Are you considering starting a business in 2019 but don’t know how or even where to start? This article describes the biggest obstacles to overcoming what you need to start your business and what to do after a year!
The Myths of Starting a Business
When you think about starting a business, you want to think “Why do you start the business?” Often once someone you decide to start a business with the mindset will want more free time, work at home and have a flexible schedule. Unfortunately, it is important to avoid these myths. Most of the time, starting a business is not one of those things. Instead, the long hours of work at home can be a distraction, less flexibility, and there are many hats to juggle. It’s completely different to working for a company and it’s important to keep all this in mind when deciding whether starting a business is right for you. If so, let’s dive into getting started with your business idea!
Attitude is EVERYTHING. You always have to have a cheerful attitude. Many things will happen throughout the business, both good and bad, and the most important thing is to maintain a positive attitude.
BIGGEST OBSTACLES TO OVERCOME
The two biggest obstacles that start-ups face when starting a business money and reputation. You need to make sure that you are able to stay afloat and have a means of funding when you start. And reputation is also an obstacle because you do not have a reputation or customers. Unless you start with a group of customers, you usually start out a lot on your own.
WHAT DO YOU NEED?
You need to provide a product / service that people will buy. Examining similar products / services is important to see what else is out there that resembles your idea and then determine how your product will outperform the competition. It is also important to be able to bring along experience to the table. It is the experience you have that will make the company. Typically, you want a niche so you can take a focused approach and decide what type of business you want it to be. Finally, consider whether you can sell enough of your product or service to make a living. Will you be able to cover all the expenses and salaries that come with a business?
A business plan is absolutely important. What is a business plan?
Start with one executive summary, which is a high-level description of what the company should do. Next, you need one business description that sets out the business in detail. Then you eat market analysis, who becomes your customer and who is your competition? Next is organizational management. Who is going to manage the business? Do you have to manage it yourself or will you hire someone from outside to manage your business? Most of the time you start managing your business yourself. Next, you need one sales strategy, what type of sales strategy should you include? And in the end, include financing needs and financial projections. What funding do you need to start the business and how much do you project to earn?
A written plan is critical. It is imperative that you write the above information on paper.
There are many business plan templates available to help. Even if you are an established business, you do not need anything complicated. An additional resource is a simple roadmap. This breaks month-to-month forecasts for 2 years. What trade shows do you want to attend? How many people do you want to hire? What type of marketing campaigns do you want to run?
In the end, goals are extremely important. You need to set specific goals in your business plan so you know where you are going.
How do you finance your business? Some of the most important questions to ask are how much money do you need to stay afloat? Are you taking a salary? What will your non-salary expenses be? How many people do you plan to hire in the first year? What about business benefits? Even if you are alone, you need benefits and insurance. These are all questions you need to think about.
Need to self-finance or take out a loan? Self-financing is often recommended if you have enough money in the bank to float the business and your salary for a year or two. This option reduces the pressure. The last thing you want is pressure from creditors. Loans will be difficult to obtain. If you manage to get a loan, you will need a personal guarantee and you need security.
There is also the possibility of a financial business partner, but a financial business partner can often lead to interference and pressure. It can also mean that you run the business differently than you imagined. Remember, you start the business of putting your own spin on it!
A fourth option is a finance company. This is a viable option because they will often do your payroll and billing for you. Sometimes the finance company will also provide a basic ATS system to help you get started. The disadvantage of a finance company is often that it is difficult to break out. You have to pay interest loans and sometimes it is not financially feasible to break out. If you use a finance company, you want to make sure you understand the deal and know what it takes to move away from the finance company.
Some additional funding options are family, small business grants and crowdfunding / internet. It’s really up to you, though this is a good opportunity for you. Grants for small businesses tend to be difficult to secure and a lengthy process. Crowdfunding gives you small amounts of money from a large number of people. It is an unusual opportunity, but can work.
How much do you have to pay yourself? It depends on the industry, but typically your first year’s salary is $ 34K to $ 75K. You also need to be prepared not to create anything for a few years! It is important to prepare for it. You do not want to get yourself into a debt situation.
