Everyone dreams of owning their own business, being your own boss and leading yourself to your destiny. It can absolutely be difficult and challenging. Being rich and highly educated is not compulsory for that. One thing is – Planning, planning, planning!
So here I am, giving you some tried, tested and true pointers to pave your way to your own business, and begin with it right now, because today is the best time to get started.
1. Prepare an Outline
• Understand what you want. Would you want financial independence or you aim to sell your business eventually. Do you want something small and steady or you plan to expand. These are the things that are good to ponder on, in the very beginning.
• Choose your product. It might be a something you’ve always wanted to do, or something you think people really need. It might even be something people have never thought about, but you think that it would be a great help.
• A casual brainstorming session with your peeps can really brighten things up. Start with the very basic: “what shall we do?” the purpose is not to create a business plan but to generate ideas for business. You might get few ideas with real potential in them.
• Think of a name. Sometimes a name may help you identify with the idea of the business you are planning. As your plan grows, and things begin to take shape, the perfect name may come to you, but for instance create a name and change it later on, if required.
• Define your team. To bring synergy upon the table, you might ask one or two of your friends to join or you can do it alone too.
• Think about some of the billionaires’ success stories in recent times – John Lennon and Paul McCartney; Bill Gates and Paul Allen; Steve Jobs and Steve Wozniak; and Larry Page and Sergey Brin. In every case, the partnership brought out the best in both sides of the equation.
• Choose wisely. Be careful when choosing the people to build your business with. Even if someone is your best friend, it doesn’t mean that you will partner well in a business operation. Start it with a reliable person. Make sure that the other person can overcome you weaknesses, both partners should have different skills. Make sure that the other partner also loves and is passionate about the business as you are.
2. Writing a Business Plan
• Create a business plan. A business plan summarizes the sense of your business in a single document. It also creates a map for investors, bankers, and other interested parties to use when determining how they can best help you and to help them decide whether or not your business is feasible.
• Write your business description. Describe your business more specifically, and how it fits into the market in general. Describe your product, its big features, and why people will want it.
• Understand your potential customer market segment and prepare a marketing strategy.
• Analyze your competitors.
• Carve an operational plan. This will describe how you will produce or deliver your product or service and all costs.
• Define your organization, from the receptionist up to the CEO, and what part each plays in both function and financials. Knowing your organizational structure will better help you plan your operating costs, and fine-tune how much capital you will need to function effectively.
• Cover the financials. The financial statements translate your marketing and operational plans into numbers — profits and cash flow. They identify how much money you will need and how much you might make, you should update this monthly for the first year, quarterly for the second year, and then annually after that.
• Cover your startup costs.
• What price do you intend to sell your product or service for? How much will it cost you to produce? Work out a rough estimate for net profit—factoring in fixed costs like rent, energy, employees, etc.
• Come up with a pricing model. Start by checking out your competitors. Know how much they are selling a similar product for.
• Consumers are increasingly conscious of the need to show that your business is concerned with labor conditions and isn’t damaging the environment. Certification endorsements from reputable organizations, such as labels and stars, can reassure customers that your product or service is more aligned with their values than one lacking the certification.
• Come up with an executive summary. The first part of a business plan is the executive summary. Once you’ve developed the other parts, describe the overall business concept.
3. Managing Your Finances
• Manage your running costs. Keep a close eye on your running costs and keep them in line with your projections. Think economically when you start up, including hiring items instead of purchasing them and using pre-paid plans for services your business needs instead of locking yourself into long-term contracts.
• Have more than the minimum. You may determine it will take $50,000 to start your business, and that’s fine. You get your $50,000, buy your desks and printers and raw materials, and then then the second month arrives, and you’re still in production, and the rent is due, and your employees want to be paid. If you can, try to have the reserves for a year of no income.
• Pinch those pennies. Plan to keep purchases of office equipment and overheads to a minimum when starting up. You do not need amazing office premises, the latest in office chairs and pricey artwork on the walls. You can artfully steer clients to the local coffee shop for meetings every time (meet them in the foyer).
• Decide how to accept payment. You will need to do something to get payment from your clients or customers.
• A merchant account is a contract under which an acquiring bank extends a line of credit to a merchant, who wishes to accept payment card transactions of a particular card association brand. Previously, without such a contract, one cannot accept payments by any of the major credit card brands. However, the Square has changed that, so don’t feel locked in or limited to this option. Do your research.
• The Square is a card swiping device which connects with a smartphone or tablet and turns that device into a sort of cash register. You may have encountered this device in the businesses you frequent, as they are becoming common at coffee shops, restaurants, street food stands and other businesses (look for a postage-stamp sized plastic square plugged into a tablet or phone).
