Starting
Your Own Business:
What Does It Take?
From the desk of
Leonard Martin:
Dear Friend,
How
many times have you, or someone you know, said something
like
"I've always
wanted to start my own business. Something
I'd really enjoy doing instead of this dead end career. I'm so
tired of going to work building someone else's
dream. I want to be my own boss and build my dream!"
Have you ever had a dream of
owning your own business? Lots of people have...
but they get bogged down
in the details of how to go about it.
This page
isn't meant to serve as a complete business start-up
guide, but it will give you an idea of some of
the steps involved in starting your own traditional business.
It will also give you an option to get started in
what the SBA has defined as one of the fastest
growing segments of our economy, working from home.
To start your
own traditional
"Brick & Mortar" business there are
8 extremely important steps to getting started:
1.
Hire Professionals
The most important professionals you'll need in the
beginning are a lawyer and an accountant. Some
Lawyers are also Accountants and specialize in
estate planning so take time to do your homework and
interview them for the job, remember to start
thinking like an entrepreneur and business owner.
These professionals may be the first people you hire.
A good accountant
will help you decide what will be most advantageous
tax angle to organize your business as a legal
entity, ie., partnership, LLP sole proprietor etc.
Then the lawyer
can help you make it legal on paper as a corporation,
partnership, sole proprietorship, based on your
accountant's advice. Lawyers can also help you wade through the
local regulations and laws for businesses. If all goes well you shouldn't need the
lawyer very often after your initial set up.
Do not go to a lawyer
or an accountant until you've
decided what kind of business you want to start. The reasoning for this is simple,
lawyers charge $100 to $150 per hour so do your research and brainstorming first.
Know what you want to do and what you hope to accomplish first... then
hire the lawyer
to do specific tasks like help you register your business and get any licenses and permits
you will need, and can advise you about patenting
your idea or protecting your intellectual property
by requiring everyone you discuss your business with
to sign non-disclosure or confidentiality agreement.
One of the
biggest mistake people often make is allowing an
accountant and or lawyer run their business.
Remember that they would be doing what you plan to
do if that was what they were qualified to do so be
selective, hire professionals as members of your
"Business Planning Team" but retain control of the
decision making process and think like a business
owner.
 2.
Make a Business Plan
You may need to hire a writer or other business professional
to help you write a business plan.
There may be a
class offered by your local community college, Chamber
of Commerce, the SBA or similar agency in your
area. These classes are great and often take a full
semester to complete and tuition is usually
required. One benefit of the class is that you'll
learn how to write a business plan
as a part of the curriculum.
One way or another you'll need someone
to help you get organized as to what your business's
main purpose or goal will be and the "best guess" as
to the steps necessary to get the doors open. The best advice you
can find will come from someone who has already been in
the kind of "Brick and Mortar" business you plan to open.
This person probably won't help you write your business plan
however they may be kind enough to answer questions and suggest ways to
avoid problems they've already encountered.
This could be anything
from serving hot dogs to people outside the home improvement
store or providing technology support to major players
in the business world.
Either way, you need
to write a business plan
that sketches out how you will proceed toward your
goal and an estimate of how much money you'll need
to get there by answering questions like:
What will your equipment costs be?
Cost of raw
materials and production?
Advertising
budget?
Availability of
work force?
Will
you be hiring employees?
How about renting office
space, utilities, insurance, etc.?
This is only a
partial list of cost estimates that should be included
in your Business Plan. Depending on the business you
start you may have many many more to consider.
Even if you decide to buy a Franchise that has
already mapped out the answers to many of these
questions, you'll still need to do your own home
work. The cost of a Franchise often keeps people away however the
advantages usually outweigh the cost because more people are
successful when they follow a proven money making
system that is already in place.
3.
Get Financing
Now that you have a complete list of cost estimates
your banker may consider your proposal. Without a
very detailed business plan, a resume
of your personal work experience that demonstrates your
qualifications for running this kind of business
and accurate cost estimates the banker wont even
want to talk to you.
A banker will ask questions like...
What kind of
work experience do you have in this kind of
business?
How much start-up money will you need?
What is your expected overhead?
Have you researched
the market to get projected revenues?
Do you have
savings you can use? Banks like to see you make an
investment of your own money in your idea.
Do you
have friends or business associates
who might want to invest in your venture, or do you
need a bank loan?
Whatever the situation, you'll need
to present a copy of your business plan to bankers
or investors if you need to borrow money to get your
company rolling.
4.
Set Up Your Record-keeping System
A good accountant can advise you on the best record-keeping
software for your business, and help you set up a
system for keeping track of payables, receivables,
sales tax, payroll, employee benefits plans, and so
forth.
You will be relying on the accountant for at
least your yearly tax return for your business, monthly unemployment insurance, workers compensation,
quarterly payroll and sales tax returns. Many new businesses go out of business
because they fail to keep up on these very important activities.
If you have employees it is a really good idea to
have the accountant figure out your payroll,
withholding and taxes, at least for the first year or two.