First-year profits. Very few companies earn their first year. It is incredibly important not to get discouraged if this is the case and continue to soldier on. Generally, it takes two to three years for the profits to kick in.
Make sure you create a company name that you like and represent the “look & feel” of the company. Avoid using your name, leave it to law firms and accounting firms! Sometimes it makes you look small. You will always make yourself look bigger than you are. Finally, consider a name that begins with an “A” that appears high on lists.
Next, create a company. You can’t just start selling stuff! A good best practice is to get a book and read about the different kinds of businesses. You really need to understand how this works if you run a business.
You need an EIN (employer identification number). Then you have to decide what kind of company you want to set up. There is C companies, which is an Inc. company. You may have heard the word “Can’t pierce the company’s veil.” This means that if you start a C company, no one can sue you personally. They have to sue the company. In addition, you file taxes separate from your personal taxes. This is a great opportunity because it allows you to keep your personal and business matters separate. to S companies, This is not the case. Your personal and business tax returns are the same. One benefit to keep in mind, if you want to sell the business, there are often tax advantages. If you form a C corporation, it is very difficult and expensive to form an S corporation afterwards. If you do not plan to keep the company for an extended period of time, forming an S corporation can be a viable option. In addition, there are named companies Limited Corporation (LLC). You can also form one not for profit, but you have to be careful about it and make sure you qualify.
The best thing to do is Consult with your lawyer and accountant to find out which company is best for you. Once you have formed your company, you must obtain a business license, register with the state and get a bank account.
Marketing your head offices
Marketing your headquarters is as important as anything else. An outside office is a good route to go because it projects professionalism. The first year you will spend a lot of time proving that you are a real business. One of the best ways to prove this is to have an office. This avoids the dog barking in the background while on the phone. In addition, it helps you focus. There is no temptation to throw in a lot of laundry! An office is also a great place to meet people. You do not want to constantly meet at a coffee shop. Especially today when you try to recruit people, you want to convey professionalism.
You do not have to start in a beautiful office. Some cities offer temporary space. In Chicago, you can get an office for $ 350- $ 700 a month that includes 1-3 private offices, a business mailing address, a receptionist / business phone #, WIFI, meeting rooms and a furnished room / kitchen. If a temporary space is not an option in your city, you can also rent a small office. Get cheap, yet trendy furniture! You can also get a startup internet phone system.
If a physical space is definitely not in the budget, you can get a “Virtual Office.” You can buy a virtual office for as low as $ 99 / month, and it gives you a business address, receptionist, meeting rooms, and calling that appears to come from your business name.
You need professional marketing materials and business cards. Finding a good designer is important, but it doesn’t have to be expensive as long as the materials look good. You only need the basics to start. Most of the time you produce one e-brochure, e-mail template and a one-page handout to distribute at trade shows and when visiting customers. Don’t make these yourself. Even if you are graphically oriented, you should not spend time doing this. You need to be on the phone and make business calls.
Everything you submit must make a statement and spell “success” with your materials. You have to look like an established company.
You also need one logo. It may be a good idea to get a professional to design your logo that costs a little more. This will make a statement about your business and you will have it for a while. Letterhead is optional. Generally, you probably don’t send many letters, but if you plan to send letters, you need letterhead. You need one proposal template since you want to send many suggestions to clients. In the end, you definitely need one website. If you do not have a website, you are not a legitimate business these days. People want to look you up and if they can’t find you on the internet, it’s a red flag. Again, don’t make the site yourself. You can always tell if it’s a self-made site. Two important elements to your site are a query form and mobile optimization. Your site must be mobile optimized because everyone is searching their phone.
Simple questions to ask yourself are, who are you selling to? Who else sells to them? What is your focus? Why should a customer choose you? These are basic questions, but you will be surprised how many small business owners cannot give a good answer to these questions.
