You have a great product or suite of services to offer the world. You’ve made the leap to go into business for yourself … but, the path to starting a small business can be surprisingly complicated. Let us help you navigate the way.
Even if you’ve settled on your business type, there’s a lot to consider before taking that big step and starting a business. We’re covering topics around:
- Investigating demand for your products or services
- Marshaling strategic partnerships
- Financing your business
- Telling your story
- Checking off the TO-DOs
- More …
Research Your Business Start Up
You’re probably very enthusiastic and optimistic about your business idea. This could be your dream come true. First, though, conduct some due diligence so you don’t dive into shallow waters. Ask yourself questions like:
- Have I proven there’s a demand for my product or services? You might think that starting a chiropractor’s office is a great idea, but are there dozens of other chiropractors in your locale? Does your town need another hair salon? Is there a need for a video rental store when there’s so many ways to view movies and TV shows at home?
Out of the millions of people who think about starting a business, only a minute fraction actually bring that to life. Of that fraction, 50% will fail with a few years. Take time to do a little market research.
If you serve a limited geographic area >
- Google to see how many similar local businesses are out there
- Attend your area Chamber of Commerce and chat with members – float your business idea to get their reaction; you can also do this at free business groups, masterminds, associations, or meetups
- Hire someone to do a short survey gauging interest in your products or services; this can be done at malls, local gathering places, or on the street
- Set up a booth at area events like festivals, trade shows, or flea markets
For starting a primarily online business >
- Check for your products or services on Google Trends
- Pay to view trends, competitors, and market data on sites like datamonitor.com
Whether you’re starting a local business or one on the internet >
- Solicit feedback on social media
- Enter keywords related to your offerings in Google Adwords to see if there’s a demand
- Engage a market research firm
- Do I know my target audience? If you believe your business can serve everyone, then it probably won’t serve anyone. The key to getting customers is knowing who will buy what you produce. How does this audience spend their money? What do they look for or need?
If you want to open a franchise selling tractors, you better be in an area that draws in a large new supply of farmers. If you want to open an online gift shop, you must know who will buy your stock of candles, soaps, and baskets.
- Who are your competitors? There’s always competition in any arena of business, so you must know about them to be successful. Why would customers choose you over them? What do they offer? How long have they been in business? What do their customers say about them online?
- What is your unique selling proposition? Your USP statement defines what sets your business apart from the competition. You can use it in your slogan, ads, and marketing materials. It expresses your reputation and value to potential clients. It’s the selling point that makes you stand out and that magnetically attracts customers.
- Are you selling a brand new or original product?
- Do you offer a guarantee that competitors lack?
- Are you open 24/7?
- Does your team have certifications or training that set your business apart?
Make sure your USP is clear and memorable. Avoid making it too long or technical.
What makes a good versus a poor unique selling proposition? Read our full article on Developing Your Unique Selling Proposition.
Your Business Advisory Team
Who will you recruit to be on your advisory team? You will need an accountant, attorney, business coach, financial planner. Meet with these professionals to decide who will be a good fit for you and your business.
Consider Business Partnerships and Investors
No business owner can do it all. You can be a whiz on developing new products or services. You may be a charmer at networking events. You may make great videos. But are you aware of the necessary tasks which are not your strengths?
There’s a bundle of skills every business owner needs which might not be their strong suit – maybe they’re weak in accounting, marketing, social media, writing, or graphics. In this case, it’s best to make partnerships with folks who do have those strengths.
Such a partner can also make a financial investment in your business. How much money are they willing to invest into the business? Will it be a one-time investment or made over a period of time? How will profits be divided, and how often?
Choosing a business partner is not that different than choosing who you’ll marry. You’ll be spending a lot of time with them and making a lot of serious choices together. Surprisingly, many business partnerships are formed by just an encounter or two at a networking event.
Get to know them. Pick a partner who’s going to help you to be successful, not create roadblocks and drama. Pay attention to their personality, traits, and business philosophy >
- What proof of their actual experience do you have? Can they provide a resume and references?
- How do they handle stress or react to difficult moments?
- Do they have personal issues that could impact their commitment?
- What are their honest thoughts and expectations about being self-employed, your business offerings, and financial gain?
- How would this person handle staff problems like tardiness, bad attitude, or not complying with safety rules?
Capitalizing Your Business
Do you have the financial resources or backing for your venture? If not, what are the options for raising the needed capital:
- Small business loans?
