Saturday, December 12, 2015

Start a Business - Follow these Steps

The world is changing rapidly. The availability of technology, the way we buy products and services, the ease of accessing specialized skills anywhere in the world, the declining cost of launching a new business.

All of these factors create opportunities for new entrants to the market and make this one of the best of times to consider starting your own business. Starting your own business, will require well developed leadership skills, hard work, discipline to see a task through, rapid evaluation of what is working and what is not and a whole lot more.  But for those who have the drive to succeed and the energy to work long hours, the rewards are well worth the investment in time and money.

Here are the steps you need to take to make your new business a success.

Problem solve your business idea.

Create a shortlist of business ideas. Make sure you are really knowledgeable and passionate about each of them or you have found a gap in the marketplace that needs to be filled. Wherever your interests lie, it's almost guaranteed that there's a way to turn it into a business.

Another option is to open a franchise of an established company. If you choose to go this route, a lot of the legwork has been done for you. The concept, brand following and business model are already in place; all you need is a good location and the means to fund your operation.

Once you've narrowed your list of ideas down to one or two, do a quick search for existing companies in your chosen industry. Learn what the current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don't or deliver the same thing, but faster and cheaper, you've got a solid idea and are ready to create a business plan.

Prioritize the shortlist of business ideas by into viable business models. To accomplish this, identify revenue sources, the customer base, products, or services and details of how the business will be financed for each idea. This translates the business idea into a preliminary business model.

Know your business solution and your customer inside and out. Ensure you are passionate about what you are starting because you will be spending all your time with it.

Now for the Business Plan.

Now that you have your idea in place, there are a few important questions you need to ask yourself. What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? All of these questions can be answered in a well-written business plan.

A business plan helps you figure out where your company is going, how it will overcome any potential difficulties, and what you need to sustain it.

The basic sections you will need to cover are:

1.    What your business is about and how you will accomplish your goals.
2.    Your extended goals, and how you will fill your market's needs.
3.    Your research on your target market.
4.    Organization and management of your company.
5.    Your service or product line, including copyright information and R & D activities.
6.    Strategies for market penetration and growth.
7.    Estimated costs and funding request (if you need financial assistance).

Know how much you will need to finance the business.

Starting any business has a price, so you need to determine how you're going to cover those costs. Do you have the means to fund your startup, or will you need to borrow money?

If you are planning to make your new business your full-time job, it's wise to wait until you have at least some money put away for startup costs and to sustain yourself in the beginning before you start making a profit.

Startups requiring a lot more funding up-front may want to consider venture capital. This is money, usually in the amount of several million dollars, provided to a fledgling company by a firm or business with the expectation that the backers will have a hands-on role in running your business.

Alternatively, you could use an angel investor, a private individual that will provide up to about $1 million for a project, or launch an equity CrowdFunding campaign to raise smaller amounts of money from multiple backers.

Using a home equity loan or a small business credit card to finance your startup is a viable solution, but it isn't recommended. A credit card is best used as a means to keep your business on course, or to make big-ticket purchases you wouldn't otherwise be able to afford.

Decide on the legal business structure.
Before you can register your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong.

If you own the business entirely by yourself and plan to be responsible for all debts and obligations, you can register for a sole proprietorship. A partnership, as its name implies, means that two or more people are held liable as business owners. These are easiest types of businesses to form, and the only difference is the number of people contributing resources and sharing the profits and liabilities.

If you want to separate your personal liability from your company's liability, you may want to consider forming a corporation. This makes a business a separate entities apart from its owners and therefore, corporations can own property, assume liability, pay taxes, enter into contracts, sue and be sued like any other individual. If you decide to make your business a corporation, you'll need to choose C or S. The main difference between these is the income taxing, with an S corporation owner only being taxed on a personal level. 

One of the most common structures for small businesses, however, is the limited liability corporation (LLC). This hybrid structure has the legal protections of a corporation while allowing for the tax benefits of a partnership. Any lawful business can form an LLC, with the exception of businesses in banking, insurance or a few other specific professional service operations.

It is up to you to determine which type of entity is best for your current needs and future business goals.

Register with the government and IRS.

To become an officially recognized business entity, you must register with the government. If you are registering as a corporation, you'll need an articles of incorporation document, which includes your name, business purpose, corporate structure, stock details and other information about your company.

Otherwise, you will just need to register your business name, which can be your legal name, or a fictitious "Doing Business As" name (if you are the sole proprietor) or the name you've come up with for your company. You may also want to take steps to trademark your business name for extra legal protection.

After you register your business, the next step is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service. While this is not required for sole proprietorships with no employees, you may want to apply for one anyway to keep your personal and business taxes separate, or simply to save yourself the trouble later on if you decide to hire someone else. The IRS has provided a checklist to determine whether you will require an EIN to run your business. If you do need an EIN, you can register online for free.
Regardless of whether or not you need an EIN, you will need to file certain forms to fulfill your federal and state income tax obligations. The forms you need are determined by your business structure.

It is also important for entrepreneurs to consider their intellectual property, and be absolutely certain that they own it before going ahead with their business.

If you are working with other people, be sure you understand who really owns your concepts and ideas familiarize yourself with the basics of the patent laws that have changed dramatically over the past few years which is now a first-to-file system.

Build your team.

Unless you're planning to be the sole proprietor and employee of your business, you're going to need to hire a great team to get your company off the ground.

Figuring out how the team will work together is critically important. Defining roles and responsibility, division of labor, how to give feedback, or how to work together when not everyone is in the same room will save you a lot of headaches down the line.

In the early stages of your business and until revenue and profitability have reached a repeatable level it is highly recommended that you outsource as many operational activities as possible.  This approach is made easier in the last 10 years with advances in making technology accessible to small business that was exclusively available to large businesses in the past.

Have a Brand and advertise it!

A great startup idea won't do you any good if people don't know about it. While there's still a lot of value in word-of-mouth advertising, you're going to need to do more than just tell your social circles that you're starting a business. Before you start selling your product or service, you need to build up your brand and get a following of people ready to jump when you open your business.

A company website and social media profiles are practically essential for any small business in today's world. Create a logo that can help people easily identify your brand and be consistent in using it across all of your platforms. Use social media to spread the word about your new company. You can even use it as a promotional tool to offer coupons and discounts to followers once you launch. Be sure to keep these digital assets up-to-date with relevant, interesting content about your business and industry as well.

When you have your business product or service and brand, get out into the market and testing your product or service to get feedback from real customers.
Once you have your first few clients, work with them to find the common truth in your customer base.

Now grow your business!

Your launch and first sales are only the beginning of your task as an entrepreneur. In order to make a profit and stay afloat, you always need to be growing your business. It's going to take time and effort, but you'll get out of your business what you put into it.

Collaborating with more established brands in your industry is a great way to achieve growth. Reach out to other companies or even influential bloggers and ask for some promotion in exchange for a free product sample or service. Partner with a charity organization and volunteer some of your time or products to get your name out there.

There are also a lot of great tech tools available to help small businesses reach the next level of growth.

Starting a business can be risky and challenging, and we have not covered all the issues that need to be addressed in your particular, but armed with the proper tools and information, you are on the road to entrepreneurship.

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