These are the best of times and the worst of times to start a business! They are the best of times to start a business because the economy in the U.S., Canada and elsewhere continues to hum along a near-record pace, which boosts demand for all manner of products and services and creates rich opportunity for the savvy entrepreneur–perhaps you–willing and able to make the best of a good situation. These are the worst of times because competition from everywhere and rapidly changing technology make it difficult to start a business and then stay in business.
Naturally, you can launch many businesses on a veritable shoe-string doing virtually everything yourself, working out of the house, garage or your mother’s basement. You can choose any number of online options that can be started with just a little skill and a lot of guts and stick-to-it-ness.
There is real opportunity to start a business today because many, many businesses that existed prior to the Great Recession have gone belly up and left broad segments of markets under-served. Many long-standing client relationships have also been shattered or simply vanished. Today, many consumers and businesses want the lowest price, period! More than anything else right now, consumers and businesses want the lowest cost, period! For newbies entering businesses, this presents a real opportunity to position yourself as the lowest cost provider. For those who have been in business for awhile and need to push up prices due to employees demanding wage increases and their supplier looking to raise prices, this presents an all-to-familiar nightmare as new people in the business crowd in behind you for a pice of the action. But, after all, business is business and if you cannot stand the heat, get out of the kitchen and go work for someone else.
To help you make your dream of independence and riches come true, we have developed 101-plus tips to help speed you on your way.
- Why do you want to start a business at all? Is starting a business really for you? Up until the recent recession and its aftermath, we suggested that you start a business of your own only if you have a real passion. (Read More…)
- Where’s the money coming from? You’ve got several serious issues when it comes to money to start a business. First, but maybe not foremost, is where will the money come from to start the business. (Read More…)
- How much will it cost to start and run the business (factor in Murphy’s Law, appreciating the fact that Murphy was an optimist). What that means is that unless you are exceptional or exceptionally lucky, it will take you longer and cost more to start the business and grow it than you anticipated.
- Create a budget for the business. Even if you are not the type to create a budget in your personal life, do one for the business. Write down every expense and give it a number.
- Where will the money come from? This, of course, is the $64 question for most new businesses. These blogs and posts and other things you read on the internet about starting a business with no money are unrealistic and even harmful to the would-be entrepreneur.
- What do you know how to do, and what do you love doing? Are you one of the lucky would-be entrepreneurs who have great skills in the area that is also your passion? You need to decide what direction to go in with this. (Read More)
- Do you know how to run a business? Running a business takes different skills than practicing what you know or love. Just because you are a great website creator, does not mean you will be successful running a website creation business because you need two skills: you need to know how to create websites and you need to know how to run a business. They are worlds apart. (Read More)
- What business would you like to start? If you have a passion for being in your own business, but do not know what business to start, we strongly recommend that you look into a franchise business for start-up business ideas. A good franchise company will literally tell you all you need to know to be successful in a particular business. (Read More)
- How will your business start, grow, and prosper? You may read this question and respond…”How the hell do I know? I haven’t started it yet!” Exactly our point! You do not need a formal business plan to start a business and to grow a business, but we will tell you that it is a lot easier going forward if you “force yourself” to sit down and come up with a realistic business plan. (Read More)
- What Makes You Think the Business Idea will Work? Do you think your business will work just because Joe or Jane down the street are making a similar business work? Do you have their skills and talent? (Read More)
- Can you layout in a step-by-step fashion, what you need to do to get the business off the ground and running? We are not talking about a written business plan here. We are talking about your ability to visualize the business being successful and the key steps you need to take to make it profitable. (Read More)
- Do you know the applicable laws that apply to your new business start up? If you are going to run a business out of your home, are you allowed to by law to have a business there? Can you have employees working out of your home? Can you legally store supplies in your garage? Can you have trucks in your driveway? You need to figure out what you can do and what you can’t do. (Read More)
- If you are new to business, do you have a mentor for business start up advice? If that sounds all touchy-feely to you, it is not. You need someone you can talk to. You need a “been-there, done-that” kind of person. (Read More)
- Who can you turn to for help to set up the business in the most effective way? There are a number of different ways to organize your business…sole proprietorship, partnership, corporate or LLC to name just a few. Do you know what is best for you? Figuring that out now, will save you money, time and effort in the future. (Read More)
- Questions to help you get a handle around what you are taking on. The above questions are meant to get you thinking about all that you are taking on. A successful business that you own is one of the most rewarding things you can do in life, but most often it is hard work that requires an inordinate amount of work and focus. Not everyone is cut out for this.
