So you have always dreamed of starting a business...what do you need to know before you take that big step?
There are a lot of steps after the first big one, and they are all going to be up to you, so it is important to start by thinking about the "why." Why do it? The reasons are varied - see whether yours fit on this list, and add to it if your reasons aren't represented here:
Document your reasons why - write them down - because in the less-than-fun moments of running your business you'll want to be able to remember them, and stress will keep them out of the top of your mind.
- Greater autonomy
- I have a great product idea that nobody is producing yet
- I want to be able to work from home
- I don't ever want to go on a job interview again
- I want to make a lot of money
- I want to help other people become employed - in my company
- I want to establish a legacy for my family
- I want to contribute to the well-being of my community
The nitty gritty prep work
There is a lot of ground work for you to do before you get started. A few of the key early steps will be listed below, but here are two recommendations right out of the gate:
- Talk to a few owners of businesses that are fairly new. Find out what they love, and what they hate, about it. Sure, your passion will drive you at first and your rose colored glasses might not allow you to see the real deal right now. ("I'll never make THAT mistake!") But these conversations will help you do a bit of a reality check.
- Make an appointment with SCORE (you can find your local chapter HERE.) SCORE mentors are seasoned businesspersons who volunteer to help people like you get started. They will talk to you FREE to help you navigate the research and planning you need to do up front. And they sponsor classes (typically very low cost) for specialized areas of knowledge, like business planning and QuickBooks.
- Determine your desired business structure: proprietorship, limited liability corporation (LLC), partnership, etc.
- Choose a name and register it. Before you get too far in love with a particular name, do a URL search to make sure your desired website address is available.
- Do some online and/or community research on your competition, determined by your desired geographic market for your business. You need to know what's already out there so you can determine things like differentiating product or service features that will help people choose your company. In addition, knowing a bit about pricing will help you make sure that you're in the ballpark competitively.
- If there are other businesses like the one you're contemplating, consider talking to somebody who is already doing it in a different market (so they will not feel at risk giving you information.) Why reinvent every process and learn every lesson yourself when you can learn what's already working?
- Assemble your key advisors. You will likely need to consult an attorney, an accountant, and an insurance agent. Some of the tasks like registering your business name can be done yourself through online services, but if you want a higher level of certainty that you are handling things properly and making good decisions to protect yourself and your future company you're better off talking to a licensed professional.
- Develop your business plan. This should include your vision (what your business will grow up to be,) your external assessment (competition, economic environment, etc.) and internal analysis (what resources you already have and what you need.) Then develop a mission (your big goal for the upcoming planning period,) critical goal categories (what MUST happen to achieve your mission) and supporting business goals. From that foundation you will develop financial projections, and plans for sales and marketing.