- Angel investors?
- Second mortgage?
Be aware of the requirements and obligations you’ll take on with each of these financing alternatives.
Other Business Start-Up Factors
For your business idea, create a budget for startup costs:
- Office: space, furniture, secretarial support, supplies, computers, software, electronics, phones
- Printing/graphics: logos, business cards, printed materials
- Online presence: domain names, websites, social media sites
- Third-party vendors: copywriting, marketing, advertising,
- Business costs: licenses, registration, legal services
- Memberships: fees for networking groups, meetups, associations, or clubs
Part of this research will involve pinpointing current, realistic costs.
Tell Your Business Story- Again and Again!
Everybody has a story … and everybody loves hearing that story.
Build your general story with these basic ingredients:
- A common situation that piques interest. Identify a condition or pain point with which your ideal customer can identify, such as poor health.
- A problem or dilemma that arouses curiosity. Cite a health problem with which many suffer.
- A resolution that brings satisfaction. Reveal a product you offer that’s proven to help with a particular medical condition.
There are many facets of your journey to business ownership.
How did you come to this decision?
Maybe you worked in a gray cube for a large corporation for decades, saw younger employees get all the promotions, and decided to live out your dream of being self-employed. Maybe a major life change (like divorce, medical problems, or the loss of a loved one) created a desire to do something that gave you more satisfaction and happiness.
What are your unique vision, values, and mission?
Your vision and values should answer the question: What words, phrases, or statements do you want to reflect the philosophy, culture, and mission of your company?
Draft a list of the defining qualities and characteristics that you want your business to be known for … to take pride in … to live by. Examples are:
|Ecologically responsible||Gets results|
|On-time delivery||Creative solutions|
|Exceptional quality||Pioneering products|
Do you offer something of positive value?
Include in your story how you will make a positive impact on your community or on the clients you intend to serve. Your business might benefit college students through life coaching to prepare them for their life journey. Maybe you want to provide organic produce for local restaurants and grocery stores.
Spin your own story, and share it when the opportunity arises. Embed it in your pitch. Blend it into your marketing. Make it a part of your brand.
Wait … there’s more
The work continues. This part may require the engagement of a part-time consultant or a professional with a specialized skill.
Develop a Marketing Plan
Create a strategic marketing plan. Use these suggestions as a launching pad.
- Apply your USP and guarantee
- Focus in on different objectives of marketing: to raise brand awareness, to get website visitors, to make sales
- Keep your target client in mind
- Consider an education-based marketing approach (articles, videos, etc.)
- Make your marketing compelling (with a bonus, giveaway, call-to-action)
- Email marketing, social media, local mailings, in-person events
Next, build a tactical marketing plan that measures ROI (return on investment) from marketing tactics. Refer to these case studies pertaining to specific industries:
Create Website and Social Media Platforms
Build your website with these thoughts in mind:
- Start with a unique though easy-to-remember domain name
- Make it mobile-friendly (50% of users search using their cell phones)
- Research the keywords that prospects search to find your business – try Google Adwords. Insert these words and phrases into your pages, content, and blog
- Include contact information – numbers, email address, location, hours of business, directions
- Second most visited page is the ABOUT tab – use this space to establish a connection with your ideal client and detail who you are and why you do what you do
- Add icons linking to your social media pages
- Include your logo and use branding colors, fonts, and imagery
- Create the best content possible on your products and services
- Testimonials – a must-have
For your social media presence, be sure to post content that is relevant, compelling, and worthwhile for your target customers.
Word-of-mouth has always been a powerful way to get new customers. Here are some suggestions for spreading the good word about your business.
At networking or other business events, share what you offer with other business owners and ask if they know anyone who could use your services.
Connect with strategic partners who will refer you to potential clients. For example, if you’re an artist who specializes in portraits and know another artist who does only landscapes, you can cross-refer clients to each other.
Ask for referrals from personal contacts: friends, family, neighbors, et al.
Be generous. Giving referrals will get you referrals!
Key Documents for Your Business
A business builds its foundation on documents outlining its structure, strategy, rules, and agreements. Documents can protect, inform, guide, limit, and control the facets of day-to-day business. While this list is not all inclusive, it’s a good beginning.
- Business plan. Though not a legal document, a business plan will be needed to seek investors, lenders, and partners. It should provide an insight into your business goals and your blueprint for achieving them. List your products and services, risks, assumptions, and other critical start-up needs.