- How to start a business plan. When you get to the pre-launch stage of your business concept, you should create a business plan. Do you actually need a business plan? No. Can you write a business plan on one sheet of paper? Probably. It’s be to focus and develop a comprehensive business plan, because, if done properly, it will be your roadmap to success. (Read More)
- Creating a business plan is a lot of work. But it gives you a road map to set you on the course to achieve your goal of a profitable business and an independent, well-lived life. Think of your plan as your “GPS to success.” (Read More)
- A business plan cover page should the name of the business, address of the business. It should also include your telephone number, fax number, email address, web site, name of owner and name and address individual or group it was submitted to. (Read More)
- Include a “Business Plan Purpose Statement” when you create a business plan for submission to a bank for a loan. Although it is not absolutely necessary, it can have positive impact on getting the loan. It could be a page or less in the document detailing the impetus behind the development of a plan. (Read More)
- To create an easy-to-follow business plan format, include a table of contents page to tie in the whole document. In the table of contents, list the key sections and subsections. (Read More)
- When writing a business plan, you need to tell a compelling story that will draw in your readers (bankers, investors, potential employees), especially in this section that talks about your business and its location. (Read On)
- The Marketing Analysis or Business Marketing Plan section is an integral part of your business plan document. The readers of your business plan document(bankers, would-be investors, potential employees) need to understand how you will make a profit and grow your small business into a larger business. Along with that they want to understand how well you know your market. (Read On)
- You need to describe in the business plan services and products of your company. While this might seem like the easiest section with which to deal, it is not; it is one of the trickiest. Once again, it is one of those sections that need to be handled with extreme care. (Read On)
- When you write a business plan, even the smallest company has many “moving parts” that need to mesh together. While your readers—the bankers and potential investors in your business—will all want to know how your firm will make a profit (their main focus is evaluating business plans for funding), they also will want to know how all of the moving parts of your company will function as a whole. Your Operations and Management Section of the business plan is crucial in explaining how it all fits together and works together–just like a fine Swiss watch! (Read On)
- The business financial plan is an important part of your overall business plan, even if you are a new business that has not yet made its first dollar. If you are submitting your business plan to lenders in order to secure loans for the business—start up business or ongoing business—make sure you submit three financial statements in this section. They include a balance statement or balance sheet, income statement and cash flow statement. (Read On)
- The business plan appendix section of your business plan should be a breeze to complete because you should have been assembling all of the documents that will go into this section as you went along producing other sections of the plan. (Read On)
- What about business insurance? Business insurance is a big issue and a big cost. It is an issue that separates the person working out of their pick-up truck and garage and the entrepreneur who is really in business. Back in the days when we edited a contractor’s trade magazine, one of the big complaints was that legitimate contractors had to charge more because they had more expenses, like insurance. (Read More)
- Consider a business owners policy or simply BOP. What is BOP? The business owner’s policy pulls together a combination of needed insurance coverages in one package for major property and liability insurance risks. The BOP is a great fit for the very small to medium size business with less than 100 employees and an annual dollar volume of $5 million. (Read More)
- , taxes payroll and insurance? Where will you turn for help? (Read More)
- What about setting up an office? What is the most effective way for you to do this? What about buying a computer system and small business software?
- Are your prepared now, before you launch the business, to do a “pre-mortem,” an exercise into why your business failed? Sounds nuts, doesn’t it? New businesses fail at an incredibly high rate. After a business fails–and many do within the first year–the sad, broke entrepreneur could do a “post mortem,” the way a coroner does on a dead body, of why the business failed. But why not do a pre-mortem? (Read More)
Start the Business: Marketing & Branding the Business
- Start by creating a “Business Manual” for your business from Day 1 of the business, which ideally should contain all there is to know about your business. In its ideal form, your Business Manual should be so complete that if you were to be run over and killed in your prime by a hit and run driver, your spouse or significant other could take the manual themselves or turn it over to another smart person and they could pick up and run your business. If you feel that you are indispensable to your business, you should never be! Not if you have loved ones who will depend on this business if you are not here.
