You’ve got a great idea for your business. Now what? In this article, we outline the steps you need to take to make sure that your new business meets success and reduces risk.
A lot goes into starting a business; depending on what type of business you’re starting, you could be dealing with legal, financing, sales, marketing, intellectual property concerns, product liability, human resources, and numerous other concerns. And while that seems like a lot, because it is, more and more people are starting out on their own; possibly, because even with all of those concerns, it’s easier than ever.
So what are some of the steps for entrepreneurs to consider when going out on their own? Here are some that you should consider, and some of these can, and should, be done concurrently as opposed to just walking through them step by step, which will only slow your startup business down.
Business Planning
The opinions on business planning are all over the place, from one extreme to another. The consensus though, is that you need some level of planning in order to get the business off the ground. It may be as simple as planning out the key steps you need to take over the next 3 months, and how to allocate your time in order to achieve that. On the other hand, you may be very into the planning stage and compile, or pay for, an in depth business plan.
Consider Your Business Entity
Ask yourself how you’re going to address the business entity question: Am I starting my own LLC, or corporation, will this be a sole proprietorship, or a partnership. These are the main structures used in a small business. This decision can have tax, legal and major liability implications, and is something that should be carefully considered. Regardless of what you choose, you should be able to get the structure up and running quickly, and be able to move forward. Protecting your personal assets should be on the top of your mind as you get started and your choice of business entity will help with that. In all likelihood there isn’t going to be a good reason for you to be a sole proprietorship or general partnership, either of which can put your personal assets at risk for the obligations and liabilities of the business. If you’ve got partners, now is the time to address agreements between all of you, what the responsibilities and expectations are, and what will happen if someone wants out. These things are much easier to figure out early on, when everyone is on the same page.
Requirement To Start A Business
Often, there may be additional requirements you have to meet in order for your business to be compliant with local, state or federal laws. It’s hard to specify what exactly these would be, they would be very specific to the type of business you’re starting and where. You should think about things like regulatory requirements, zoning, business licenses, getting a bank account set up, and trade licenses to name a couple of examples.
Figure Out Financing
Financing and funding your business is extremely important. "How do I get money to start my own business?" has to be one of the most common questions aspiring business owners and entrepreneurs are asking. There are several options to consider, some may be more realistic than others depending on what you’re trying to do and what your network looks like. You could put up the money yourself, out of saving or retirement, which is common with small business owners just getting started out. You could try to take out a loan, but be warned that it’s probably going to be something you will have to personally guarantee since the business doesn’t have a track record. You could look for family and friends who are willing to invest or loan you the money to get started. There may be quite a few options available, any of which could be considered and explored.
Don’t Over Think Your Start
You should think about how your product or service differs from the competition or is a solution to what your target market needs; it’s important to differentiate yourself. However, at some point you’re going to need to launch the business, and put your product or service out on the market. Don’t drag your feet on this, it’s not uncommon for entrepreneurs starting out to get stuck in an endless cycle of overthinking here. There will always be something else you can look at, something else you can research or something to tinker with. If you keep that up you’ll never actually get started. You can tweak as you go, use early adopters as a resource, make adjustments and pivots as needed, and work out the kinks. At a certain point getting it done will be better than getting it to where you think it’s perfect.
Figure Out How To Reach Your Customers
Sales and marketing (granted these are very general terms) are how you’re going to get in front of your customers and clients. Put some time into thinking how you’re going to allocate your resources between the two. There isn’t a one size fits all approach here, some products or services lend themselves more towards a marketing approach than others. If you’ve got an expensive, bespoke service that will require a lot of hands-on work once it’s sold, there’s a fair chance that you’re going to need to put resources more towards selling that service to a very targeted audience. If you’ve got a fairly inexpensive product, with a large demographic, that probably leans more towards taking a predominantly marketing approach, people buy quickly, and the business is basically hands off after the sale. You’ll want to use both, but one is probably more important than the other for your particular product or service.
Protect Your Business Going Forward
At some point you’ll probably need to utilize resources other than yourself or partners to make the business move forward. That could be vendors, independent contractors, employees, interns or some other options, but you’ll only get so far without utilizing other resources. Your business has a lot of valuable information that those 3rd pirates will have access to as they help, so you’ll want to consider what steps you need to take in order to protect your company, its assets and its information. Employee agreements, confidentiality agreements, intellectual property assignments, contracts with vendors and service providers, to name just a few, are going to be very important. A general rule of thumb is that you need some sort of contract for every relationship your business has, both internally and externally. Do not underestimate how important this is; employees could leave with your client list, contractors could take your trade secrets and use them to their advantage, service providers may be giving you unfavorable terms. The more you grow and innovate the more important taking these steps will be.
Have questions about getting a business started, how to protect it, or risk management in general? Contact us to schedule a free consultation.