E-mail marketing is important; However, that should not be your main focus. In fact, a very low percentage of emails are opened because of the mass of emails that everyone receives daily. Cold calling is a favorite of many. It’s important, so you have to like to make calls. Always leave a message. Many times people prefer to call back later, but left a message starting to build this relationship. Who will they call if they are looking for the solution you offer. shipments are also good at adding a marketing mix to send a few times a year. Jumbo postcards are always a good option. There are many professional postcard companies online that will design the postcard and handle distribution of it to your mailing addresses. You always want to follow up with a phone call for better results. Exhibitions are nice to attend but can get expensive. However, this is a great way to get your name out there. Social Media is very important these days. If you don’t know anything about social media, take an online course. Many people are on social media, so it’s a great way to reach those who are. Finally referrals / networks is extremely important. When you start getting customers, you will be able to get referrals. And networking is a great way to meet new people. Always attend events that potential customers may be attending.
Business owners need to know how to sell. The most important thing is to believe in your business and be able to sell the concept. You need to know why your product / service is the best and learn how to sell Why it is best. At the end of the day, customers buy “YOU”. In most cases, your product is not unique. You need to convince the customer that “YOU” is the one.
If you are new and a small business, buying from you is a risk. You need to overcome this your first year. Someone will be your first customer. How will you prove that you are not a risk? This is something you need to think about and be ready to answer when asked. One way to do this is to say that if you work with me, I will handle your account personally. You want to put together a list of benefits that you are a smaller company could offer to see a large company.
When you get your first customer, you MUST have a contract. Don’t use your uncle’s lawyer who specializes in drafting wills. You need a lawyer who knows your business and specializes in it. Steal a contract template from online showing your business and saying everything it has to say. It is extremely expensive to use a lawyer to write a contract from scratch and for the most part you can get a better one anyway. In the sales contract, do NOT assign important points. How do you know what the important points are? One way is to ask your lawyer. What does this contract say I should never change? One point you find on most standard contracts is if litigation arises, it goes to the seller’s state. You will never change this in the contract because if something comes up, you will have to hire a lawyer in another state and it can be very expensive. Most people know it goes to the seller’s condition, but some people want to change that. You will never mess with your contract without consulting your lawyer.
Always remember, don’t give up the store. You always want the business, but it won’t be good if you admit too many cases. You need to calculate in your business plan and your financial projections what you will charge. If you get business that you do not want to charge what you have to charge, you might as well not get it. You need to spend your time on business that will be profitable.
ORGANIZATIONS / EDUCATION
You need to be in both national and local organizations because it gives you instant credibility. Anyone who is part of a national organization knows that you get high-level training and gain industry knowledge. In addition, you will learn about legislation. You must know the laws. Local organizations achieve the same, but you get locally related industry knowledge and legislation. You can also take part in local events where you spend money flying somewhere. Being a member of both national and local organizations is very important for immediate credibility.
Eventually you will have to hire employees. You must have an employee agreement. Again, you can grab a template online and run it by your lawyer. When hiring someone, give them a written offer letter, benefits and an employee agreement.
You will have to figure out how much you pay your employees and also what benefits you will give them. When you are a small business, you might be able to give your employees better benefits they cannot get elsewhere, so there is an incentive to work for your business. You will also need to figure out the working hours and supplies you need to provide.
In addition, an employee handbook is important. You can purchase a business directory template and customize it by filling in the blanks. You will give all your employees a copy on their first day and update it every year. The manual should contain guidelines for all processes and policies, such as a mission statement, vacation / PTO policies, etc. You will never be clueless with anything.
What does a good employee profile look like? You need team players and someone who has a passion for the job. You don’t want anyone to pull them in yourself every day. You also want your employees to be determined and dedicated. If you give your employees incentives, they are likely to be dedicated.
It’s up to you to keep your employees motivated. It is important to engage your employees. Talk to them and see what they think about different topics. You also need to adjust your metrics and have goals that your employees need to reach. Goals help increase employee productivity. It is important to identify and remove internal barriers that could damage an employee’s productivity. Educational opportunities and professional development opportunities are important to your employees. And lastly, always remember to focus on your business strategy. You cannot please every market. If a client is not the right fit and will cause more stress for everyone in your business, you must continue the business.
Probably the most tedious thing about owning a business is accounting, payroll, taxes, etc. Unless of course you like these things! Unfortunately, if you do not, think about these things when you own a business.