4. Covering the Legal Side
•Consider finding an attorney or other legal advisor. There will be many hurdles to leap as you go from working stiff to overwork and underpaid small business owner. Some of those hurdles will be composed of stacks of documents with rules and regulations, ranging from building covenants to city ordinances, county permits, state requirements, taxes, fees, contracts, shares, partnerships, and more.
•Choose someone with whom you “click” and who shows that he or she understands your business. You will also want someone with experience in this area, as an inexperienced legal advisor could lead you to legal trouble or even fines and prison time.
•Get an accountant. You’ll want someone who can deftly handle your financials, but even if you feel you can handle your own books, you’ll still need someone who understands the tax side of running a business. Again, no matter how much of your finances they’re handling, this should be someone trustworthy.
•Form a business entity. You’ll need to decide what type of business entity you want to be, for tax purposes and hopefully to eventually attract investors. Most people are familiar with corporations, LLCs, etc., but for the vast majority of small business owners, you will need to form one of the following:
• A sole proprietorship, if you will be running (not including employees) this business on your own or with your spouse.
• A general proprietorship, if you will be running this business with a partner.
• A limited partnership, which is composed of a few general partners, who are liable for problems with the business, and a few limited partners, who are only liable for the amount in which they invest in the business. All share profits and losses.
• A limited liability partnership (LLP), where no partner is liable for another’s negligence.
5. Marketing Your Business
• Get a website. If you’re selling online, get your ecommerce in gear and either build a website, or have one built for you.
• Alternatively, if your business is more oriented toward the “in person” experience, traditional marketing may be just as important.
• Hire professional designers. If you do decide to get a website, make sure it looks professional. Designers may cost more initially, but a well presented and trustworthy site is essential. It needs to look professional and work with ease. If you are including money transactions, invest in security encryption and check that your money transfer companies are sound and reliable.
• Discover your inner publicist. You might truly believe in your product or service, but in order for it to be successful, everyone else must believe in it too. You need to develop an excellent short pitch to convince people they need your product or service, one that reflects the value, purpose and potential of what your business is offering. Write down this pitch in many ways until you find one that you feel satisfied says it all and is something you can say readily. Then practice it like crazy!
• Depending on your business, it could be appropriate to have interesting, eye-catching business cards printed.
• Spend time developing an excellent social media presence. This can be done well before the business is ready, increasing anticipation. Use Facebook, Google+ and Twitter, and any other social media you participate in to build excitement and spread the word. You want to build a buzz so that people will begin following your progress. (Be sure to choose business accounts for your business and keep your personal accounts separate. The messages you send should be tailored differently, depending on which account you’re sending from.)
• Implement your marketing and distribution plans. With your product being built or services developed, and a reasonable expectation on when either is ready for selling, begin marketing.
• If you will be advertising in periodicals, they will need copy or images at least two months in advance of publication.
• If you will be selling in stores, get pre-orders sold, and shelf space allocated. If you will be selling online, get that e-commerce site ready to sell.
• If you’re offering a service, advertise in appropriate trade and professional journals, newspapers and online.
6. Launching Your Business
• Secure space. Whether it’s an office, or a warehouse, if you need more space than your garage or your spare bedroom, now’s the time to get that.
• Build your product or develop your service. Once you have the business all planned, financed, and have your basic level of staffing, get going. During this time, you may discover things such as:
• Needing to tweak the ideas. Perhaps the product needs to be a different color, texture or size. Maybe your services need to be broader, narrower or more detailed. This is the time to attend to anything that crops up during your testing and development phases. Getting feedback. Friends and family make great resources for asking questions and getting feedback––don’t hesitate to use them as your sounding board.
• Needing to increase the size of your premises. This happens more often than expected. Think rental of storage premises if needed.
• Launch your product or your service. When the product is all built, packaged, coded, online, and ready to sell, or when your services are fully worked out and ready to go, hold a special event to launch your business. Send out a press release, announce it to the world. Tweet it, Facebook it, let the word resound to all corners of your market—you have a new business!
• Hold a party and invite people who can spread the word for you.
• Always provide value and service to those who may be your customers, even if they are not currently. When they do need your product, you want them to think of you first.
• With the advent of the internet, online businesses are probably the easiest way to start and very much less expensive in terms of start-up.
• Keep learning, and be adaptable to change.
• You can also consider trading on eBay or Overstock.
• It is ok to start small with one or two products and then add more and more great ideas as you go!
• Don’t be afraid to experiment with prices. You should determine the minimum price for your product or service to break even.
• Always believe in yourself even when financial money is downhill.
• Beware of people who ask for money before giving you business. Trade leads to prosperity through mutual gain.
• Beware of business propositions that seem to offer “something for nothing.” They probably involve taking something from somebody—usually you.