- Section 1 of the manual should be your business identity and everything about your business identity should be at your fingertips for efficiency sake. There should be a copy of your business logo, how it is positioned on a page, how it looks in ads, the PMS colors used, size, position on stationery, business cards, company colors, everything. There should be electronic copies of your logo and other key materials not only stored on company computers, but also preserved on a memory stick in a safety deposit box. That’s how important this material is. Copies of your press releases and all other materials should be part of the “business identity” section of your manual.
- Choose your position in the marketplace (at least to start with). You have to figure out what about you is special and then emphasize that to your customers. It becomes part of your business identity. For example, are you the cheapest vitamin shop in town? Are you the high-end ski store that knows everything there is to know about the sport, the equipment, the best places to ski and repairs? Find something special and emphasize it. If you are small with lots of big competitors, carve out that niche for yourself. You don’t always have to stay in that niche, but typically you will be able to dominate a small section of a big market. The big guys cannot compete with you in that niche. Neither can behemoths like Amazon because they cannot give shoppers expert advise.
- Create a mission statement. Don’t groan! A lot of people spend a lot of time coming up with silly statements about their “mission.” With yours, spend the time and come up with something serious, real and special. Your mission statement is not your tagline. They are different. When you come up with your mission statement, post it on the front of your “Business Manual” and put it on your website. Also print out a copy and put it somewhere in your office where you will see it daily and read it occasionally.
- Set the goals for your business, but don’t be stupid and grandious about these goals thinking that you are a positive thinker. They should be real and you should be able to specify almost exactly how you will achieve them. This is important. Are you planning an internet business through which you will sell widgets? Don’t set goals like you will reach a million dollar volume within two years with absolutely no basis in fact. If that is your goal, you need to specify how you will achieve that. How will you draw visitors to your website? Advertising on Google? Where will you get the money for that? How will your monitor that progress so that you know you are moving in the right direction? We love that old saying…plan your work and work your plan.” But to us it means that your plan has to be so well defined that you continually move on to the next step and the next step as you make your way toward claiming your million dollar fortune in two years. Don’t depend on a wing and a prayer. Depend on your well thought out plan. By the way, add that plan to your “Business Manual.”
- Create your own positive business culture, even if you are a one-woman shop. Whatever your business is, it starts at the top and works its way down to the lowest hourly employee in the company. Are your customers ultimately a pain in the ass to you, especially when they complain about shoddy service and follow-up? They will be to all of your employees as well. Are your customers to be cherished and valued above all else? They will be by your employees too. But your business culture goes much further than this. For example, if you are opening a public relations business and tell your prospects that you are available 24/7/365, make sure you are. If you really do not want to be available on weekends, holidays, vacation time with the family, make sure you communicate that as well. People will respect it but you must be honest. You business culture is the way you do things. Do you claim to return calls and emails within two hours? Then make sure that you do it. Never expect your employees to do what you will not do. Don’t create one set of rules for yourself and one set for your employees. It won’t work; it never has. It all starts at the top and everyone will follow your example.
- Automate all reoccurring activities in your company, whether you are working alone at home or have employees in an office environment. It also means creating a “process” for everything, which should then be included in your “Business Manual.” Never, never allow an employee, even you, the company’s chief employee, to keep things in their heads and not on paper, like the process for responding to customer complaints, getting back returned product, etc. how you respond. There needs to be a five or 10-step process for every function in every job so that someone new can step into that job and do it. Otherwise, you could be at the mercy of employees who otherwise you might fire.
- Share everything about your business identity so that everyone is on the same page. That includes the set-up for advertising, creating a new e-book to download from your website, your blog content and structure, the approval process in the company for all functions and processes.
- When you have employees (and even if you are working alone), have an approval process for employee-created things like Powerpoint presentations. Have a procedure for emails and furnish everyone with a printed dictionary. We know the number of dictionaries available on the internet is trememdous. Furnish everyone in your company with a printed dictionary…it sends a good message.
- As you grow, watch what your competitors do with their business identity and whether or not they are copying you.
- Monitor what is said about your company on the web. This can be painful, but don’t get defensive about it. Use what people say to improve your business. If someone complains about your non-response to a faulty product return, deal with it quickly and effectively. Maybe they will go back on that blog and create an “update” of how well you responded and how you gracefully handled the complaint. Find out how and why it happened to prevent it from happening again in the future.