For payroll you can hire an external payroll company, have your accounting firm do it or do it yourself through a payroll system you must file your payroll tax, or else you can go to jail. You also want to make sure you avoid high late penalties. The government will charge you if you are late for something.
Make sure you send out invoices to customers immediately, because the sooner you send them out, the faster the money will come in. Cash flow is extremely important. You need to be on top of open invoices, even if your accounting firm executes your invoices, more likely they will not make call collection. You also need to send one account statement, which is a document that outlines everything the customer owes. When you send this out, people tend to pay faster because they see all the money they owe.
You must pay your bills immediately to ensure a good credit rating. You want a good credit rating because the prospects will run a D&B business. Get rid of credit cards that you do not use because this can also damage your credit score. Additionally, avoid creating credit card debt. Don’t get into debt no matter what. It will kill the business and stress you out.
There are two very important documents you need to have. One is one balance (assets and liabilities). Assets are cash in the bank, furniture you may have, etc. Obligations are paid accounts, loans outstanding, collection of 401K from an employee, etc. Secondly, a income statement (revenue / expense / profit.) This will include what your sales and expenses are. You take what you sold, minus expenses, and that’s what your profits are. At the end of the year, this profit is transferred to your balance sheet and becomes part of your equity for the next year.
Understanding your financial circumstances is very important. If you don’t, get a book, attend a seminar, and so on. You do not want to trust your accountant. You need to be careful about hiring an outside company so it’s key to understanding your financial stuff and being able to notice something that doesn’t look good.
COMPANY abandoned ELSE
Never file your corporation tax yourself. It’s complicated, and more importantly, you always want an accounting firm to sign it up.
IMPLEMENTATION AND SOFTWARE TOOLS
At some point, you have to deliver the product / service. If you are a staffing company and place candidates, make sure they stick around, otherwise you will not get paid. You must also always provide high quality service. High-quality service means repeated business and referrals. This is a way to help grow your business.
If you are a staffing company, you need a database that can manage clients and candidates. Be sure to enter all clients, candidates and follow-ups into the solution. A cloud-based software is the way to go with a light monthly subscription fee. Training is very important. You need to know how to use your software. If you want to invest in software, use this tool to help grow your business. It will make the processes more efficient. It can also help increase customer service. If someone is out of the office and a question comes from a client, you can look at the notes in the software and see where everything was left with that client. You don’t have to wait for this person to be back in the office.
When investing in your software, implement one mandatory use policy to your employees. For this you need one process manual. The book defines what you want them to enter and how you want them to enter it. Data that is not entered leaves when an employee leaves. This is your data, this is your business, you want them in the business. In addition, with software you can monitor performance and collect important statistics on employee performance and business. To continue to grow your business, you need a way to generate reports and identify what is going well in your business and where you need to improve.
AFTER YEAR ONE
In year two you are going to take advantage of your results. You want customer referrals to help you get new business. You will Invest more in your business. You can invest in more employee training, update your site, attend an extra booth, and maybe it’s time to move into your new office!
After year one, you will evaluate how the first year went and come up with a new business plan for year two. Every year you want to come up with a new business plan. You want to brainstorm with your team new ideas and make sure everyone communicates what their plan is for the next year. This helps to guarantee that there is no inefficiency and that no one does the same job twice.
Every year, you want to keep going hone your skill set and processes. You will constantly challenge yourself and change your business as the industry changes. You have to keep being it passionate about what you’re doing. The moment you no longer burn, sell the business! Always keep dreaming, but not only dream but take action and make it happen. Make sure you celebrate success from both a company and employee point of view. You also have to be willing to do that take risks if you want your business to be successful but not to be reckless. Constantly explore new ways to approach your business. Know your boundaries, but never try to stop transcending them. In the end, don’t be afraid to let go of low-performing. Shooting is very painful, but unfortunately it is necessary. Also, don’t be afraid to let go of high-performing artists if they have a bad attitude and are toxic to the environment, they have to go no matter how much money they make to you.
Finally, everyone always sees the end goal, SUCCESS, but there will always be obstacles along the way. Don’t be afraid of failure. You need to fail a number of times to succeed.
Good luck! Start your journey!