Getting Started in Your Own Business
You aren’t a business owner until you start one. Taking the initial plunge is typically the most difficult step, but those who act with courage and wisdom when launching a business reap the rewards for many years to come.
Every venture is different, and must be analyzed on an individualized basis. Here are some general steps needed to get a successful venture off the ground:
- Study the risks: Studies have shown that it is usually not a shortage of money that causes new businesses to fail, but rather lapses in management, including incompetence, inexperience, lack of an adequate market, fraud, and disaster. Many of these failures are preventable when the owners have a competent grasp of the management and marketing practices necessary to run their particular business successfully. When you understand and are ready to accept the risks and logistics involved, you can get down to productive planning.
- Look at the market: Make sure there is enough of a market for your planned goods or services to enable your venture to thrive. Develop a real understanding of the wants and needs of your target market and tailor your venture accordingly. There are three primary ways through which this understanding can be gained:
- Firsthand perspective – If you have lived in an area long enough, you are probably familiar with people’s wants and needs.
- Secondary Research – Study prepared market data which can offer a statistical view of the market.
- Primary Research – Go out onto the field and conduct targeted research for your product or service. This is by the far the most useful business planning method.
- Choose an operating entity: Do you want your business to be a sole proprietorship, partnership, corporation, or a limited liability company? A tax lawyer or accountant can help you understand which business model would suit you and your venture best:
- Sole Proprietorship: A sole proprietorship is the simplest and most common business entity. It is unincorporated, and owned and operated by one person. This person receives all the profits and is personally liable for all the losses.
- Partnership: A partnership is an association of two or more people who co-own a for profit business. Each partner contributes money, property, labor and/or skills, and agrees to share in the profits or losses of the business.
- Corporation: Corporations are more expensive and complex to form than sole proprietorships, but may have several tax and liability advantages. Ownership is divided into shares of stock. An attorney or CPA can help you determine whether a C-corporation, S-corporation, or Limited Liability Company (LLC) is best for you. but the business is treated as a partnership for income tax purposes.
- Choose the right name – Consult with a marketing professional and settle on the perfect name for your business. Then check with the appropriate state agency whether that name is available, and register.
- Create a business plan. A proper professional business plan is a comprehensive summation of all the components that can determine success or failure, including business mission, market, finances and future growth.
- Investigate financing: There are many financial institutions that are there to finance business and there may often be grant money or tax incentives available too. As a new business owner, your means for raising capital may seem risky – but you can’t persuade lenders or investors to spend money on you if you aren’t willing to spend your own. Most startups rely on: personal savings, credit cards and home equity – with the rest coming from outside sources.
- Common startup costs:
- Securities on leases
- Office Furniture and supplies
- Production equipment
- Legal and accounting fees
- Employee salary/benefits
- Licenses and permits
- Insurance premiums
- Design/architectural fees if applicable
- Your financial consultant will consider the following information:
- Business concept and detailed plan
- Your own investment in the business
- Credit History and personal net worth
- Conditions that could affect your business prospects
- Character and commitment to the business
- Get Insured: Choose a commercial insurance agent who can advise you on the coverage and appropriate amounts you require in all insurance categories. You may also want to consult an attorney to determine if the terms are right for your business. The following are some of the types of insurance that you may need: Building, personal property, comprehensive general liability, workers compensation, bonding, commercial vehicle, life insurance, business interruption, and health insurance.
- Meet legal requirements: Work with an attorney and CPA to make sure that your business complies with all applicable laws, has all necessary licenses and permits, and is properly registered with the necessary federal, state and local tax authorities.
- Unemployment Insurance: If you hire employees, you will need to pay unemployment insurance tax in order to cover their unemployment costs under various circumstances.
Congratulations! You’ve taken care of all the logistics. Now make sure to market it right.
Marketing a business is a complex, but indispensable, part of succeeding in business. It encompasses general strategy, advertising, media, and more. The goal ultimately boils down to reaching as many potential customers for the least amount of money, in the least amount of time.
At the end of the day, you are the most important marketing tool for your company. What are you offering that is unique or different? Does your business card offer maximum marketing potential? If the back of your card is blank, you are missing an opportunity. The home page of your website should clearly identify the types of products or services you sell and offer multiple ways to contact you. These details add up significantly.
One-on-one networking is also highly effective in spreading the word and forging relationships. The OJC offers myriad networking opportunities throughout the year for business owners, including the grand annual Parnassah Expo.
By using your own creativity in reaching the right customers, you can market your business without spending a lot of money.