- Look at your corporate identity frequently to make improvements to it. Don’t let your logo and look of your products age. Keep everything up to date.
- Don’t let your online business identity lag. Even if you do not personally care about posting on Facebook, Twitter, Pinterest and the like, for your business identity sake you must be on these social media sites because many of your clients and customers will be.
- Do everything in your power as owner to create a positive identity for your business.
- That is, imagine that the worst has happened and the business has closed its door or gone into legal bankruptcy proceedings. Now, come up with the main reason that the new business failed. Do not say to yourself–“I would never let that happen.” Instead, imagine that the worst has happened and write down what happened; why it happened. Once you get that reason down, add a second and a third reason, until you have accumulated eight or 10 reasons why that the business failed. Now, you have an incredibly valuable tool and you can go over your business plan and strengthen it. A powerful way to strengthen the pre-mortem process even more is to tell those around you who know you and the business plan about doing the pre-mortem. Ask them to come up with one or more reasons why the business failed. Promise them you will not be insulted or hurt that you really need this information. Ask them to finish this statement…”The reason that the XYZ Company (your company) failed within its first year of operation was because…..” Like it or not, friends and family know your weaknesses, just like you know theirs. Don’t be insulted, let them help you avoid failing.
- Business insurance is vital for the new small start-up as well as the established company. Just as you, the individual needs certain insurance protection such as medical insurance, homeowners insurance and auto insurance, so does your new company.
Buy business insurance as soon as possible. Buy it before the business is launched so that if will be “in effect” from day 1.
- Write down as many ways as possible that you can imagine experiencing a loss in your new business so that you will have plenty of questions to ask when you meet with an insurance agent. Here’s a true example after Hurricane Sandy on the East Coast in the U.S.: A contractor had his $50,000 excavator at a remote construction site and had insurance on it. The excavator was swept away in the storm. Was the contractor covered? The insurance company said it was due to flooding and that the contractor needed to have flood insurance. He was nowhere near water at his place of business and it never occurred to him to have flood insurance. Think outside the box when it comes to business insurance.
- Find three independent insurance agents–(insurance agents that have their own businesses and sell product from a variety of companies). Not only can they offer you more and different business insurance policies, but as small business people, they can offer you sage advice on your own new business.
- When picking out insurance agents to interview, find three that are experienced in the industry you are in. If you are starting a landscaping business, join a local landscaping association where you will find insurance agents specializing in the business. Opening a bakery? Do the same.
- Create an insurance plan, just like you would create a business plan. Use the knowledge of these three agents to understand what insurance you need today as a start-up and what you will need down the road as you grow.
- Find a veteran business person in your business and tap their wisdom about insurance. Make sure you are not talking to a direct competitor who may not give you the straight scoop. Once again, you can find people like this at a local business association or a trade show in your business.
- For the new businesses, you need property, liability and workers compensation insurance.
- If you do not have workers, you do not need workers comp.
- If you are working out of your home, you probably do not need a lot of commercial property coverage, but you do need to protect the business equipment you have and you need to protect yourself from lawsuits if an occasional freelancer, part-timer or delivery person were to injure themselves on the premises. Some call it a slip and fall policy.
- In getting pricing from these three agents, don’t just look for the cheapest price; look for a good price and an agent that you are compatible with. We want you to interview three agents so that you can find one who your are compatible with. The good insurance agent is like your own personal business consultant who will help you in many ways. (When setting up a small business, always think about setting up a “brain trust”: smart people who you can rely on to give you a straight answer. Your lawyer, accountant, real estate agent and insurance agent should be part of your brain trust.)
- Find out what is covered in each type of insurance. For example, with property insurance, fire and theft may be covered, but flooding and wind damage may not. What about acts of God or man (terrorism insurance).
- When you get the three bids, be aware of who delivered the best customer service and most detailed report. Also, check the bids side-by-side. You must compare apples with apples to get the best coverage. If someone is dramatically cheaper on a coverage, chances are there are more exclusions in that policy than in the others or higher deductibles. There are often dramatically cheap policies for sale on line. But what do they really cover?
