clients. It is going to take time and effort, and you will get out of your business what you put into it. Stay on top of social media and print media, keep networking, offer discounts to recurring customers and referrals, make a presence in your community by volunteering or offering your services at a discount to veterans. Remember to contract where you can and automate if you are able but you are the face of your business, so it is vital that you stay involved and diligent at every stage of your business. Let your passion shine through you and your business. Be that business owner that others envy.

While these tips help launch your business and get you set to grow, remember your plan is a living document and needs attention from time to time. You want to make sure you prepare thoroughly for starting a business but as situations occur and times change so will your plan. Adapt and grow at all times. Avoid rigidity and expect the unexpected. Enjoy the journey!  

"Be prepared to adjust. There's a saying in the military that 'no plan survives the first contact' meaning that you can have the best plan in the world but as soon as it is in action, things change, and you have to be ready and willing to adapt and problem solve quickly. As an entrepreneur, your value lies in solving problems whether that is your product or service solving problems for other people or you solving problems within your organization." Stephanie Murray

 Be passionate, be excellent, be energetic, and most of all, be present!