Ready To Take The Plunge? How To Start Your Own Business Without Losing Your Mind
Could I start my own business?
The thought probably makes a lot of you cringe, and perhaps you instantly think, ‘yeah right!’ But, truth be told, if you have a skill set, talent or product that people are willing to pay for, why not entertain the idea?
According to the Small Business Administration, nearly 66% of small businesses will survive their first two years. There are so many resources out there today to help you get started, and starting a business is actually easier than you may think.
Here’s a quick guide to help you harness that passion into something substantial.
Do your research
Chances are, if you have a product your selling, a service your offering or idea you’re interested in pursuing, it may already exist, which is why the research phase is so important. The last thing you want to do is embark on a risky business venture, only to find that you’re trying to tackle a very saturated market. Focus in on the industry that you’ll be pursuing, and spend a lot of time figuring out what companies already exist, basically know your competition.
There’s a very well-known practice you can perform, called a SWOT Analysis (SWOT standing for Strengths, Weaknesses, Opportunities, Threats) that will allow you to identify potential areas of focus against your competitors.
For example, if you sell custom gift baskets with a focus on businesses and large corporations, you may find that there are several other gift basket companies offering something similar, but they may focus in a specific theme, such as wine and cheese; chocolate; high-end decor, etc. Where are you different? What can you offer that they don’t? How does your price point stand against theirs, and what are your margins? If they targeted a very specific customer and you don’t, is there an opportunity? How do they market themselves?
Understanding all of this about each of your competitors and how you stack up will help you determine what you’re up against.
Validate there’s an audience
The research doesn’t just cover your potential competitors, but it also ensures that you validate if in fact there’s an audience that’s willing to pay for your product and/or service offering. Solicit feedback from a select group of potential customers, and have them ‘test out’ your idea and gain feedback. This will allow you to determine whether or not they’d actually pay for your product and help you refine your marketing strategy.
Keep in mind, the more people you can help validate your offering, the better. Also, if you’re offering up something uniquely distinctive, have them sign a NDA (Non-Disclosure Agreement) so you don’t run the risk of anyone ‘leaking out’ your idea to a potential competitor.
Make a plan
A solid business plan will act as a blueprint as you start to develop your business and will cover everything from product development to your marketing strategy, and everything in between. If you plan to solicit any capital funding to help get things off the ground, a business plan is a must. The good news is that there are several phenomenal resources that can help you build out your business plan. Check out the Small Business Administration for starters or your local SCORE Chapter, as they will be chock full of great info, and can even offer up one-on-one guidance from business coaches for a small or nominal fee.
Plan your finances
Based on the type of business you will be starting, initial investment needed will vary. Spend time on this - as the last thing you want to do is venture out, only to be quickly in over your head. Make sure you plan for things like trademarks, licenses, permits, equipment, legal fees, insurance, upfront inventory, etc. These things will quickly add up, so do your best to estimate them up front so you know what you’re in for. If you can fund your business idea slowly that is ideal and will help you maintain control over the idea and concept you have developed.
Keep in mind there are also many resources available to help with initial funding, too, such as small business grants, angel investors and small business loans. Check out this great article on 4 Ways to Fund Your Business on a Bootstrap Budget, by Alyssa Gregory.
Choose your business structure
Establish an LLC, be a sole proprietorship, create a partnership or develop a corporation? You need to decide what is the best path for you, as all of these will come with different factors that will impact your business name, how you file your taxes, your liability, and much more. It’s easy to get caught up in the moment and rush through this process, according to Entrepreneur.com.
“You're consumed with getting the business off the ground and usually aren't thinking of what the business might look like five or ten-let alone three-years down the road. What will happen to the business after you die? What if, after a few years, you decide to sell your part of a business partnership?”
Be smart, and do your research.
Pick and register your business name
Your name is your brand, and your brand is so important. Having worked in an industry where marketing and design has played such a large role, I realize how critical this step is - for so many reasons. Spend time thinking about what your business name is, and what it means. Does it always require explanation? Is it hard to pronounce? Is it a made up word that doesn’t resonate well, or conflict in other cultures? Give it some thought, bounce the ideas off a few of your close business colleagues, and get some input.
Once you’ve decided on a business name, check to make sure the name isn’t already trademarked or currently in use - especially within the same industry you’re looking to embark in. A great resource to get your designated business name trademarked is through the online resource, Trademarkia . You will save money using this online resource versus going into a brick and mortar trademark law firm. The last thing you want is to have competing brand names that offer comparable service and/or products, when you’re just entering the market. That’s a recipe for disaster just waiting to happen. Be sure to also register and purchase a domain as well, through sites like GoDaddy.com.
Get the necessary licenses and permits
Virtually every new business will need some sort of license or permit to operate legally when they are established. One of the biggest reasons is for the government to be able to track revenue for taxation purposes; the other, is to protect the public. Each industry is different, and may require different licenses or permits - and they may even vary by state. This stage of forming a new business is oftentimes overlooked - but can end up being very costly, or even cause your business to be shut down.
The Small Business Administration has a robust list of permits and licenses required by state, so spend some time reviewing this and make sure you’ve got yourself covered before you begin operating.
Choose your accounting system
This may seem like an odd investment right off the bat, but having a good accounting system in place will ensure things run smoothly as your business grows - and can help you manage your budget, set your rate and prices, invoice your customers, conduct business with others, and help file your taxes. Of course, you can always opt to hire an accountant, but there are so many software platforms available on the market today, that you may be able to manage things on your own. Plus, most of them will come with an app for your smart device, so you can have access to your accounting systems while bringing home the bacon.
If you decide to take the plunge and start your own venture - be bold. Take risks. Aim high. Creating a successful business is easier than you might think - and now, more than ever, you have abundant resources that can help you get off the ground and take flight. Just spend a little time researching websites dedicated to entrepreneurship, and you’ll find more than you’d ever need. Good luck!!