- Consider buying a business owner’s policy or BOP that offers the different coverages you need in one policy. These typically will have a lower premium than buying all the policies separately. Naturally, if you buy one of these policies but have no employees, you will be paying too much. In buying a BOP you need to compare three polices side by side that are industry specific. For example, if you are a swimming pool builder, you will probably need “pool pop” coverage, which is insurance in case the pool you have built (are building) pops up out of the ground when the area gets flooded. Probably no one outside of the pool industry every heard of such coverage. That’s why you need an industry specific insurance agent who will think about your needs like pool pop up coverage if you are in the pool business.
- Check out what you need to do with regard to business health insurance. Interview your agent closely on this one. There is so much to know about the new healthcare law that you may have to go to a specialized agent for assistance.
- Save money by adjusting your deductibles higher. With higher deductibles, the insurance policy costs should go down.
- Buy insurance through an agent versus the internet. We cannot stress enough the value-add that an independent insurance agent will bring to bear on your business.
Software to Enhance Your Business
- What small business software do you need to launch your new company? It is an important question and one you need to answer before you start the business. Here are some tips on selecting the right software: ake inventory of your knowledge of business software. Unless you just landed here from Mars, you probably have a working knowledge of some small business software. If you are one of those people who does not understand computers or software, and there are many out there, you need to take a step back from your new business venture to learn basic computer software applications. Chances are you probably know more about software than you realize. At a minimum, you probably understand the necessity of installing and maintaining virus protection software. You probably have a working knowledge of a word processing program—perhaps Microsoft Word. You know how to use email, at least to send and receive correspondence. You may have a passing knowledge of Microsoft Excel and perhaps Microsoft PowerPoint. You have probably used the term “pdf file” and read some of those files online on the internet, although you may not know what pdf stands for. (It means, Portable Document Format and regardless of the operating system, hardware or software you are using, you can read a pdf file as long as you have installed on your computer Adobe Reader, a free program from Adobe Systems, inventor of the software.)
- You also know how to use a web browser to the extent that you can get on the internet and do searches on Google and perhaps shopping. If this is your minimum knowledge, you are off to quite good start and this may be just about all you need to get the business going, with a few additions that we will mention shortly.
- Determine what other small business software you need at the start of your business for it to function successfully. Make a list of 20 things in your business for which you could possibly use small business software of some type.
- A small business person who suggested this to us, showed us her list of 20things she needs software for in her business. The include:
- internet security software
- nword processing
- quickly scanning in business cards
- small business financial accounting
- software to make pdf files
- contact management software
- desktop publishing software
- web browser software
- software for presentations
- software for simple financial graphing
- scanning software
- label making software
- database software (simplified)
- photo editing software
- website building software
- logo making software
- software to open Zip files
- a text editor
- video editing software
What is your definition of success? Do not let it be an ever-changing target
Create an operational plan
Write a marketing plan
Create a pricing model
Never, ever go by the seat of your pants in business
Develop a website
Create marketing and distribution plans
Read these 10 books before you start a business
Start a business
Get federal tax id
Get state tax id
Check all of your names with trademarks
Open a business bank account
Hire a designer for logo and concept and branding
Investigate all insurance and government requirements
Establish a line of credit
Create business materials
Consult an attorney
Consult an accountant
Select a business name
Select the best structure for your business
Register the business name
Collect links and resources to rely on
Get all permits and licenses you need
Set up your books (with the help of an accountant)
Where will you work?
Do you need patents?
The art of war and business, be flexible
Tell everyone about your plans
Ignore the naysayers unless they are right
Don’t get mad, get focused
Deliver your product or service
Constantly think about new products and services
Always over deliver
Get known on social media
Pick partners carefully
Don’t fight with partners
Over prepare for all meetings
Respect the competition, but do not fear the competition
Stress word of mouth advertising
ABN!–Always Be Networking
Get known for great customer service
Even if your website is modest, make sure it functions well
Don’t focus on the stock market or the economy
Make sure clients pay their bills on time
Hire the best employees
Assign responsibility, make them accountable
If someone is not working out, get rid of them then and there. Don’t do what so many of us new entrepreneurs have done and drag it out with a less-than-stellar employee. Cut off the relationship at the knees as soon as you know it is not working out. It will save them a lot of stress and let them get on more quickly with the next step in their lives and it may even save your business.
Best honest; your word is your bond
Don’t over concern yourself with work-life balance it does not exist for the entrepreneur. IF you are married or live with someone, engage them in the business.
You got to know when to hold them, know when to fold them!
Do not overly depend on someone else’s advice