Navigating through the various stages of establishing your business can be a little daunting. This guide is intended to help you stay on course and save time and money in the process.
Here are 6 steps you should take, no matter whether you’re doing business commercially or with the government.
1. Do an Assessment
Starting a business is a calculated risk. You want to make sure that you’re venturing into entrepreneurship for the right reasons. “I want to work for myself” is not a compelling argument.
The truth of the matter is, you’ll still have to answer to several people when you go in business for yourself: accountants, lawyers, bankers, website designers, photographers and your customers. In fact, your clients/customers will determine the trajectory of your business. You’re on their watch now.
With that in mind, you should consider taking a few different assessments to see if you’re ready for this type of venture at this particular time. There are free online tools that will give you questions to think about, such as: “Are you prepared to sacrifice family obligations in order to build your business? “Do you set limits for yourself (time, money, projects) and follow them strictly?” “Are you willing to work 60 hours or more per work week?” These, among other questions, are intended to help you determine if your personal, professional and lifestyle habits put you in a strong position for entrepreneurship. This entrepreneurship self-test and this business assessment are good places to start.
2. Do Your Research
Now that you’ve assessed yourself and are still confident in your ability to take on the challenges of a startup, it’s time to make sure that you’re going into the right market. Think of your business as a solution to a problem. If there isn’t a problem, then people aren’t going to spend money on your product or service. You want to get clear about what need you fill in the marketplace. If you aren’t filling a specific enough need, you won’t see the type of traffic that you want.
Take the time in this stage to dig around. It’s better to put in the time on the front end than on the back end. Figure out who your competitors are. Study their social media strategy. What is effective? What grabs your attention? How can you do it differently? Getting someone to switch their favorite makeup or clothing brand may be a little difficult. Be ready to answer why they should shop with you versus Sephora or Steve Madden.
You’ll also need to broaden your perspective and get objective opinions on the matter. Don’t underestimate the utility of an online survey or a phone interview. These are great ways to get feedback from potential customers. Focus groups work as well, depending on your industry.
You can create a survey using free tools such as Survey Monkey or Google Forms.
3. Test Your Idea
After you get a good amount of feedback–say 50-100 surveys and interviews–it’s time to bring your idea to the market. Whether you realize it or not, all of those interviews helped you build your tribe. You were able to weed out people who weren’t your target market. You were able to see trends in the answers of likeminded individuals. So, now it’s time to go find more of those like-minded people!
Where do they hang out? Where do they network? How can you get an “in” with them? Hopefully, your survey questions gave you insight into these answers. Now you don’t just know the demographics of your customers, you know the psychographics: their spending habits, their lifestyle choices, etc.
The best approach is to offer them a sample of your product or service for a free or discounted rate. If you’re starting a consulting business, offer a free 30-minute session. Give discounts for a certain amount of booked referral appointments. If you’re selling jewelry, do a package deal (buy one, get one free for a friend). This is the time to find out what works and what doesn’t work. It’s okay to play around with your pricing during this stage. All you’re really trying to do at this point is build confidence in yourself and your ideas.
4. Seek Counsel
Now that you have something to work with, it’s time to take your ideas to a business counselor. There should be a business development center in your area that offers free counseling to startups. The Women’s Business Center of Northern Virginia at Community Business Partnership is one such center. These counselors will advise you on how to solidify your ideas as an actual legal business entity. They may teach you the components of a business plan, help you with your marketing strategy and even give you financial advice. This particular organization also connects their clients to accountants, attorneys and other business specialists free of charge.
Visit www.sba.gov for Small Business Administration (SBA) resource partners in your area.
If you don’t happen to have the time to meet with a counselor or attend any classes at a business development center, there are always online resources.
Subscribe to Walker’s Legacy, www.entrepreneur.com, www.forbes.com, or www.inc.com. If you’re “old school,” pick up a few business books from the library when you’re doing your Saturday morning errands.
The point is, there are plenty of resources out there to help you gain the information you need to make informed decisions in your business. Also, never underestimate the wisdom that comes from a conversation with family members, colleagues, etc. who have been down the entrepreneurial road before!
5. Make It Official
The business advisors that you consult with will, no doubt, get you in line to do everything the proper way. This includes opening a business checking account, legalizing your business, and getting insurance.
A. Choose Your Name
Depending on your industry, you may consider trademarking your business name or slogan. This will prevent anyone else from taking the name. Not every business needs to take this precautionary step, however. As a general rule of thumb, though, you should do a quick Google search to see if there are any other businesses with a similar name and website like the one you plan on registering. If there isn’t a website domain name with the one you want, you’re in pretty good shape to move forward with that name. To register for a trademark, check out this site.
B. Open a Business Bank Account
You will be advised to open up a business bank account so you won’t comingle your business and personal funds. Even if you are just making pennies, it’s better to keep the funds separate. This website has compiled a list of banks that don’t charge for small business checking accounts.
C. Protect Your Business
We live in a day and age where people are quick to file a lawsuit for any old reason. As a business owner, you want to make sure that you are protected. This includes having a wall of protection between your personal assets and your business assets, as well as having the necessary insurance. There are a few different legal entities under which to file your business: sole proprietorship (not recommended), limited liability company (LLC), C Corporation or S Corporation. For an in-depth description of each entity, visit this site.
6. Create Your Business Plan
Finally, after all of these steps are completed, it’s time to write your business plan.
The business plan can exist for one of two reasons: (1) as a general guide for you to get started and to plan for growth or (2) as a necessary document to receive outside funding.
You should always be the one writing your business plan. Don’t pay someone else to write it for you because it won’t have your heart or vision! This is a document that should be consulted and updated regularly. It’s a way for you to get all of your ideas out of your head and onto paper. It’s a roadmap for your business. For a general template of sections to include, visit here.
Hopefully, this gives you a good checklist to get started. Feel free to reach out if you have more questions!