- Employee handbook. Outlines the contract between your company and employees. It could contain information like conditions of employment, safety guidelines, company profile and history, organizational charts, phone lists, and procedures.
- Confidentiality agreement. Every business needs to protect their privately held information like designs, inventions, and employee/vendor/client data. Ensures all contractors, employees, and other business partners with access to confidential information are legally bound to not disclose such information.
- Policies and standards. Policies are high-level strategic statements covering a variety of workplace topics like data management, customer service, security, application management, attendance, and recruiting. Standards are more detailed guidelines about how to implement the company policies.
- Partnership agreements. Outline roles, rights, responsibilities, and expected contributions (such as labor, management, finances, and decision-making as well as equipment, property, and materials). Can include other agreements regarding topics like distribution of revenue, the individual impact of losses, voting, and limitations of partnership.
Legal Requirements for Your Business Start-up
Do you know what the federal, state, and local legal obligations may apply to small businesses?
|Permits if you sell alcohol or firearms||Registration with state business office||License for food or liquor sales|
|EIN (Employer Identification Number)||Licenses for services or products||Registration with city or county treasurer for tax purposes|
|Awareness of employment laws (record keeping, regulations, reporting requirements)||Assigning a DBA (Doing Business As) name||Registration with county or city clerk’s office|
|Familiarity with American with Disabilities Act, Family and Medical Leave Act, Uniformed Services Employment & Reemployment Rights Act||Sales taxes; income taxes||Sales taxes|
|Annual income tax return; estimated tax; self-employment tax; employment tax; excise tax||Special business permits or professional licenses||Zoning– contact local planning agency|
|Special business permits or professional licenses||Checking with the state Environmental Protection Agency for applicable environmental regulations||Special permits or professional licenses|
|Checking with the U.S. Environmental Protection Agency for applicable environmental regulations|
Free resources are available on www.sba.gov, Small Business Development Centers (SBDCs), SCORE, Women’s Business Centers (WBCs), Veterans Business Outreach Programs, and SBA district and branch centers throughout the U.S.
Start-Up Business Checklist
- Business name: ___________________________________
- Registered: ___ Y ___ N
- Products and/or services: ________________ _______________ ________________
- Location of store or office:
- Physical: Street address ______________________________________________________
- Online: Web address ______________________________________________________
- Business structure: Sole proprietor, partnership, limited liability company, S Corp: _______________
- Insurance or Bonding: ___ Y ___ N
- Mission statement(What You Do Every Day): __________________________________________________________________________________________________________________________________________________
- Vision(What Your Business Will Look Like in Five Years): __________________________________________________________________________________________________________________________________________________
- Values(How You Treat Others): __________________________________________________________________________________________________________________________________________________
Bank Accounts: __ Checking __ Savings
Business Partners: (investors or sharing skills/products/services) _________________ _________________ ___________________ ___________________
- Team: __ Attorney __ Accountant __ Coach __ Consultants __ Employees __ Temps
- Office: __ Furniture __ Computers __ Software __ Phones __ Utilities __ Signage
- Legal Requirements: __ Federal __ State __ Local
- Research: __ Demand __ USP __ Target Customer Defined __ Research Competition
- Start-Up Costs: __ Office __ Printing/graphics __ Online presence __
- __ 3rd party vendors __ Business costs __ Other (______________)
- Raising Capital: __ Bootstrapping __ Small business loans __ Angel investors __ Grants __ Second mortgage __ Crowdfunding __ Other (______________)
- Website: __ Domain Name __ Hosting
- Social media sites: __ FaceBook __ Twitter __Instagram __ YouTube __ eBay __ LinkedIn __ Etsy __ Tumblr __ Snapchat __Alignable __ BizSugar __ Pinterest __ Google+
- Story/One-Minute Pitch: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________
- Marketing Plan: __ Strategic __ Tactical
- Referrals: __ Business contacts __ Family __ Friends __ Former colleagues __ Customers __ Partners __ Neighbors
- Key Documents: __ Business plan __ Employee handbook __ Confidentiality agreement __ Policies & standards __ Meeting minutes __ Partnership agreements
As you have seen, there is a lot to consider when starting a business. But don’t be discouraged. How do you eat an elephant? One bite at a time! Use this information to create your elephant and then take a bite every day until you have eaten the whole thing.
Congratulations on starting your small business! This will be one of the most exciting, rewarding journeys in your life!