Your accountant can also get you an EIN number (Employer
Identification Number) once your lawyer is done with
setting up the legal entity.
5.
Find a Location
Depending on your business, finding a great location may be very important.
If you need to be visible to the public (say your
business is a bookstore or restaurant), then you'll
have to think long and hard about where you should
set up shop.
Location can make you or break you-and
the rent is due no matter which way your fortune turns.
You will also need to get a phone, yellow page
advertising, get the utilities
turned on, install your furniture and equipment, and
get a sign or two that shouts "Hey look! We're
here!"
6.
Set Up Accounts with Credit Card Companies
Every brick-and-mortar business these days takes plastic
or they don't stay in business.
You'll pay a small
percentage (2 to 4 %) for every credit or debit card transaction
a customer makes plus a tiny transaction fee.
You will need to invest in a method
for checking the validity of debit and credit cards-like
those "Slide Card Here" machines at cash
registers everywhere. This is involves setting up a "Merchant Account"
and usually requires a credit check of you or the principles of
the business. Some local banks will offer this as
an added service however usually a business owner
will have to use one of the big merchant account providers like
MerchantAccount.com.
7.
Hire Employees
You may not need to do this step if you're a one-person
operation.
Maybe you can get by with just one part-time
person to answer phones and do some of the paperwork. Whatever you decide
be sure to check with your accountant regarding payroll taxes and you may
want to talk with your lawyer regarding "fair employment practices,"
state and local laws on hiring and firing employees.
Of course, it depends on your business and whether
or not you want to take some time off. You can probably
run a small bookstore by yourself, but even a tiny
restaurant means you'll need a cook, several servers,
someone at the cashier, and so forth.
You'll need
to have them complete various forms for the IRS, and
you may want to run background checks or at least
check some references before you hire anyone.
8.
Promote Your Business
Decide what in addition to yellow page advertising
you will do so you can let people know you exist. Decide what
your business can do for them, and why they should come to you
instead of someone else. This is often referred to as a "unique selling proposition"
and can be as simple as the slogan "Coke it's the real thing." If you don't
have a unique selling proposition you may want to
seek some professional help
developing an advertising strategy.
Common forms of advertising
are TV and radio commercials, newspaper ads, flyers,
and coupons that appear in booklets distributed by
local companies.
The
list above might make you think twice about starting
a business of your own. It's a big, big risk.
Perhaps you aren't looking
to make such a huge time & financial commitment regarding the
hiring of professionals, finding a location etc…
Now you have a good idea why so few people actually
take action on their dream to be their own boss.
The biggest
roadblock to starting or buying a traditional business
is that you will be required to make a considerable up-front cash
investment.
In addition to the large investment of
money, the
time commitment you must make when starting a business
can ultimately turn out to be far greater than what
you have experienced in any job, and the cash return
on your investment is not necessarily worth the extra time or financial
risk. Most new businesses take as many as five years before the owner
will see a profit. Many Franchises take at least three years before they
see a profit and if you own a franchise you have to play by their rules
so you're almost a glorified employee, with or without profits.
But
let's look back at the way this article began: "I've
always wanted to have a business of my own.
Something I'd really enjoy doing. Be my own boss."
***
Create a business plan
FarragutPress - July 15, 2010
Goal setting is the best place to start your own business! After all if you don't know where you're going how will you get there? That’s the beginning of the business plan. The next phase is marketing, and that also starts with a little brainstorming... |
**
Women Entrepreneurs
View From the Bay - July 12, 2010
Start your own business! Practical advice from inspirational women. Learn their key to success. Women represent the overwhelming majority of the poor in the U.S., as well as those in the lowest-paid sectors of our economy. And women have been hit hardest by the recession... |
There is another
option!
Without all of the headaches of traditional a "Brick and Mortar" business.
According to the
SBA, this
option is currently one of the fastest growing
segments of the national economy.
 There
is a very simple way of attaining your goal of starting your own business that has
worked well for millions of people.
You can have your
very own business in your home,
and you can cross
off all or most of the steps listed above.
The best part of exploring a home based business opportunity
is that there is
little risk
and the
upside is tremendous.
Many
of the inconveniences and pressures of the traditional
"Brick and Mortar" business are eliminated with a home based business.
Realistically
you will not find a legitimate "Home
Based Business" opportunity...that does not require
some financial and time investment.
If you believe
in the "Good Fairy" you'll end up chasing one empty
promise after another.
So lets take a minute and get
real.
If you are serious about starting a legitimate
business with a solid system, real products, a proven
track record, an effective marketing system and 67%
profit margins, plus residual income...
There
is another
option.
Fill
out the form below, and I will provide you with additional
information about an opportunity that is truly shaping
my life and allowing me the freedom to live out my
dreams without all of the headaches and costs of a traditional
"Brick and Mortar" business.
Sincerely,
Leonard Martin
(307) 459-4668
lmartin@HomeBasedBusinessMatrix.info
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